Asia's Have-Nots Push for Bigger Piece of Economic Pie

Asia has emerged into a global economic power in the last decade

. With China and India leading the way, the region has become the world's manufacturer as factories from Dongguan to Dhaka pump out everything from shirts and shoes to televisions and computers and the growing economic clout of the region has led many to label the first hundred years of the new millennium as the "Asian Century." But for those that are responsible for much of that growing economic gain, the payoff has not been forthcoming.

On Monday, around 60,000 garment workers began a week-long strike in the capital of Cambodia, Phnom Penh, to protest low wages. It is just the latest in a series of walkouts that have swept Asia as workers have started to stand up to meager salaries, deplorable working conditions, and long working hours in factories throughout the developing world.

Since June, China has seen a wave of protests sweep through predominantly foreign-owned factories while in Bangladesh, thousands of textile workers seeking higher pay clashed with police last month, injuring 500. In Vietnam, thousands went on strike in April at a Taiwanese-owned shoe factory.

These strikes have raised some uncomfortable questions for both the governments involved and the companies, who have need to balance corporate codes of conduct and brand image with thinning profit margins and rising costs. For corporations, the rising costs have cut into the bottom line, forcing many to reevaluate their business models and future plans in Asia. Already some are looking to shift production to lower cost centers Foxconn recently announced it was shifting its production facilities from the Pearl River Delta to Henan Province while others are shifting their market strategy to take advantage of a new consumer class emerging in the region. But these are both just short term gains. Before long, the costs savings of operating in Asia for export will be gone. And then, the corporations will either reap the rewards of a domestic sales policy, or see their profits dwindle away.

For governments, the situation is more critical. The first decade has seen double digit growth throughout Asia. In countries like China, the drive from third to first world status has lifted millions out of poverty. But the cost of that rise is now beginning to bite back. The private corporations, corrupt officials, state-owned companies and property speculators are the ones reaping the rewards. The migrant laborers that built the boomtown of Shenzhen are not. The result, China has seen a surge in "mass incidents" of social unrest as the have-nots have increasingly demanded their share of the economic dream.

The growing economic gap between rich and poor is having an effect throughout Asia. Labor protests in Malaysia, strikes in Macau, and political turmoil in Thailand are tied to the poor rural population's grievances with the entrenched urban elite. Policies like China's Contract Labor Law have helped reduce some of the simmering tension, but until the region's poor masses begin to profit in the same manner as their governments and rich elite classes, the potential for unrest will remain high.

Asia's Have-Nots Push for Bigger Piece of Economic Pie

By: Dezan Shira & Associates

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