NEWS - Analysis Thai Factories Hit

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Subject: NEWS - Analysis Thai Factories Hit by Expulsion of Myanmar Workers

Monday, December 13 12:38 PM SGT 

Analysis Thai Factories Hit by Expulsion of Myanmar Workers
(Analysis from Asia Today, Australia's regional business magazine.
Contact: asiatoday(at)compuserve.com 
BANGKOK, Dec 13 Asia Pulse - Around the middle of October, Paniti
Tangpasri, president of the Tak Chamber of Commerce, was angry at the
Thai government. By the time November arrived, he was furious. Paniti
wasn't the only one. Factory owners all over his province, which borders
Burma, are livid over a sudden crackdown on, and deportation of, illegal
foreign workers - most of them Burmese. 

"A lot of factories have basically shut down because they don't have
workers," Paniti says. "Unless the government comes to its senses, many
will go out of business." Many of the dozens of factories in Tak and
other border provinces are joint ventures with Taiwanese and Hong
Kong-based garment firms. Most of the goods they produce are shipped to
the United States to major chains such as Walmart and The Gap, according
to sources in the Thai labor movement. Even media-giant Time Warner is
apparently involved, as some goods are patterned with its licensed
Looney Tunes characters.

Thai authorities are known for going the extra mile to please foreign
investors, and some businesses now affected have received incentives and
privileges from the Board of Investment. Pleasing foreign investors is
not a concern this time. This crackdown is payback, and the object of
Thailand's revenge is neighbouring Burma and its ruling generals. 

During the past two months, relations between Thailand and Myanmar have
plunged to their lowest level in more than a decade. The rift came when
five Burmese student rebels invaded Burma's embassy in Bangkok and held
more than 40 diplomats and foreign visitors hostage for 25 hours -
demanding that Myanmar's military government release political prisoners
and open a dialogue with the democratic opposition. Thailand's Deputy
Foreign Minister, Sukhumband Paribatr, negotiated an end to the crisis,
exchanging himself for the hostages and allowing the gunmen to be flown
to the border, where they escaped into a rebel-held area in the Burmese
jungle. 

Myanmar's generals went ballistic. They accused the Thais of conspiring
with the hostage-takers, and demanded their arrest, despite the fact
that they were now inside Myanmar. The regime closed the entire 2,100-km
border and cancelled all contracts with Thai fishing vessels, forcing
them out of Burmese waters. "Thai businesses are losing about 40 million
baht (US$1 million) a day because of the border closure," Paniti says.
"The Burmese are suffering also. I don't blame the Burmese government. I
blame the hostage-takers and the Thai government." 

Thai diplomats have negotiated to get the border open, but the Burmese
have refused to budge. Hla Maung, Myanmar's ambassador to Thailand, said
the border would not reopen until the gunmen were brought to justice.
While much of the Western world has shunned Myanmar's military
government because of its appalling human rights record, Thailand has
been the chief proponent of constructive engagement, a policy of
expanding diplomatic and business ties with the regime in Rangoon in the
hope of moderating the generals. 

After a month of intransigence from Myanmar, the Thai government decided
to hit back. Ever since the economic crisis struck in 1997, Thailand's
labor minister has been advocating sending the one million or so illegal
workers in Thailand home in order to make jobs available for unemployed
Thais. But with inflation pushing wages higher over the years, many
labor-intensive businesses have come to rely on illegal immigrants - no
secret, and various Thai governments have looked the other way.
Meanwhile, thousands of Thai laborers have been working for better wages
in the Middle East and other locations.

Factory owners have said that most Thais don't want the jobs, and if the
government forces them to pay the minimum wage of Bt130 (US$3.25) a day,
it will eat into their competitive pricing, which is already
diminishing. Business lobbied against the labour repatriation plan, and
slowly the government began granting more exemptions until the policy
became meaningless.

Now, Prime Minister Chuan Leekpai has decided to put the policy into
full effect, and tens of thousands of mostly Burmese illegals have been
rounded up in Tak and other provinces for repatriation. Burmese army
units have told the Thais they will shoot anyone who comes across,
Burmese or not, and Thai police have been dumping the illegals in
isolated spots away from Burmese checkpoints or military bases. Many
Burmese have then been sneaking back into Thailand.

Prime Minister Chuan says the deportations will continue. As for Thais
not wanting the jobs, labor activist Phil Robertson disagrees. "There
are plenty of Thai families in the rural provinces that would send their
sons or daughters to work there for the minimum wage and benefits. But
these factory owners were paying half that with no benefits. They would
still be competitive if they were paying the minimum wage."

Robertson adds that the composition of the illegal workers, who are also
employed in the gem polishing industry among others, would surprise
many. "These aren't all people with fourth grade educations," he says.
"While there are many Karen and Mon, there are also Burmese from Rangoon
and Mandalay who were second-and third-year university students, but the
junta has shut down all the universities. The fact that they would
travel so far to work illegally in a Thai factory for less than the
minimum wage shows just how desperate the situation in Myanmar is."

The Thai government is well aware of that. And it is hoping that by
sending the Burmese workers home, the junta's decision to shut the
border will backfire. In mid-November, Thai Foreign Minister Surin
Pitsuwan said he thought there would soon be some progress in reopening
the border.

Analysts in Thailand said the reason was the upcoming ASEAN ministerial
meeting. ASEAN has stood behind Thailand in its handling of the embassy
siege, and if Myanmar maintains its stance of attempting to punish the
Thais over the issue, it could find itself isolated within the only
international grouping that has welcomed it as a member. 

ASIA PULSE