From the 1990s, most of the Asian countries pursued neoliberal policies with significant downsizing of many social welfare schemes. The governments shifted the essential services like healthcare, education and pension from public sector to private sector and focused on targeted social programs rather than universal benefits, excluding marginalized groups.
The low-income populations and disadvantaged groups have been deprived of health and quality education due to commercialized health care and expanding private education. The working people have been deprived of labor rights and protections. The regressive tax policies, favoring the big corporations, had disproportionately impacted vulnerable households.
Most countries across the world experienced a decade of such adjustments, particularly from 2010. Such structural adjustments, the austerity and fiscal consolidation measures were promoted by international financial institutions including the International Monetary Fund (IMF), World Bank, G20 countries and others. Many underdeveloped countries were forced to implement the draconian austerity measures. Most Asian governments continued the neoliberal onslaught, and from 2021 onwards reduced their public spending drastically. They adopted budget cuts for social programs.
This kind of fiscal austerity measures, privatization and labor market flexibilization pushed millions of people into debt and poverty. The workers in the informal sector, without any social security, were more vulnerable to all kinds of abuse. Women and children were also severely affected by these policies.
Central Asian countries and the Middle East had highly contracted expenditure in 2021. In 5 out of 8 countries of the South Asian region, the budget cuts were high. These countries till now did not reverse the course.The privatization of healthcare and education in the Philippines along with reduction in government spending on many social programs, had a negative impact on the lives of working population. South Korea, for over a decade, had been winding up labor protections resulting in increased inequality.Indonesia introduced conditional cash transfers with reduced labor protections. The ongoing cash-transfer program in Thailand was criticized by Thailand’s National Economic and Social Development Council (NESDC). The NESDC revealed that half of Thailand’s poor did not receive the cash handout and 90% of those who were receiving it were not under the national poverty line.
In Sri Lanka, the current economic crisis that affected 12.34 million people out of Sri Lanka’s 22.16 million was certainly the outcome of neoliberal policies of the ruling elites. Sri Lanka’s social welfare programs were in complete shatters.
Last year, fulfilling the conditionalities of IMF, the Sri Lankan government decided to restructure its domestic debt by using pension funds. Citing its devastating impact on employees’ life savings, more than 80 Sri Lankan organizations and trade unions wrote a letter to the IMF. They said that subjecting workers’ pension funds to domestic debt restructuring “will diminish the returns to wage-earners and deplete the fund to half its current value.”
They also blamed IMF for crushing Sri Lanka’s economy through their economic prescriptions.They said:
“Your (IMF) debt restructuring program is crippling working people in Sri Lanka who run our economy and create value in our society. The economic reforms you have imposed on us, without reflecting on the negative consequences of the previous reforms enacted over 16 IMF interventions, are crushing our economy.”
According to the studies of the International Labor Organization (ILO), austerity pursued in the name of macroeconomic stability, had destructive social impacts on low income populations. It caused detrimental impact on low-income women in Asia and it perpetuated their oppressive and subordinate status in society. The so-called successful Asian economies achieved their aggressive economic growth by marginalizing women and pushing them into unsafe and poorly paid informal jobs. About 95% of women in South Asia are employed in informal jobs, without any labor law protection or social benefits. Also, increasing migration was breaking down their family structures. Shrinking of government-funded services had further been impoverishing women, aggravating gender inequality.
One of the austerity measures that affected youth including young women was the meager funding for unemployment protection. In a 2021 report, the ILO stated that unemployment protection remained the least widely implemented branch of social security. In 2020, its legal coverage was 36.6% in the Asia and the Pacific, compared to 64.2% in the Americas and 82% in Europe. The unemployment coverage is not enough considering the employment situation in Asia. Unemployment in the Asia-Pacific region is at 4.2%, i.e. 87.8 million out of work in 2024.
The neoliberal-driven austerity measures, imposed on the people, further aggravated the problems of poverty, inequality, and social exclusion in many Asian countries. The working people in Asia have all along been raising their united voices against neoliberalism. Only the might of the unity of working people could pressurize the ruling establishments to give priority for the social welfare and protection of the weaker sections, while planning for the domestic economic development.
N. Gunasekaran is a political activist and writer in Chennai, India.
From The Progressive Populist, September 1, 2024
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