© Casa Verde Publishing, 2006 · ISSN 1681 2816

Journal of Societal & Social Policy, Vol. 5/1: 1-20

Social Development in Japan: A Focus on Social Welfare Issues
Rajendran Muthu
Iwate Prefectural University, Japan
Abstract Although being famous for its economic performances, Japan has built – since the Second World War – a relevant welfare state system. Nonetheless, the Japanese welfare state has its lights and shades. In this article social welfare issues are taken into consideration, focusing in particular on elderly, children and women minority groups. These groups, as well as migrant workers, are particularly subjected to discrimination in the Japanese society. The article also analyses the role of civil society in Japanese social welfare. Keywords: Japan, social development, social welfare, ageing, social security, minorities.

Introduction “Social development refers to the development of society as a whole, with economic, political, cultural and social dimensions all having a crucial role to play within a holistic and integrated model of development. This is a people-centered understanding of development, in that well-being of people is assured only when all aspects of society are conducive to their well being.”1 Social development is undoubtedly a multidimensional process involving a range of factors including political, socio-economic, cultural and legal aspects as well as a multi level activity involving the State and its institutions, civil society and even the international community. Apart from transparency and accountability by the State, the vital ingredients for social development are: a sound economy, rule of law, effective and sustainable delivery of essential services, capacity building or human resources development and social integration which enables all social groups to lead a productive life in the context of a harmonious environment. In this context Japan achieved phenomenal economic growth beginning the mid 1960s to emerge as a super economic power in the early 1970s. The creation of a close matrix between government and business leading to the creation of “Japan Incorporation,” concepts like lifetime employment, strong work ethics, massive investments in education and health and a rapidly expanding world economy propelled Japan as a rising economic star on the world stage in the 1970s.

Rajendran Muthu: Social Development in Japan: A Focus on Social Welfare Issues

Japan also emerged as an egalitarian society with a reputation as the safest country in the world in terms of personal safety. Although crime rates are rising, Japan has one of the lowest crime rates in the world. The number of cases reported to the police in 2005 totalled 2.2 million while the number of arrests made by the police was about 650,000. Corruption is minimal and the police force is highly disciplined. The Judicial system is relatively free of scandals. Democratization of Japan and the determined efforts to create an egalitarian society backed by a rapid expansion of the educational system, provided the country with an abundant supply of workers who were imbued with a high sense of loyalty in the 1970s and 1980s. Education in post-war Japan not only embodied the principle of egalitarianism but it also served as an engine of social development by nurturing human resources for the rapidly expanding economy in the period 19701990. The focus on moral education reinforced Japanese work ethics while a degree from an elite university was a passport for a stable career in a reputable company or a fast track job in the bureaucracy. High expectations and high emphasis on stiff competition, cram schools, etc. were hallmarks of the Japanese education system. The competition started at a very young age where toddlers had to endure the rigors of competition to enter good or top rated pre-schools which prepared these children for the entrance examinations of best kindergartens. The kindergartens in turn prepared the children for the entrance examinations of good primary schools, junior high schools, high schools and eventually for the entrance examinations to reputable universities. The educational system was undoubtedly a cornerstone in the emergence of Japan as an economic superpower in the 1970s. But the pressure cooker educational system soon extolled a heavy toll especially on Japanese students who could not withstand the rigors of a highly competitive educational environment. Bullying, truancy, school violence, juvenile delinquency, hikikomori, deteriorating morals revealed major cracks in the nation’s educational system which was once touted as one the best systems in the world. Japan’s Social Welfare System: Major Changes and Development Japan’s transition from a welfare system based on charity and benevolence to a welfare state was largely accomplished as the nation rose from the ashes of the Second World War to join the ranks of the developed nations in the 1970s. Under the Allied Occupation of Japan (1945-1952) commonly refereed to as the American Occupation, major initiatives were undertaken to reform Japan’s social security system. Legal provisions were provided by the new constitution which stated that the Japanese people shall have the right to maintain minimum standards of wholesome and cultured living and that the State shall use its endeavors for the promotion and extension of social welfare and security and of public health for this purpose. Subsequently in 1961, a medical insurance and pension system to cover all citizens was introduced in which participants paid insurance premiums and prepared themselves for such risks as sickness and old age (cf Muthu, 2000). -2-

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The next important reform in Japan’s social security system was initiated in the 1970s amidst accelerated economic growth which began in the 1960s, ageing population, unprecedented growth of nuclear families, changing attitudes towards the elderly, politicization of social security issues by the Liberal Democratic Party (LDP) etc. In 1973 major revisions were implemented in the nation’s pension as well as health insurance schemes. Substantial benefits were incorporated into the pension system2 to reflect economic growth and improved standards of living while contributors were given greater access to medical benefits thus escalating pension and National Health Insurance costs. At present one-third of the cost of national basic pension is financed by tax and the remaining by insurance premiums. Unfortunately, the oil crisis in early 1970s brought about serious economic repercussions to the country thus compelling the government to resort to Government Bonds which subsequently imposed a major burden on national finances. The problem was further aggravated by the rapidly graying population, which escalated health care costs and strained pension schemes.3 To add fuel to the burning fire, increasing life expectancy, lack of nursing homes for the elderly as well as inadequate home nursing services, encouraged the elderly to stay longer in hospitals thus treating these institutions as “social salons.” The “social hospitalization” syndrome not only strained the resources of many general hospitals but it also imposed an additional burden on the National Health Insurance scheme.4 In the light of increasing health costs, measures were initiated for a more equitable sharing of the burden among the three health care systems (i.e., employees health insurance, health insurance for the self-employed and health services for the elderly), central and local governments. Meanwhile employees and selfemployed were required to pay 10 percent and 30 percent respectively of medical costs subject to a maximum of 63,600 Yen per month.5 The pensionable age was also raised from 60 to 65 in stages, beginning with the 21st century, together with the introduction of partial pension being provided between ages 60 and 65. The latest move was the introduction of Kaigo Hoken or Long Term Care Insurance Law, which was implemented in April 2000 to provide improved care and services for the elderly including home nursing.6 This concept of having the society as a whole rather than individual family, shouldering the burden of elderly care, signifies a complete break from Japanese tradition. Traditionally wives, daughters and daughters-in-laws have shouldered the burden of providing care and services for the elderly.7 But the new law is recognition that families have been overburdened as a result of lack of initiatives by the government in caring for the welfare of the elderly. Moreover, Kaigo Hoken would also relieve the burden on many women who have sacrificed their careers and health to provide care for their elderly. This law, apart from reducing the incidence of “social hospitalization” would also enable more women to participate in the labor force. Kaigo Hoken would also spur the creation of private enterprises to provide care and services for millions of elderly thus providing a boost for the flagging economy. -3-

since home helpers involved in home nursing care is expected to rise from 170. Declining fertility rates will further compound acute shortage of caregivers in the foreseeable future given the fact that the workforce is expected to shrink at a rate of 1 million people a year after 2010 (cf Muthu. shrinking population and escalating social security costs. In simple terms. rationalization of medical and retirement benefits for recipients and to ensure that a proper balance is maintained between levels of benefits and that of real income for future generations.3 workers supported one person aged 65 or above in 1995. Japan has relatively few options except to further rationalize its social security system. 2000). Moreover it has important ramifications on manpower resources. there will only be two workers to support one elderly person in 2025 and 1. to increase fertility levels. It has also been predicted that social security funds will be exhausted to the point of bankruptcy by 2020 mainly as a result of the ageing society. integration of social security systems and structural reforms in long-term care insurance system as well as privatizing some aspects of care e. to take steps to compel all eligible citizens to contribute to the pension scheme. 2. to minimize its shrinking workforce and maximize potentials of its senior citizens. financial burdens on working population will double accordingly in 2025. to accelerate the privatization of home nursing care and other aspects of health and medical care. More significantly. particularly in the context of an ageing and shrinking population. Currently 6 million self-employed and other non-employees (out of 20 million people in this category) aged between 20 and 60 do not contribute to the basic pension known as “kokumin-nenkin”10 (mainly because they are wary of the future of the pension system).e.8 An ageing population as well as declining fertility rates will not only lead to a fall in labor supply but also increase welfare dependent ratio. These measures include: 1. The proportion of the elderly (65 years and above) to the population is projected to increase from 20 percent in 1998 to about 30 percent in 2020. While 4. 4.g.000 in 1999 to 580.3 Japanese is expected to be over 65 or above. for the elderly.000 by 2010. Therefore.5 workers to do so in 2050.Rajendran Muthu: Social Development in Japan: A Focus on Social Welfare Issues The implementation of Kaigo Hoken imposed an additional financial burden on the government and taxpayers. 5. 3. 1 in 3. a rapidly graying society9 would also cause a fall in savings ratio apart from imposing a major strain on social security funds and ballooning national debt. -4- . Aging and Social Security Costs One of the most controversial issues in Japan is the nation’s capacity to shoulder its welfare burden. i.

8. Despite the enactments of regulations and policies to promote gender equality and better working environment for women.12 Unless the society changes its attitude and perceptions on the role of couples and housework. These were (i) the Basic Law for Gender-Equal Society (1986) and (ii) Equal Employment Opportunity Law (1990).11 7.13 Gender Discrimination Gender related issues came to the forefront in Japan in the light of an acute shortage of workers compounded by ageing and falling birthrates as well as the universal movement towards elimination of gender discrimination following the inception of the Convention on the Elimination of All Forms of Discrimination (CEDAW) in 1979. wards and towns as of 2004) which have made an impact on society by putting gender equality on local government agenda. especially from elite universities. extreme division of labor and segregation still exist at work and home. Gender discrimination in employment continues to exist by transforming itself from direct to indirect discrimination (especially in the corporate sector) in the form of hiring. bureaucracy and corporate sector is still minimal. had a profound effect on Japan. -5- . are hired on the fast track or sogo-shoku system whereby these workers could move up the ladder to become company presidents. thus aggravating falling birthrates and shrinking working population which are major concerns for social security planners and the nation at large. Male workers. to eliminate gender discrimination at work and home. Women representation in decision-making in politics. to initiate innovative programs to involve the elderly in productive activities. Female workers on the other hand are largely hired on the regular track for clerical or office jobs. Many local governments have formulated ordinances to promote gender equality (942 prefectures and 109 cities. In addition. gender issues persist in a society that is still paternalistic.g. 5/1 6. Vol. which highlighted various forms of discrimination and set up an agenda for national action for women. women will continue to consider marriage and childbirth a burden. The wage gap between male and female part-time workers is as high as 50 percent and women occupy only 12 percent of low managerial position. Japan enacted two important legislations related to gender. Despite new laws banning sex discrimination in the workplace (April 1. 1999) to promote equal participation in society (irrespective of gender). the government also initiated a Domestic Violence Law in 2001 which will be discussed later.Journal of Societal & Social Policy. CEDAW. increased child support care and facilities and more flexible working systems etc. promotion etc. to encourage more married women to work by providing additional incentives e. 1999) and the basic law (June 15. wages.

Average time worked by freeters was 4-9 days and their average monthly pay was Yen 140. and the reluctance of the private sector in employing inexperienced graduates. Japan needs to tighten loopholes in its legislation to ensure equal remuneration for work of equal value (including part-time work) apart from addressing the above mentioned deficiencies in order to promote gender equality in a nation that is still dominated by males. Currently there are about 25. Hence.14 The homeless were subjected to social discrimination and -6- . a growing number of Japanese youths are also opting for a nontraditional work as well as lifestyle. They are merely seen as sponging off their parents and as such are a concern for a society that has placed a high premium on work ethics. A decade of recession exacerbated by rising unemployment (currently at 5. This number is projected to increase to 10 million by 2014. Hence it is obvious that major economic and educational reforms are needed to revitalize the economy and also provide greater incentives and training for young people to pursue more stable employment. Cuts in childcare benefits for single mothers pose a problem for these mothers. restaurants etc. Moreover.300 homeless in Japan. has contributed to the rapid increase of freeters in a society which was once acclaimed as a dynamic and productive economy. freeters who do not contribute to national pension and medical schemes will also impose a burden on social security foundations which are already undermined by a large graying population. In 2005 it was estimated that freeters totalled 5 million out of a workforce of 65 million. Moreover. Child care facilities are still lacking.7 percent). as well the disintegration of life time employment in the private sector. Most of the freeters were employed in the service industry including retail outlets. unlike many of their parents who were beholden to the lifelong employment system which offered much security to employees who were once dubbed as “workaholics. Without stable jobs and income. 60 percent of freeters are women and the majority is aged between 20-25 years old. Homeless One of the latest issues that have been gaining some prominence in Japan’s social welfare system is the problem of homeless.” Many of the freeters are labelled as losers in society. The “freeters boom” was also fuelled by the service industry which preferred to employ workers on short term or temporary contracts for low wages. male freeters who will inevitably marry late will aggravate falling birth rates.000 per month. Freeters Freeters (furita) is the Japanese expression for young people (excluding students and housewives) who are engaged in part-time or temporary employment.Rajendran Muthu: Social Development in Japan: A Focus on Social Welfare Issues At home women still shoulder most of childcare and nursing care of dependent family members.

Nevertheless Japan’s homeless problem is “puny” by Asian or even international standards. public shelters were not available for homeless people who were young and healthy. In 2005 some youngsters were arrested for the homicide of a homeless man. PwDs have also been discriminated to a certain -7- . 24. they also received Yen 31. and foreigners and migrants from other Asian countries and from the rest of the world. except during winter.16 Persons with Disabilities Persons with disabilities (PwDs) over the age of 18 totaled 6. Japan’s Minorities The treatment meted out to the homeless also reflects the social exclusionist tendencies of the society at large. Only 30 percent of Koreans have been naturalized although about 90 percent of Koreans were born in Japan. Counseling and advice on work related issues as well as daily necessities such as meals and clothing were provided in addition to a daily allowance of Yen 400. Job counseling was also not offered for this marginalized group. Vol. where the vast majority of the population belongs to the middle class.15 The Government is also viewing the issue of homelessness from a new perspective. He stated in March 2006 that racial discrimination and xenophobia do exist in Japan.Journal of Societal & Social Policy.e. numbering 607. If the residents in the centers secured employment.570 respectively in 2004) have also been subjected to social discrimination. This figure included 3. xenophobia and related intolerance. since 2005 shelters called SelfDependence Assistance Centers were established to provide accommodation for any homeless person for two months on condition that he or she is willing to work.4 million in 2004. which would include training apart from assisting them to secure their own accommodation. Prior to the year 2000. Ainu and the people of Okinawa. It was only several years ago that they were exempted from using their thumbprints in their identification or registration cards. But it is a problem that is generating much interest in a society known for its “egalitarianism”. Korean (North and South) and Chinese residents (or zainichi. However. The Government has also launched a self-dependence program for the homeless. Japan’s prejudice and discrimination against minorities was neatly summed up by the United Nations Special Rapporteur (Mr Doudou Diene) on contemporary forms of racialism.4 million persons with physical disabilities.000 Ainu (natives of Japan) who live mostly in Hokkaido also encounter discrimination. and that these affect three circles of discriminated groups: the national minorities— the Buraku people.419 and 487.000 to purchase work related necessities like clothing and shoes. In this respect the social ostracization of the “eta” and “burakumin” numbering 3 to 4 million has been well documented. racial discrimination. They were also subjected to violence perpetrated by young people. 5/1 ridicule by the majority of citizens who considered them as parasites. Korea and China. people from and descendants of people from former Japanese colonies i. while the remaining has mental disabilities.

Rajendran Muthu: Social Development in Japan: A Focus on Social Welfare Issues

degree although they are entitled to special disability benefits and pensions.17 Persons with disabilities employed by the private sector comprised 1.5 percent of total number of regular employees in 2004. There are about 350.000 blind people in Japan but only 30 percent of them are employed, mostly as acupuncturists and masseuse. There is only one blind lawyer in Japan. The situation is partly due to the fact that Japan does not have any legislation e.g. Disabilities Discrimination Act although the Government initiated an Action Plan for Persons with Disabilities in 1995.18 Hibakusha and Leprosy Victims Groups such as Hibakusha (victims of the atomic bombs in Hiroshima and Nagasaki) and former leprosy patients are also subjected to social discrimination. Social prejudice still haunts about 300.000 atomic bomb survivors on grounds that they have been exposed to radiation.19 Many of these victims who experienced marriage as well as employment discrimination are also reluctant to be registered as Hibakusha although they are entitled for better social welfare assistance and grants. Even the offspring of Hibakusha experience some levels of social discrimination, although researchers have concluded that they see no evidence that second generation Hibakusha have a higher ratio of diseases e.g. leukemia, cancer, cataracts, thyroid disorders etc. as compared to their parents (with the exception of those children who were exposed to radiation as a fetus). Leprosy patients are yet another illustration of social discrimination. Leprosy victims have been subjected to contempt, ridicule, isolation and ill treatment in Japan for hundreds of years. In post-war Japan, these victims numbering around 10.000 were forcibly isolated in the country’s 15 sanitariums by virtue of the 1953 Leprosy Prevention Law. Once inside, most of these patients were subjected to harsh conditions including forcible sterilization. This Law which, was only repealed in April 1996,20 deprived many patients of their human rights for many decades. However, there are some positive signs that the Government is becoming more sensitive to the welfare of the ex-leprosy victims. In 1998 a group of former leprosy patients filed a Yen 115 million-damage suit in Kumamoto against the Government for maltreatment under the Leprosy Prevention Law. In May 2001, the Court ruled that the 1953 Leprosy Prevention Law violated the plaintiffs’ human rights and ordered the government to pay a total of Yen 1.82 billion (US$14.84 million) to 127 plaintiffs in a landmark suit. The Japanese Government under Prime Minister Koizumi decided not to appeal to higher courts since the leprosy law has inflicted untold hardships and humiliation on former leprosy patients, many of whom are elderly or already dead. This humanitarian gesture bodes well for the Government, which appears to be more flexible in dealing such patients. Currently, persons with Aids in Japan are also subjected to ostracization by society which is largely ignorant about the infection. Public and open discussions about the infection are rare thus breeding prejudices and discrimination against Aids sufferers.21 -8-

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Domestic Violence Domestic violence is another “area” that is becoming a national issue. Domestic violence cases in Japan increased from 14,140 cases in 2004 to 16,888 incidents in 2005. Women accounted for 97.6 percent of victims. Wife battery is relatively common in Japan, where one in 20 wives experience life-threatening violence or severe violence. Japan implemented the nation’s first Domestic Violence Law in 2001 (i.e., Law for the Prevention of Spousal Violence and the Protection of Victims) against domestic violence, giving courts the power to issue restraining orders on offenders. This law also established a system of restraining orders in which victims of abuse could file for a protection order, preventing their spouses from coming near them for a period of 6 months. Under this law, health and social workers were also required to report suspected cases of abuse to the police. The Law also paved the way for an increase in the number of shelters for abused women, which currently stands at only 20.This law also required local governments to provide services for victims. However, protection orders issued by the court are not enforced strictly and emergency shelters for abused women are still lacking. Moreover, many NGO’s providing shelters for such women do not get much financial aid from the government. Given these setbacks, domestic violence is still prevalent in the society. Child Abuse Child abuse cases which increased from 10,000 in 1999 to 23,738 cases in 2003 have also attracted much attention. The Health, Labor and Welfare Ministry acknowledged that this figure merely represents the tip of the iceberg. In the year 2000 the Government legislated the Child Abuse Prevention Law which granted the government the right to challenge parents’ custody rights and ban abusive parents from meeting or corresponding with their children. It also requires teachers, doctors and welfare officials to report child abuse cases to the authorities.22 Despite the implementation of this law, child abuse is still prevalent in the Japanese society. Stress, marital discords, lack of support from close relatives have been cited as major reasons for increasing levels of domestic violence. As for child prostitution, the Government had more success. Legislation against child prostitution and child pornography had a strong impact in virtually eliminating child prostitution in Japan. Other Forms of Violence Lately Japan has also been gripped by a rise in violence, “rail rage” (shanai boryoku or carriage violence), crimes particularly teen-age crimes, bosozoku (teen bike gangs), juvenile delinquency, bullying in schools and a host of social maladies. The number of cases reported to the Police in 2005 rose to 2.2 million and the

-9-

Rajendran Muthu: Social Development in Japan: A Focus on Social Welfare Issues

number of arrests was 649,503. Of these, major felony offenses e.g. murder (1,392), rape, arson and robberies etc. accounted for 11,360. Bosozoku (teen bike gangs) is the latest scourge among Japanese youth since they accounted for about 75 percent of serious juvenile crimes including murder, manslaughter, assault and extortion in 2004. Bosozoku gangs, who are increasingly involved with yakuza (organized crime syndicates), have also disrupted public festivals apart from defying law and order. In an effort to curb bosozoku, the Diet revised the nation’s juvenile law in 2000 by lowering the age at which teenagers could be prosecuted from 16 to 14. In addition, all juveniles aged 16 and above accused of murder would be subjected to criminal trials as adults. There is also increasing pressure from the society to make bosozoku membership a serious crime as in the case of the yakuza. Incidence of violence in schools and severe bullying (ijime) is also a concern. Bullying at Japanese public schools (elementary, junior and high schools) rose by 5 percent in 2005 to 25,000 incidents. 35,392 violent acts were committed in public elementary, junior and high schools in 2003. Psychological Maladies At the other extreme, social withdrawal is also becoming an acute problem. Terminology, like “hikikomori” (shutting off from the outside world) and “kireru” (when people suddenly snap) are also gaining prominence in a society that has been known for its social stability, profound values and work ethics. Hikikomori, which attracted public attention in 2000, afflicts about one million Japanese. It is increasingly common among children and young people. When the issue was first publicized in 2000, about 80 percent of those afflicted by hikikomori were in the 15-23 age group.23 Suicides are also increasing as evident by the fact that a record of 34,000 took their lives in 2003. In this instance Japans figure is 10th highest in the world and the worst among developed nations. Suicide is the number one cause of death among males in their 20s and 30s. Rising violence, symptoms of social withdrawal as well as suicides could be attributed to a combination of factors including recession, unemployment, erosion of moral values, rising levels of stress within a highly competitive and “pressure cooker society” which looks down on failures, marital breakdowns24, stultifying school system and rising indiscipline at home and schools, etc. Drugs Drugs do not feature prominently as a major issue, although drug usage is becoming more prevalent particularly among youths. After alcohol and nicotine, the major substance of abuse in the society is methamphetamine, which is known as “shabu” or “speed” (a powerful synthetic stimulant drug) and cannabis (hashish and marijuana). Drug abusers are estimated at around 4 million with the bulk of them being addicted to amphetamine. A total of 15,582 persons were arrested for - 10 -

closer surveillance on the activities of the yakuza. Furthermore. which appreciated strongly in the 1980s. which fetches between Yen 2000-3000 per gram in the black market. Of these workers.000 have overstayed their visas. an estimated 250. Vol. More than 90 percent of annual drug related-arrests involve amphetamine (which has about 2. Some marijuana is also cultivated locally. Latin America etc. while marijuana is largely brought in from the Golden Triangle by illegal migrants and couriers. Thailand. Organized crime syndicates have also succeeded in building a strong distribution network to peddle amphetamine to an increasing number of teenagers and young people afflicted by social and psychological woes mentioned earlier. The pull towards Japan was stronger among those workers who were desperate to earn the valuable Yen. declining standards of discipline and morality among teenagers. In addition. Currently. Cross-Border Migration Issues Undocumented Workers For more than a decade. anti-drug education at schools and home and closer cooperation and collaboration with drug enforcement agencies in Southeast Asia could reduce the incidence of drug abuse in the society. etc. there are several hundred thousand illegal workers including those from the Philippines and Thailand who have been brought into the country by the yakuza working in tandem with recruiting agencies within Japan as well as in Southeast Asia. 5/1 drug offenses in 2005. increasing pressures and stress levels at home and school. The exodus was further aggravated by economic forces in sending countries like Philippines. Indonesia etc which “pushed workers outside” to overcome massive unemployment at home as well as to earn foreign exchange. widespread use of cell phones and the Internet in trafficking drugs have not only made detection more difficult but also facilitated the sales of such drugs. there are about 670. Nevertheless. Most male illegal workers are employed in small and medium sized enterprises in the manufacturing sector (about 75 percent) while the bulk of female legal and illegal mi. The rapid increase in amphetamine use could be attributed to the relative cheapness of the drug and high profits per gram (30 times more profitable) as compared to cannabis. rising crime rates. Japan – given its affluence and dwindling labor force – has been a magnet for documented (legal) and undocumented (illegal) workers from Asia.2 million users in the country).000 documented foreign workers in Japan accounting for about 1 percent of the working population. Most amphetamines are smuggled from China and Myanmar. No major seizures of marijuana has been recorded in the last 20 years after the much publicized arrest of Paul McCartney (the ex-Beatle) who was arrested for possessing 219 grams of marijuana in 1980.11 - . drugs could become a major problem judging by the rapid increase of “speed” users.Journal of Societal & Social Policy. Strict enforcement by the police.

Increased levels of communication and collaboration with regional governments on: (i) recruiting and dispatching legal migrant workers. Japan’s efforts to restrict migrant workers is severely handicapped by several factors such as ageing society. which were shunned by the locals. (iii) establishing joint mechanism to monitor all aspects of labor migration etc. Simply adding more senior citizens and women to the workforce and making use of IT will not be sufficient to deal with the problem.25 But their implementation and effectiveness is questionable given the vulnerable position of illegal workers who are largely at the mercy of employers.Rajendran Muthu: Social Development in Japan: A Focus on Social Welfare Issues grants (principally from Philippines) are employed in the services industry. Thus Japan has hardly any recourse but to open its door wider to potential migrant workers especially from Asia. kiken (dangerous) and kitanai (dirty). President of the powerful Japan Business Federation (Nippon Keidanren). Japanese authorities turned a blind eye to these migrant workers who were hired to do the “3K” jobs: kitsui (hard). shortage of IT related professionals. To facilitate the orderly inflow of migrant workers the Government has to: (i) initiate appropriate and transparent policies. Although tens of thousands of illegal workers have been deported since then by the authorities. This “altruistic” policy meant that Japanese Labor Laws cover even illegal foreign workers.26 Beginning mid-1990s.12 - . declining levels of fertility. These authorities were aware that foreign illegal workers of either sex could be marginalized. unskilled foreigners in Japan faced hardships as a result of the economic recession and subsequent tightening of the labor market. 2000). laws and regulatory measures to remove unnecessary obstacles for legal migration. . increasing demand for “3K” jobs (particularly with the implementation of Kaigo Hoken) to provide services and care for the elderly. Okuda stated in 2006 that Japan should aggressively accept foreign workers in all business categories. Finally. and (iii) curb the role of yakuza in such activities. could also be more helpful in regulating migrant workers apart from curbing the inflow of illegal workers. migrant workers still form a formidable workforce in “3K” jobs. job brokers etc. controlled and subjected to low wages and high risk situations and that they could be repatriated or expelled when their services were not required. The acute shortage of labor and the need to bring in migrant workers was clearly illustrated by Hiroshi Okuda. a euphemism for the sex industry (cf Muthu and Hisashi. (ii) impose high criminal penalties for traffickers and employers of illegal workers. it is also essential for the Japanese Government and its powerful bureaucracy as well as the mass media to advocate concepts of global citizenship and multiculturalism to facilitate the inevitable increase of migrant workers in the near future. regardless of their nationality or visa status. the Labor Ministry announced as early as 1989 that Japanese labor laws protects all people working in Japan. To facilitate the inflow of legal and illegal workers. (ii) awarenessraising activities in Japan and sending countries on issues related to migrant workers.

Philippines. It also stressed that the sex industry in Japan accounts for 1 percent of GNP and that one “sex zone” in Tokyo which is only 0. wine and song at company expenses. In this respect.000 sex facilities including strip theatres. who entertained their business customers with women. and (vi) work with NGO’s in Japan and sending countries to ensure safe and humane repatriation of victims of prostitution.29 The rampant expansion of this industry has also engulfed tens of thousands of children who are forced to prostitute for a living in many Asian societies. As in the case of migrant workers.g.13 - . 5/1 Prostitution and Pornography The sex industry.: (i) the large and varied sex industry which was fuelled by freewheeling Japanese businessmen (particularly during the bubble economy). In countries like Thailand. bestiality. Philippines. the Coalition Against Trafficking in Women in Asia-Pacific (CATW-AP. Indonesia. Philippines which is heavily dependent on the reparations of earnings by its migrant workers. Cambodia.27 The demand for commercial sex in Japan was abetted by several factors i. (ii) impose stricter enforcement. sadomasochism. Since 1980s Japan achieved notoriety as one of the largest whorehouses for Asian prostitutes apart from constituting the bulk of sex tourists in Asia.e. (v) assist women in escaping from the clutches of organized syndicates. 2000) stated that Japan is the largest sex industry market for Asian women (with about 150. and Sri Lanka thus exacerbating child trafficking and prostitution in these countries.g. Meanwhile. has 35. illegal sex workers could be curbed to some extent if Japan as well as sending countries like Philippines and Thailand: (i) reevaluate immigration policies. porno shops. soaplands etc. In Japan pornography especially films. (iii) establish appropriate monitoring mechanisms.28 (iv) lax enforcement by relevant authorities and (v) slack compliance by sending countries e. incest has evolved into a billion-dollar industry. Despite an international campaign against commercial sexual exploitation of children. between 25-35 percent of prostitutes are children who are abused by foreigners as well as locals.000 nonJapanese prostitutes mainly from Thailand and Philippines). The rampant increase in prostitution including child prostitution has fuelled the explosion of pornography all over Asia. magazines comics and videotapes depicting explicit sexual encounters e. (iii) loopholes in the Prostitution Prevention Law (1958). Vol. peep shows. km.Journal of Societal & Social Policy. (iv) increase awareness raising activities on the issues of prostitution. which has become a multi billion-dollar industry in Japan. (ii) organized syndicates. the massive inflow of Japanese sex tourists into Asia especially Southeast Asia has contributed to the booming sex industry in the sub-region. Japan has also earned the distinction of being the largest producer of pornography . brokers and owners of “entertainment” outlets. particularly the yakuza who work closely with agents. has assumed the dimensions of a commercial sector with major linkages and repercussions on female migrant workers in the country. books.34 sq. agents and traffickers. sex telephone clubs. Japanese pedophiles are still found in Thailand.

Conditions inside detention centers. The above mentioned issues and anomalies need to be addressed by the appropriate authorities since they impinge basic human rights. violations against foreign nationals in detention centers and alleged beatings and physical abuse have brought an ill-earned reputation for Japan. Other Forms of Discrimination and Abuse Against Foreigners A number of related issues concerning legal and illegal migrants married to Japanese nationals and their offspring’s have also emerged in recent years. Government authorities including Police. 2. 3. .Rajendran Muthu: Social Development in Japan: A Focus on Social Welfare Issues materials in the world. Deportation Centers Deportation centers used for repatriating undocumented workers and visa “overstayers” is yet another issue. discrimination in property inheritance laws which allows children born out of wedlock to inherit only 50 percent of parents property. wide and discretionary powers given to administrators of such facilities. Gaijin Hanzai Lately. But adult pornography was untouched by the new legislation. and 5. status of about 1000 children who are stateless. Although such crimes accounted for about 2 percent of total crimes in the country. distribute or to sell child pornography or solicit minors for sexual purposes in Japan or abroad. the bulk of these crimes were visa related. This law which was mainly brought about as result of public outrage over stories about schoolgirls selling sex to older men made it a crime to produce. Immigration and Justice Ministry as well as the mass media should not fan social hysteria as well as aversion towards greater immigration by sensationalizing “gaijin hanzai” or crimes committed by foreigners. child pornography was still rampant until the passage of a law on pornography and child prostitution 1999. the prevalence of violence against foreign women by their spouses and partners. 4. Nevertheless it is a small move in the right direction to shed Japan’s image as one of the most licentious society in the world. rights of children in the case of deportation of a divorced foreign spouse. About 80 percent of child pornography materials distributed in the world were made in Japan.14 - . the refusal of the Japanese Government to grant resident status to a spouse who is divorced from a Japanese national. Although pornographic items for children were prohibited. denial of access to independent monitors to such facilities as well as language and cultural barriers. The issue was further compounded by the lack of transparency in penal and detention facilities. These issues include: 1. “gaijin hanzai” or crimes committed by foreigners have been given some prominence.

This could be attributed to the fact that State and Local Authorities play an overwhelming role in providing most of the funding and manpower requirements for social services in the country. 5/1 On the whole. . the Government took a small step in its endeavor to promote the spirit of volunteerism among the civil society (cf Muthu.” Moreover. 2004). 2004). the Law to Promote Specified Nonprofit Activities (also known as the NPO Law) was enacted thus enabling small grass-roots citizen’s organizations (voluntary organizations) to be incorporated and to receive public and private funding. Currently.15 - . More significantly. Nevertheless. Japan’s treatment of its Zainichi residents as well as Asian migrant workers are colored by the society’s perceptions that Asians are “inferior.g. Hence the spirit of volunteerism was not nurtured actively in postwar Japan. Volunteerism and local community participation in social work gained some attention in the aftermath of the Hanshin/Awaji Earthquake in January 1995. religious organizations and affiliated institutions.Journal of Societal & Social Policy. It is a sad reality that many of these religious institutions which are well endowed with resources hardly play an active role in social and charity work locally or abroad. As for charity and philanthropy. the aged and need for volunteerism created greater awareness for social work. which is known for its collectivism and concepts like giri (although this is undergoing change). the society especially the Corporate sector. In 1998. for its relatively strong ethics and collectivism. which resulted in 6. Vol.000 deaths. Role of Civil Society in Social Welfare One area that is sorely lacking in Japan is the spirit of volunteerism. the Government is also working out a scheme whereby all youths 18 and older are required to perform mandatory community service of three to four months after graduating from high school. Japan can emulate some of the positive aspects of social work and volunteerism in some Asian countries (cf Muthu. This could be made possible by shifting the date of university entrance examinations and job placements from spring to autumn. This incident jolted millions of Japanese out of their complacency to respond more positively to the plight of the victims and other disadvantaged groups in the country including the disabled. which is known. However. voluntary organizations and community participation in providing care and services are subdued in the nation. the majority of Japanese perceive that they are a heterogeneous race (despite the existence of a large Zainiich community) and that their culture is a mono-culture thus finding it difficult to accommodate migrant workers. has not been very charitable or generous in sharing its resources with NGOs and local welfare councils30 in the area of social work. Many Asian NGOs which are largely independent or which survive on minimal subsidies from the Government are a rarity in Japan. Subsequently social issues e. which are active providers of social services in many countries are conspicuously lacking in Japan. In this respect.

31 Overall. those performing “3K” jobs and those in the sex industry are treated shabbily. children and women in difficult circumstances. For the year 2005. bosozoku. a large trade surplus. Meanwhile its egalitarian approach to wealth distribution and capacity to save is unparalleled in the world. 2. 3. assets as well as appropriate measures and policies.200 (about US$600) is given to all pensioners who are 65 years and above. Rapid ageing. Currently a monthly basic pension of Yen 66.g. escalating social security costs and resulting public debt burdens as well as social ills like homelessness. into mainstream society. In addition. This scheme was divided into 3 systems: (a) employees health insurance (b) health insurance for self-employed and (c) health services for the elderly. Asia and the Pacific into the Twentyfirst Century: Prospects for Social Development. Conclusion Japan is evidently changing its perceptions and adopting a more caring attitude (albeit slowly) towards the elderly.g. shrinking population. Tan and Rowlands. voluntary and religious organizations as well as the corporate sector to maximize grassroots participation in social work. Japan has a well-established social with minimal social problems compared to many societies in the world (cf Tan and Dodds. 2002. disabled. In addition retired employees also receive either an occupational pension or gratuity.Rajendran Muthu: Social Development in Japan: A Focus on Social Welfare Issues The time is ripe for the society to emulate Singapore’s “many helping hands” approach by forging strong partnerships with local communities. 4. social security pension totaled Yen 44 trillion (about US$400 billion) per year or 9 percent of Japan’s GDP. Under the revised scheme. Notes 1. its social system has been acknowledged as one of the best if not the best in the world in terms of retirement and health care benefits particularly for the aged. a two-tiered public pension system was initiated. 2004). etc. rising social problems and the need to integrate the homeless. But its minority groups are subjected to discrimination while selective categories of documented and undocumented migrant workers e. New York (1998: 11). United Nations. This issue which is closely linked to basic rights could be alleviated to a certain degree with the establishment of an independent body to address human rights in the country. More significantly.100) per month is also provided to pensioners. discrimination against minorities and migrant are challenges confronting the nation.16 - . In addition an earnings related benefit averaging Yen 223. But given the nation’s financial resources e. .000 (about US$2. Japan should be able to weather most of its social and welfare problems in the near and medium future. its education system is still the envy of the world. Such a partnership is essential in the light of the rapidly ageing society. Economic and Social Commission for Asia and the Pacific.

The new system would enable people to appoint a guardian before their decisionmaking ability becomes impaired. In compiling prefecture-by-prefecture estimates.600 Yen per month. 10. In this context.18 million or 30 percent of all households in Japan’s 47 prefectures by 2020. about 60 percent of nursing care was provided by female family members in their 50s. (about 1900 pension funds) and a mutual-aid pension system for public officials. which is universal there is also a salary-based pension system for corporate employees. 5/1 Currently the three systems as well central and local governments share health costs under this scheme. March 20. if they can prove that they have worked for 26 days preceding the twomonth period. individuals are only eligible for benefits for two months at a time. Under existing legislation employers are obliged to grant workers shortened or flexible working hours if they have children under 1 year old. In this instance the Health.48 million). and a quarter of all caregivers were 65 years or older. 5. (ii) housewives. As of 2005 there were 68 million contributors to the Basic Pension Scheme which covered 4 categories.Journal of Societal & Social Policy. Labor and Welfare Ministry has started a scheme to provide financial assistance to entrepreneurs aged 60 or over to increase unemployment among the elderly particularly in the light of the fact that the age for pension age will be raised to 65 from the current 60 in stages beginning 2001. the National Institute of Population and Social Security Research revealed that households headed by people aged at least 65 are projected to reach 17.17 - .e. 8. Under current unemployment legislation. See Japan Times. 14. 6. the bulk of them merely carried garbage bags to collection sites more than once or twice a week while between 25-30 percent cleaned rooms or did the laundry. a recent survey indicated that 25 percent of husbands in dual-income families do not do any housework while working wives spent an average of about three and half hours on housework on a weekday. In addition to the basic pension system. The maximum payment for low-income earners was 33. (i) self-employed and others. In the past. The Institute also revealed that graying population in cities like Tokyo and Osaka would register a ratio of at least 30 percent by 2020. The plight of the homeless reveals that the nation’s welfare system has not only overlooked this group of people but also non-Japanese residents and many foreigners who are working in Japan. 9. 13. In conjunction with Kaigo Hoken. 15. 7. and (iv) public officials. In 2005. The homeless are also denied public housing which is only allocated on the basis of households . (iii) corporate employees. 12. In this case. i. social security benefits constituted 78 percent of retirement income for elderly households. which is administered by companies 11. Of those husbands helping their working wives. the Civil Code was also amended to introduce a new adult guardian system designed to provide legal protection for the mentally disabled and elderly citizens with senile dementia (estimated at around 1. 2006. Vol. the homeless—many of whom are involved in casual labor—cannot provide evidence to this effect.

12. 19.598 hibakusha were certified by the Japanese Government. See the Report of the UN Commission on Human Rights (UN-Doc. 23. and not to a single person although a woman with child qualifies for such housing. barrierfree access and promoting international cooperation and exchange for the disabled. 26. 25. 17.4/2006/16/Add2). The principle labor laws include: the Labor Standards Law (Rodo Kijunho). Nagasaki. This survey was conducted by Naoki Ogi and reported in Japan Times. See Statistics by Ministry of Health.2 percent. See Statistics on Trafficking and Prostitution in Asia and the Pacific by Coalition Against Trafficking in Wo- .000 people were living with HIV/Aids in Japan. removing psychological barriers. Following the implementation of this law. thousands of leprosy patients were confined involuntarily until the year 1996. 27.g.00012. the Minimum Wages Law (Rodosha Saigai Hosho Hokenho) and the Equal opportunity Law (Danjoo Koyo Kikai Kintoho). As of 2004.000 to 83. living in communities as ordinary citizens. About 380. 22. The apathy of the Government could also be illustrated by the fact that despite rising number of deaths among the homeless. It is also interesting to note that the society at large is highly prejudiced against homeless e. With a prevalence rate of 0. Divorces are rapidly increasing in the society. The 1995 Action Plan for Persons with Disabilities outlined a sevenyear Strategy (1996-2002) to integrate the disabled into mainstream society. Despite this law.000. Priority areas included promoting the independence of disabled.000 people died from the blast and radiation in Hiroshima and Nagasaki.E/CN.18 - .000 per day to job brokers who in turn pay about Yen 8.000 in 1999 to 18.000 to illegal migrant workers. 18. Employers pay about Yen 10. It is interesting to note that leprosy patients were still confined to isolation although a law was enacted in 1960 that leprosy was an illness (resulting from transmission of a rare bacterium) which is not contagious. the authorities have largely ignored the welfare of these unfortunate citizens prior to 2000. Japan has been least affected by HIV/Aids. Divorce rate per 1000 of population reached 2.804 in 2000. In this case basic pension ranges from Yen 65. Tokyo and Osaka had to abandon plans to build shelters for this unfortunate group of people because of opposition from the local population who did not want such shelters to be built in their neighborhood.000 per month depending on the degree of disability and a social allowance of about Yen 27.000. Labor and Social Welfare. reports of child abuses increased dramatically from 10. achieving a better quality of life and livelihood for persons with disabilities. 2005. 21. 24. This meant that leprosy patients could receive drug therapy as outpatients. The largest numbers of hibakusha are found in Hiroshima.25 in the same year. But the total number is doubling every 4 years and this is a matter of concern for the society where prostitution is a major industry. In 2003 the number of divorces reached 284. As of March 2005. Fukuoka Prefecture and Tokyo. 13 April 2001. 20. 266.Rajendran Muthu: Social Development in Japan: A Focus on Social Welfare Issues 16.

it should have its members appointed by the Cabinet after Diet approval through a selection method ensuring independence and variety. Deacon. Coalition Against Trafficking in Women in Asia-Pacific (2000). References CATW-AP. et al. 5/1 men in Asia-Pacific (CATW-AP). recruiters. and promote human rights education.Journal of Societal & Social Policy. Philippines. the Government still provides financial assistance to local volunteer cen- ters affiliated with such welfare councils. In this very respect. Akashi Shoten: Tokyo. paper presented at the conference Global Social Work 2004: . last but not least. (2000). agents. it should have the authority to handle problems associated with the use of public authority and have the power to conduct investigations authorized by law. (2002). was prohibited by this law. N (1999). role of underworld syndicates. paper presented at the International Seminar on Social and Human Development in Asia and the Pacific. N. propose legislation and administrative policies. poverty. (2004). Japan.g. second. R. Statistics on Trafficking and Prostitution in Asia and the Pacific. Mareishia no Shakai to Shakai Fukushi. the JFBA should have members deployed to all prefectures. 29. M. Japan’s Social Security Initiatives: Building a Caring World. Coalition Against Trafficking in Women in Asia-Pacific: Manila. Muthu. Local Welfare Councils are private organizations comprising local citizens involved in a variety of activities including fund raising. The rise of prostitution in the subregion especially in countries like Thailand. and. Mohamad. Japan College of Social Work. Liang. This independent body according to Japan Federation of Bar Associations: first. Japan should heed the call made by the UN as early as 1998 and Japan Federation of Bar Associations (JFBA) to create a Human Rights Commission which should be empowered with its own investigative authority. increasing access through internet services etc. Tokyo.T. propagation of tourist agencies (specializing on sex tours). Japan’s Role in Asian Social Work. Ministry of Foreign Affairs. sexual arrangements could be made at most of the entertainment outlets while the actual acts could be performed at brothels. 30. fourth. should address human rights abuses. low status of women (in deeply Ingrained patriarchal societies). However. which was defined as the sale of sexual intercourse on a repeated basis. marriage matching agencies. Manila. 28. Weidenfeld and Nicolson: London. Sage: London. (1998). (1997). B. Philippines etc were due to a combination of factors e. Social and Human Development in Singapore. Muthu. Although prostitution. R. The Way For-ward. Maruo. third.19 - . pedophile groups. Vol. it should have an independent budget and a secretariat with independently employed staffers. Global Social Policy. 31. International Organizations and the Future of Welfare. providing inhome welfare services etc.

C. N. E. R.A. Montreal. D. United Nations (2006). Australia. Tokyo. Japan College of Social Work. Vol.-T.4/20-06/ 16/Add2. R. Social Work Around the World: Agenda for Global Social Work in the 21st Century. volume iii.E/CN. and Dodds.Journal of Societal & Social Policy. UN. and Quieta. Persons with Disabilities in the Philippines. (2000). (eds. I. (eds. 5/1 Reclaiming Civil Society. volume ii. Social Work in Southeast Asia and Japan: Towards the 21st Century. Japan College of Social Work. October 2-5.20 - . Service for People with Developmental Disabilities in Thailand. Sungkawan. T. International Federation of Social Work Press: Bern. Tan. Tokyo. Inter-national Federation of Social Work Press: Bern.-T. and Rowlands. Muthu. Social Work Around the World: Globalization. paper presented at the Joint Conference of the International Federation of Social Workers and the International Association of Schools of Social Work. A. Adelaide.) (2002). (1999). paper presented at the international seminar on Disability in the Context of Social and Economic Development in Asia and Pacific. and Hisashi. . N. Pangalangan. Social Welfare and Social Work. Tan. UN-Doc.) (2004). Canada. paper presented at the international seminar on Disability in the Context of Social and Economic Development in Asia and Pacific. (1999). Report of the UN Commission on Human Rights.

new terms in the recent history of social sciences is the expression “globalization” (cf Midgley. and sometimes misunderstood or abused. Vol. the situation began to change with the end of the military regime and the restoration of a parliamentary republic in 1987. 2004). and possible consolidation. China Abstract The pathway followed by the Korean welfare state is particularly interesting: some forms of welfare provision originated during the authoritarian period. In this paper. trying to describe and delineate the impact that this process could have had on national states. the first civilian President of the country – marked a significant point in the expansion of the Korean welfare state. Keywords: Korea. 5/1: 21-40 From Developmentalism to Productivism: The Pathway of Korean Welfare State Development Antonio Fiori and Christian Aspalter University of Bologna. 2004). 1980. Lots of scholars have analyzed the process of globalization from a multitude of points of view. and demonstrate how the financial crisis has been indeed an opportunity to improve welfare state’s conditions as direct outcome of democratization and globalization processes. However. Italy/BNU-HKBU United International College. globalization. but a recurrent event in the world economy ever since the late 16th century. democratization. productivism.© Casa Verde Publishing. also being particularly present in the late 19th century—where the extent of globalization was greater than that of the mid-1990s and thereafter (cf Wallerstein. public assistance. the relationship between globalization and . This expansion. pension system. Aspalter. The beginning of the democratization process – and the election of Kim Young Sam. Even though a great deal of ink has been used to give an account of the globalization process. but mostly aiming at obtaining political legitimation and public support. was – strangely enough – nurtured immediately in the wake of the Asian economic crisis. developmentalism. 2006 · ISSN 1681 2816 Journal of Societal & Social Policy. Globalization is not a new thing. health care system. Kim Dae Jung. under the new Presidency of Kim Dae Jung. Introduction One of the most used. the authors give an account of the development of Korean welfare state focusing in particular on the post-crisis period.

the integration of national economies into the global economy—has been strictly associated with greater welfare efforts (Garret. 1998. 2004). in fact. and the increasingly unregulated flows of global capital. 1999. however. A second group of analysts maintains that they show better results (cf Croissant. Rhodes. Kim Dae Jung—pushed even more the country to further downsize barriers and be integrated into world markets.g. it seemed that Korea could enormously gain—in economic terms—from the ongoing globalization process. 2000). This was true until the outburst of the economic and financial crisis that hit Asian countries and Korea in particular. Pierson. While also a considerable number of others—yet again— maintain that globalization is not a key independent variable in the development trajectory of welfare state systems around the globe—but that rather other determinants are at hand to explain key changes and developments of welfare state systems around the globe (cf Aspalter. globalization—that is.b. the collapse of the Chaebol system from 1995 onwards on which Korean economy had relied upon. 2004. The coinciding shift in political orientation—with the election of a liberal-minded President. Rieger and Leibfreid. the interest towards the implications of global economic developments for the welfare state has begun to grow (e. It is asserted that the process of globalization will not lead to a retrenchment of social welfare but rather to its development—that is. Mesa-Lago. On one side we find those who think globalization implies a beneficial effect on welfare states while others judge globalization as a threat for welfare states. At that moment. and the absolute necessity to revive the economy. especially in the later half of the 1990s (Shin. 2003. 2003a. 2004) and the audience of scholars has divided into two extreme fronts. In some scholars’ opinion. Aspalter.Antonio Fiori and Christian Aspalter: The Pathway of Korean Welfare State Development welfare states still remains one of the least explored points. Recently.22 - . 1995. suggested that the government would not have intervened in the social security field. 1999). 1998). 2003. On the other side. Teeple. Starting from the economic and social dramatic situation in the wake of the Korean War—when the country was reduced to a heap of ruins—South Korea has become.” In addition.c. it is asserted or simply assumed that social welfare systems may be under serious challenge. 1997). finance. A number of scholars maintain that welfare states will shrink if confronted with the pressures of globalization (cf Mishra. had let Korea become a victim of “globalization. forced the country to an even more radical liberalization of trade. Taking advantage of the expansion of the world trade regime. All in all. however. 1998. Timonen. achieving the right to enter the exclusive club of the OECD as a member. general positions taken are threefold. however. The difficult situation created by the economic and financial crisis. in 1990s.. greater social spending would be required for effective participation in the global economy (Rodrik. given increasing competitive pressures from global markets. in 1997. one of the most advanced and largest economies in the world. Mishra. in the wake . and investment. the application to the International Monetary Fund (IMF) in order to solve the crisis. On the contrary. 2002). The South Korean experience constitutes a very good testing ground to analyze the effects globalization may have on the welfare state. 1996. Swank.

It was right during this critical period that the Korean government filled up the vacuity left by the “disappearance” of company-welfarism strategy. the Chaebol system was shaking as the system of bribery and trade protectionism was soon being questioned. which—consequently— resulted in a further reduction of the long-standing company-welfare regime. by building a comprehensive universal welfare state. triggering one political crisis after the other. During the authoritarian developmental state period. In this welfare-building process.Journal of Societal & Social Policy. we try to give an account of the expansion of the welfare state in Korea. Vol. the attention of political regimes was focused mainly on economic growth. offered welfare provisions to their workforce. which was being dismantled already before the Asian financial crises. in turn. from 1995 onwards. In doing this we have tried to look at the pathway followed by the Korean welfare state from its first immature manifestations under Park Chung-hee to the painstaking attempt made by Kim Dae Jung to walk the path towards a comprehensive welfare state. What we demonstrate here is that the 1997 economic . One of the main driving processes of this shift was the rapid process of democratization that set in in 1987. i. The beginning of the productivist philosophy of social welfare marked the first attempt to establish a more comprehensive. In the past.b). universal social welfare system. and was inaugurated the so-called productivist approach. On top. Moreover. However. the state had channeled bank loans to the Chaebol and these. focusing in particular on the reforms implemented during Kim Dae Jung regime. In this paper. due to the increased developmental status of the Korean socio-political economy. which set off also a strong economic and social crisis—which eventually caused the Chaebol system to be dysfunctional. Korea.23 - . all things considered.e. in spite of any dream of democracy nurtured by citizens after the end of Korean War. has followed a different pathway from that one could have expected. making the way for a new welfare paradigm to be invented and applied by the central government. It was a political strategy in order to secure industrial peace in strategic growth sectors. Korea was soon pressed by the onslaught of the financial crisis. one of the most difficult moments Korea has had to face in her recent history. 2002a. 5/1 of the financial crisis there has been a fundamental shift in the conception of social welfare. The combined effect of first the globalization process—and the hereby created new need for governmental legitimacy and new political vulnerability—and second the democratization process made possible for the state to embark on the difficult mission to construction of a mature welfare state system in the middle of the financial crisis. the presidential election of Kim Dae Jung was extremely relevant. in the aftermath of the economic crisis was determined in part by the flaking off of the Chaebol-based economic system. and obviously the implementation of social policy programs was not the most important issue on the agenda but in some cases an efficient tool to use for gaining legitimacy (Kwon 1998. It put an end to the developmentalist approach that had characterized a large period of the Korean history.

on 16 May 1961 general Park Chung-hee seized power guiding a military coup d’état. Authoritarian Politics and “Residual” Welfare After the end of the long Japanese rule. The country itself was one of the largest recipients of foreign aid in the world.24 - . were particularly difficult also in consideration of the fact that the corrupted regime of the First Republic did not think about adopting any welfare or labor policy. Historical Background In this section we briefly take into account the development of the Korean social security system from the early 1960s onwards. Park made immediately clear—after having “conquered” the political power—that his main purpose was . Park’s primary wish was driving his country away from the condition of extreme indigence and deprivation that had entangled it until that moment. Park Chung-hee’s Third Republic from 1962 to 1971. when parliamentary democracy was restored. also means looking at the important cleavages in the political and economic history of the country. and this is the direct outcome of the two events: (1) the new loss of political legitimacy under the impact of a dysfunctional Chaebol system and the onset of globalization and (2) the ongoing process of hotly-contested democratization.Antonio Fiori and Christian Aspalter: The Pathway of Korean Welfare State Development crisis—one of the saddest periods in the recent Korean history—was indeed an opportunity for the country to establish greater levels of welfare. immediately after the end of the war. Park Chung-hee’s Yushin regime from 1972 to 1979. to give an account of the main stages of the evolution of social programs from the origins. the Korean peninsula became the object of the hunger—mainly for geopolitical reasons—of the two great powers of that period. The fall of the First Republic did not contribute to radically change the situation. which ended in 1953 after three years of fights leaving in inheritance devastation. hence de-emphasizing former central role the deep-rooted. In order to reach this goal. The Second Republic lasted only nine months. three authoritarian military regimes followed one another in ruling the country. Raised in poverty. in fact. From this moment through to 1987. Living conditions in the country. extreme poverty and above all a formally divided country. It was the combination of these two forces that led Korea to the decision of building up a more universal and inclusive welfare state. The coming on the scenes of Park Chung-hee coincided with the debut of developmentalism in Korea. and Chun Doo-hwan’s Fifth Republic from 1980 to 1987. particularistic company welfare system has played in the past. broken only at the end of the second world war. since the newly established democratic parliamentary government leaded by Chang Myŏn was too frail to modify the status quo. This particularly harsh confrontation brought to the outbreak of the Korean War. During this period. Looking at the evolution of the Korean social welfare. the United States and the Soviet Union. every kind of welfare provision was funded by foreign aid and operated as charity.

some measures were implemented. After this immediate show of strength. in fact. The first period goes from the moment Park seized power until 1963 election. While strengthening in some way the relationship with the Chaebol. however. even though Park considered welfare policies as superfluous for his authoritarian developmental state. 5/1 economic development. 1997). 2004). since the government gained control over capital by nationalizing private banks and taking control of the central bank of the country. In order to support the government strategy of preventing the unions express any possible voice option. besides the defeat of corruption. in Park’s opinion. he made clear that a new era in the relationship between state and business had begun. rapid economic development was pursued by Park and his entourage also as a method of legitimization—a way to find a plausible pretext to the military coup—and a clean cut with the deeply corrupted political and ruling class that had administered the country before him. Chaebol began to act as welfare services providers (cf Woo. at establishing the foundation for a self-reliant economy—could not be done without relying on the private business sector. as the main cause for social instability of the past and an indirect cause of the Korean War (Kim. and on the same day presidents of the major Chaebol were arrested and jailed (Kim. had to be considered. As soon as Park seized power. 2004). built on different basis from previous regimes. Park had to mitigate the tones. to divide the evolution of the welfare state in the country during Park’s era in two temporal periods that follow Park’s political attitude. In addition. 2004. The implementation of the first Five-Year Economic Development Plan—which aimed.25 - . in name of which even democracy was to be considered a “luxury” and could be therefore “suspended” (Woo. We think it is appropriate. the regime. an indispensable ministry in charge of the coordination and control of the country’s economic development. Park’s attitude towards economic development was made operative through the implementation of the first Five-Year Economic Development Plan. This public “moralizing” performance was fundamental for the new regime. Shinkawa. successfully reduced the chances of organization of labor unions. The relationship between state and private business sector was. If under Rhee and Chang regimes the norm was given by a relationship based on corruption and collusion between state and big business—Chaebol—Park’s arrival redefined this “liaison.” Only a few days after the coup. also Pempel. while the second one from the moment immediately after Park’s success in the 1963 election until the announcement—made in 1972—of the absolute necessity of implementing . 1997). choosing the Chaebol as the principal allied. Park announced the formation of a committee for the investigation and execution of the Charges of Illicit Accumulation of Wealth. on the other side. 1989. However. Vol. however. formulated by the newly established Economic Planning Board. which lacked any legitimacy and tried in this way to show to the public its will to reorganize the country in a serious manner. the Bank of Korea.Journal of Societal & Social Policy. forcing the business sector to become dependent on the state’s financial support. This last approach was chosen in order to tame the unions and so removing any possible obstacle on the road to economic development. The democratic regime.

The average annual growth rate of real GNP was 7. 1997). Park began to drastically reduce its efforts for social welfare policy. these programs were—almost explicitly. this decade is characterized by the intensification of the industrialization process. the strict relation between state and big business produced a broad unequal income distribution since the wages of skilled workers rose sharply. Soon after the 1963 electoral competition had ratified his leadership.Antonio Fiori and Christian Aspalter: The Pathway of Korean Welfare State Development a series of “revitalizing” reforms (Yushin) that “sounded a death knell for the third Republic and for whatever progress toward a more liberal polity had been made in South Korea since 1961” (Eckert et al. promulgated in 1972. the Public Livelihood Protection Law (1961). with the development of the heavy and chemical industries (HCI) dominating economic growth.9 percent during the entire decade and the GNP per capita rose from $285 in 1971 to $1. because it needed to develop its defense industry. 1991: 365). the Medical Assistance Law (1963). 1997). those really in need received none or little attention. in order to win their important political support.. which allowed Park to remain in power for life. which was largely consequence of the intimate relationship built between the state and Chaebol. to upgrade competitiveness in the international market. that would have given birth to a civilian government. The perception of a possible regime overthrowing was so minimal—or even absent—that the attitude towards welfare policy as a means of legitimization turned to complete indifference. The 1970s marked the beginning of a new political and economic course. Since the new constitution established the presidential system. The growth was impressive. as in the case of the Civil Servants Pension Law—addressed to provide potential veto players with various benefits. and then. The new Constitution. There were several reasons why the state aimed at promoting HCI. As a matter of fact. Nonetheless. This implied that while Park regime safeguarded its interests by protecting soldiers and government employees. the power of the executive—and the President in particular—was in practice unlimited. constituted the foundation of the Yushin (restoration) system. some important welfare laws were legislated in this period: the Civil Servants Pension Law (1961). Park and his entourage became convinced of the fact that social welfare could be a good tool to achieve public legitimacy. As soon as Park announced new elections to be hold in 1963. From the economic point of view.589 in 1980 (Kim. the Korean Social Security Law (1963). Needless to say. to create a deep interrelation with a few Chaebol—the solely actors that could efficaciously support the state in its investment in HCI (Haggard and Moon. 1994. In this period the Chaebol established firmly on the Korean economic scene. First of all. the regime—and Park in particular in his public speeches— started to make promises about the necessity of establishing and implementing social welfare programs. while . since the state favored big business groups formation instead of assigning the HCI projects to state enterprises or small and medium enterprises.26 - . the Health Insurance Law (1963). It was the beginning of the second period. the Military Pension Law1 (1963). This decade witnessed a large economic growth. In the first period of their rule. secondly. Industrial Accident Insurance Law (1963). Kim.

for the first time. company welfarism was a tool to pre-empt the formation of labor organizations. 1989)—were based mainly on loans subsidized by the state through state-owned and managed banks. Big business. relying on the fact that the concept of the company as an extension of the family was still largely rooted in the country. company welfarism had above all a political implication. the Medical Insurance Law—enacted for the first time in 1963—was revised and then put into effect the following year. 1999). The scheme gradually expanded its coverage. became compulsory only for some sectors. The regime rejected these critics by explaining that social programs as health or unemployment insurance could not have the precedence since. The firm establishment of Chaebol in the Korean economy in this period was accompanied by the intensification in the enterprise-based welfare programs. It must be also underlined that in the Yushin period the repression of labor became even harsher. 5/1 wages in the labor-intensive light-manufacturing sector had been kept at the subsistence level by the government policy of maintaining international competitiveness (Lee. In 1976. 1998). In President Park’s opinion. until it reached the “universal” status in 1988. must be considered as an expedient for the accomplishment of the goal of heavy and chemical industrialization. even though most academic circles and social experts maintained that the implementation of other social programs had the priority. The implementation of the pension law. although it was not compulsory for them. whose success—as well as economic growth in general—was linked. mess halls and dispensaries. 2004). The economic problems that had progressively made their appearance since the early 1970s were exacerbated in 1979 by the second oil shock and. to a large capital investment. This choice is understandable in relation to the heavy and chemical industrialization of the country. being not long-term insurance programs. provided welfare programs to workers in order to support the evident will of the state of obstructing the rise of militant labor unions. The Medical Insurance Law. 1973. but the implementation of this new law was postponed due to the first oil crisis. being more important for the country. This is further demonstrated by the fact that—as we have already noticed—after the promulgation of the new Constitution the regime did not show any interest in other social programs. starting with large-scale companies with more than 500 employees (Kwon. Companies with fewer than 500 employees could join the program. then. however. three years after the enactment of the National Welfare Pension Law. however. covering all those previously left outside. . they were unable to accumulate funds to be utilized for economic development. Company welfare programs—including a variety of items like the building of dormitories. Vol.27 - . on the national pension program (Woo. in fact. the operation of company savings and loan associations. scholarship programs (Choi. Obviously. An exception to the lack of interest showed towards social policy programs in the second part of Park’s era was given by the push toward the implementation of the national pension system.Journal of Societal & Social Policy. The National Welfare Pension Law was passed by the National Assembly on December 1.

also expressed their anger in the form of increasingly militant labor disputes and strikes (Eckert et al.28 - . President Park. Only in 1985. The implementation of the national pension system. A decisive step toward democracy was done in the spring of 1987. The Plan indicated the most important welfare policies to be addressed. During the most part of the Fifth Republic. declared the martial law. constituting a serious menace for the regime which. Chun Doo-hwan. since all the candidates put the issue of welfare on their agenda in their electoral campaign. when the decision to suspend the debate on revision of the 1980 Constitution stimulated massive protests against the authoritarian regime. composed mainly by students and workers striving to achieve substantial democracy in terms of socioeconomic reform. and the legislation of a minimum wage law (Woo. however. had shaped the modern political economy of the country and was deeply respected and feared. seized the power—showing an unprecedented use of violence—giving birth to a new authoritarian regime. in fact. in response.Antonio Fiori and Christian Aspalter: The Pathway of Korean Welfare State Development people—especially middle class—began to doubt about the efficacy of the economic choices made by the regime. This was the beginning of the decline of the authoritarian regime. South Korean workers. The massacre that took place in Kwangju in 1980 remains a bloodstain that will be never washed away. however. Starting from late 1983. the authoritarian regime began to open up allowing the political liberalization and self-regulation of universities (Ahn and Lee. 2004). The death of Park Chung-hee however marked the possible beginning of a new era and the immediate dismantle of the Yushin system. however. since civilian politicians were not able to put together a new government and the military seized power again. was to fade soon. it is not sure that—even if the regime would have lasted longer—these welfare measures would have been really implemented. leading to the socalled “June 29 Democratic Declaration” in which Rho Tae-woo. 2001a. 2005). The following electoral campaign. in fact. after his .. More importantly. the presidential candidate of the DJP. However. From a political perspective Chun’s regime was not much different from the previous one. marked a watershed in the development of welfare reforms. the main victims of the economic downturn. The mass demand for democracy was in fact annihilated when in 1980.b). promised direct presidential elections to take place (cf Aspalter. a government plan to improve social welfare during the next Sixth Economic Plan (1987-1991) was made public. after the electoral debacle. another General. however. Very rapidly demonstrations spread to Masan and other cities. The democratic dream nurtured by the Korean citizens after the end of Park’s regime was soon broken up by Chun. President Chun tried to repress progressive movements. 1991). The period immediately following the end of Park’s regime was full of optimism for Korean people. The extension to the uncovered population of the national health program. As far as he could. and the 1985 general election contributed to modify the situation in an unexpected way. In October Park Chunghee was assassinated and the episode astonished the entire country. The ruling party—the Democratic Justice Party (DJP)—was defeated. This optimism. welfare programs remained absolutely underdeveloped.

2005. Kim and Ahn. Workers began to take political actions to a greater extent. For this reason.29 - . although Rho himself was a former military general. As we have noticed. 2003. 5/1 electoral success. Aspalter. From this moment welfare reforms . At the end of 1980s. but not least. as regards their demands for wage increase and the extension of public social welfare services and benefits (cf Kim and Kim. 1988 Olympic Games—entrusted to Korea—had become an extraordinarily important event for Chun’s regime.Journal of Societal & Social Policy. and the New Era of Welfarism The Korean pathway. First of all. and this was a further matter of concern for the government. suffocating any political freedom in virtue of a sustained economic growth. big business conglomeration—and began to embrace deregulation and liberalization. the students’ protests and manifestations had grown dramatically. during the 1987 campaign all the candidates put the issue on their agenda-setting. Rho Tae-woo began to be pressed by the opposition parties that had finally gained access to national politics. Globalization. On one side the economic growth of the country has been extraordinary. Lastly. the 1987 presidential election can be considered as a watershed in the history of the country. The collapse of the Fifth Republic meant the beginning of a new era for the country. however. mainly thanks to the irreparable mistake made by the opposition front which ran divided. becoming more and more severe. while now also being strongly obliged to keep the promises made under the Chun Doo-hwan regime. 2001a). often students’ riots were supported by ordinary people. until here analyzed. subjugating the ideals and hopes of the most part of the population. On 16 December 1987 Rho Tae-woo was elected President. for several reasons. both on the political and the economic side. Democracy. being more closely listened to by those in power) and their clout being felt more intensively on the political scene. not to mention the social one. Secondly. the United States “imposed” the Korean regime to find a different way from the military one to give a solution to popular dissent. while their voice was now being heard (i. but. even the economic system of the country began to change abandoning the old vices—protectionism. If until that moment welfare had been used mainly as an instrument to gain legitimacy. breaking in two the electorate. on the other side. Korea had embodied until that moment all the characteristics of a perfect authoritarian developmental state. Moreover. If the political shift may be considered as the first step on the way to democracy. labor repression.. it has left no space for democratic development. Too many efforts and too much work had been already done just to jeopardize the organization of the Games because of a bad international recognition. both nationally and internationally. times seemed mature for an important change. A radical transformation concerning welfare reforms took place during the electoral campaign preceding Rho’s election. Vol. Rho’s election to Presidency was the first in thirty years that did not suffer from a deficiency in legitimacy.e. has followed a double direction.

Kim Young-sam.8 percent. With the introduction of democracy. 1999). These three programs brought a major extension of the Korean welfare state. and began to be regarded as a prerequisite on the ground of which political parties could have obtained the popular consensus.e. the first part of Kim Young Sam’s mandate was spent in trying to revitalize economic development more than anything else. the extension of the National Health Insurance scheme of 1988 and the National Employment Insurance scheme of 1995—which was first being devised in 1991— serve as prime examples for the impact of elections—and more precisely. the leader of the newly established Democratic Liberal Party (DLP). several welfare programs were amended. This new paradigm aimed at blending the economic growth of the country with the virtues of social welfare for a long-term balanced development. In addition. As regards the major social insurance schemes. Many other pieces of social legislation were introduced and revised as well. which has come to be increasingly inclusive. 1997). falling in the first half of 1993 to 3. In 1992. During the Sixth Republic.30 - . the driving force of party competition between ruling and opposition parties came to light. The reasons . i. at the beginning of the 1990s the growth rate of the country began to slow down. Election promises rather than voluntary introductions of new social policies determined the course of welfare state. incorporating the middle classes in welfare state provisions. the concession of welfare rights to citizens was used to mitigate the suspicion of the public opinion for his former military career (Lee. The transitional period after the summer of 1987 has been considered as characterized by a sort of “welfare explosion” (Ahn and Lee. the Workmen’s Compensation Act (revised 1989) and the Law for the Promotion of the Employment of the Handicapped (1990) (Lee. the Maternity Welfare Act (1989). such as the Equal Employment Act (1987). as planned by the previous regime. either in government or opposition. won the Presidential election. the Medical Insurance System— between 1988 and 1989—expanded its coverage to rural and urban self-employed. The National Pension Insurance scheme of 1988. the plan for Employment Insurance was set up in this period. all grounded in election promises of the major politicians of political parties. The turning point in Kim Young Sam’s presidency was given by his declaration—made in March 1995—that Segyehwa (globalization) policy would have lead the country through the challenges of globalization. electoral competition. In February 1996. 1997). After decades of economic prosperity. the National Welfare Planning Board—formed by the Segyehwa Committee the previous year—announced the Vision of the 21st Century National Welfare Reform.Antonio Fiori and Christian Aspalter: The Pathway of Korean Welfare State Development were not considered an instrument of political legitimization any more. in order to enhance the quality of life of Korean citizens by establishing a Korean welfare model and providing advanced welfare services (Lee. 2005). the Maternity Health Care (revised 1987). becoming the first civilian president after decades of deep military involvement in political struggle. which was the lowest level since 1981. For this reason. but put into effect only in 1995. In Rho’s case. in particular. while the National Pension Insurance Scheme was put into effect in 1988.

which had lent heavily to Korean firms. And in the end. followed in turn by Jinro in April and Daenong in May. 1999). in fact. even Kia Group—the eighth largest Chaebol in Korea and internationally one of the most renowned Korean automobile producers—became a candidate for bank bailout after it failed to make some payments on its 10-trillion-won debt. It was believed.Journal of Societal & Social Policy. in July. and thus failed to concentrate into industries where they could enjoy a comparative advantage (Yoo and Moon. when they did lend. but rather from the absence of intervention—and eventually protection—demonstrated by the Korean government in this circumstance. First of all. the firm will of the civilian government to join the exclusive OECD club could be frustrated by the conditions of underdevelopment of the welfare system (Ahn and Lee. under the Kim Young Sam Administration the most relevant effort in the field of social security was given by the Employment Insurance Act. Korean firms had always been heavily leveraged. the strategy chosen by the major companies during the 1997 was completely wrong. Hanbo Steel Corp. Hanbo was not well renowned among international investors and so its collapse did not result in a full-scale crisis. Two months after Hanbo—in March—it was the turn of Sammi Steel Corporation to default. The Financial Crisis and Kim Dae Jung’s Election When. leading Korean steelmaker. 1999). promulgated in 1993 and put into effect two years later. despite a massive rescue attempt.31 - . However. 1998). The failure of the company resulted in the bribery scandal related to the son of President Kim Young-sam to aggravate the already weak credibility of the financial sector (Yoo and Moon. secondly. Unfortunately. the incoming general election that made absolutely necessary to provide more generous welfare benefits in order to gain popular support. The echo . since they tried to expand their areas of business. 2005). Vol. they asked for higher interests rate (Mo and Moon. This apprehension did not originate directly from the troubles Hanbo was experiencing. but it was not the case. they became reluctant to lend or rollover existing debts. the country was suddenly waken up from the economic success golden dream nurtured until that very moment. 5/1 for this new attitude towards the implementation of significant welfare reforms are multiple. The Hanbo bankruptcy and the political turmoil that resulted from it deeply alarmed the international financial community. on 23 January 1997. the public opinion was basically optimist. The Hanbo default could have been only an isolated episode. When the international financial community realized that Korean firms and banks were no longer safe. so that the Korean economy would have resulted undamaged. In sum.—the fourteenth largest Chaebol in terms of assets and seventeenth largest in terms of sales—went into bankruptcy. since this affair had repercussions on the international financial community. but the “hidden agreement” that had allowed them to borrow from foreign banks was that the Korean government would have run to support them in case of trouble. that some other Chaebol could have acquired Hanbo.

Obviously. But in reality. 1998).7 percent. while the inflation reached unexpected levels. as well as in the long run economic—advantages of expanding the social security system. It was impossible to forget that in his fight for democracy Kim had to endure imprisonment.8 million units. If Korea could be considered a follower of the “from-cradle-to-grave” philosophy—with a situation of near full employment—the situation was completely reversed after the country was hardly hit by the crisis. . Kim Dae Jung became the new President. the Korean government finally made a formal request for IMF standby loans. the effects of such a deep crisis had a devastating impact on the population. Unfortunately. It is useless to say that dealing with such an unemployment rate was a problem Korea had never faced before. In this regard. unemployment rates increased considerably in the wake of the crisis. At the beginning of 1999 the number of unemployed had reached 1. As part of its agreement with the IMF. a couple of weeks after Korea had signed an agreement with IMF. Korea seemed not a safe place any more. there was no way out. Given all this. the supply of dollars was extremely limited and although Korean government tried until the very last moment to avoid an International Monetary Fund (IMF) bailout by appealing to the international financial community with promises of financial reforms. 1997. the Korean government began to follow the road of deregulation and liberalization in the economic field. the Korean won went into a freefall. Korean banks and companies had to pay back their debts in dollars. On the face of it.” high unemployment rates could have determined social and political instability.32 - . rather that an extension and built-up of welfare state benefits and services. In this regard. foreign banks began to call in loans and stop rolling them over (Mo and Moon. as foreign banks and investors pulled out of the country concerned with the viability of Korean financial institutions and the ability of the country to meet its short-term debt repayments. On November 21. house arrests and assassination attempts. Especially because Korea was a “young democracy. 2000). at least from the economic point of view.Antonio Fiori and Christian Aspalter: The Pathway of Korean Welfare State Development for Kia’s bankruptcy—differently from Hanbo—had an international relevance. Kim Dae Jung’s election took the form of a personal victory for this man. The election of Kim Dae Jung was absolutely meaningful in consideration of the personal history of this man. Nominal wages decreased for the first time in more than thirty years. and the unemployment rates soared to 8. This also meant that laying-off of workers had to be facilitated in order to increase labor market flexibility. On December 18. this development is the result of a political rationale and choice that clearly saw the—political and social. Obviously. If one of the most important groups in the country could undergo such difficult situations. one might expect the Korean welfare state development to have been one of retrenchment. this seemed to have been a “paradox” of the Republic of Korea (Shin. and the demand for dollars also came from foreign investors who dumped their Korean assets. As a result.

which he argued was creating serious political and social distortions under the pretext of generating rapid economic growth. 5/1 Being a well-known politician. Vol. in particular those of the Chaebol. organized labor and big business2—in January 1998. however. in February.” In addition.Journal of Societal & Social Policy. as a presidential advisory body. he indicated he would try to legitimize structural reform through a democratic process. such as tripartite consultation bringing in labor. when he declared that his administration would be based on “the parallel development of democracy and a market economy. Kim Dae Jung was absolutely convinced of the fact that Asian countries had any other possible choice but democracy in order to foster innovation and make a transition to economic growth based on productivity improvement (Kim. Since his first participation in presidential electoral competition. 2000). in 1971.” By following that path Korea could—in the opinion of Kim Dae Jung—restore market mechanism and dismantle collusive ties between the government and the Chaebol. It was absolutely evident that Kim Dae Jung could not in any case use the economic crisis as a pretext to resort to authoritarian politics. Instead. Kim Dae Jung made clear that there was an alternative to Korea’s developmental dictatorship. The most common critic. In a period in which the country was already suffering from a devastating economic crisis. expectations proved to be wrong. the Commission adopted. These ideas formed the framework of Kim’s “philosophy” and were fiercely supported even immediately after his presidential election. Kim Dae Jung attracted both support and critics even in the eve of the election. For this reason. on the other side. in which there were several clauses explicitly targeted at reforming corporate governance and structure.” the man who had to struggle for his entire life—sacrificing himself—in order to make democracy triumph. found its basis in the lacking of expertise of Kim Dae Jung and his entourage. the Social Package for Overcoming Economic Crisis through which 90 items were agreed. so that all groups could become beneficiaries of what a free market economy could offer them. Kim Dae Jung established the Tripartite Commission— with representatives from the state. he severely condemned the lack of democracy in the past history of his country. management.33 - . electing a President with none—or rudimentary—knowledge of economics or finance could be a hazard. and government representatives to overcome economic crisis. Kim roused his critics’ suspicion because of the age of the candidate and his presumed inclination to communism. Without any hesitation. 1994). the Chaebol were forced by the new President—through an agreement signed in January 1998 with the country’s top five business leaders—to reform their business practices (Shin. Although a part of the public opinion had reason to be concerned. in his supporters’ opinion Kim represented the “Korean Nelson Mandela. The alternative for the country was—in his own words—“a mass-participatory economy. The accomplishment of this last important task was made possible also thanks to the IMF accords. . claiming that it was at the origin of the economic crisis at the end of the 1990s. After a few weeks of severe debate and work. On one side.

Antonio Fiori and Christian Aspalter: The Pathway of Korean Welfare State Development Through this so-called “social pact”—which examined policy issues in the areas of social protection. On the other hand. they also understood to curb welfare expenditure wherever possible. . New. The Rise of the Korean Welfare State Under Kim Dae Jung Myth and Reality of the New Era of Productive Welfarism Even though the consecutive democratic governments of Kim Young-Sam and Kim Dae Jung did spur welfare state development. so-called “productive” welfare programs. It was in this period of harsh welfare demand that company-welfarism began to be reduced. Obviously. labor policy among others—Kim Dae Jung had the possibility to put into practice all IMF’s recommendations and neoliberal reforms. The lower classes began to entrust organized labor and hardly criticized Kim Dae Jung’s neoliberal policy package supported by international financial capital. on the one hand. have been applied more than ever before. The most important issues on the agenda were further liberalization and deregulation of financial sectors. be they particularistic or universalistic in their institutional setup. neoliberal conservatives supported Kim Dae Jung’s policy choice judging it as the only possible way of escape from the crisis. macroeconomic policy. the Korea Confederation of Trade Unions (KCTU) rejected its representatives’ request to accept the pact. All the benefits—never legally stipulated—that Chaebol offered to their workforce were drastically cut or even completely abolished. Kim Dae Jung’s position was particularly difficult. on the other hand. the situation forced big business to completely modify the attitude toward the supply of welfare provision. forcing the business community to accept more stringent conditions for layoffs. to support productive welfarism and the participation of people in the workforce and. unemployment. 2001b). From this very moment. At the announcement of “social pact” in February 1998 by the Tripartite Commission. Although Kim Dae Jung promised substantive reforms in all areas.34 - . to address the urgent and increasing problem of social exclusion—the concepts of “productive welfare” of the Kim Dae Jung Administration and “participatory welfare” of the current Roh Moo-Hyun Administration have become cornerstones of the new conservative welfare ideology in South Korea (cf Aspalter. and labor market reform (Kim and Moon. the severe financial crisis induced him to give the priority to labor relations reform and. since social crisis caused harsh social conflict. industrial relations. mainly because of the financial difficulty of the Chaebol. corporate restructuring. above all. The new strategy in social welfare policy is. The problem was that conservatives’ support in this case would not have automatically turned into general political support for his party. 2000). the KCTU boycotted the Tripartite Commission. corporate restructuring. that grew severely in consideration of lay offs and Chaebol restructuring policy.

Productive welfarism has strong neoliberal straits. 2004). the only difference is the degree of welfarism. Vol. highlighting the need for free health care and education programs for the underprivileged. selective—but yet increasingly incorporative—welfare policies. The system of calculation of the official poverty line began to be kept into the utmost consideration so as the creation of a staff composed by qualified social workers for means-test and provision of benefits. as well as welfare programs for the unemployed and the urban poor. Only less than 1 percent of the total population had received livelihood benefit supplementing the basic livelihood until the eve of financial crisis (Lee. programs that raise the standard of living of the elderly. the new social assistance scheme moved its axis toward a “workfare” ideal by establishing the so-called “conditional recipients rule. participatory welfare. The NBLS Act passed in October 2000 constituted a watershed in the way of understanding the social assistance in Korea. 2001. The Public Assistance Reform The National Basic Livelihood Security (NBLS) Act is often referred to as the most representative of all social welfare reforms implemented by the government leaded by Kim Dae Jung (Kim. and the absolute lacking of any workforce explicitly devoted to the social assistance scheme. the limitations imposed by the Livelihood Protection Act were substantially eliminated since anyone with an income and property below a certain level could be eligible for social assistance. all these limitations. The pre-crisis social assistance scheme. and so is. Both “productive welfare” and “participatory welfare” subscribe to conservative notions of welfare. posed some important eligibility criteria such as the basic conditions of being poor. 5/1 The term “productive welfare” has been introduced by the Kim Dae Jung Administration.” which forced all able-bodied citizens in conditions of poverty to participate the Self-Reliance Support Programs. The introduction of NBLS marks a deep turning point in the evolution of Korean public assistance that had been. Operatively. and the poor. and the exclusion of able-bodied people.Journal of Societal & Social Policy. the exclusion of citizens between the ages of 18 and 65. The term “participatory welfare” is part of the larger concept of “participatory democracy” introduced by the new Roh Moo-Hyun Government— in social policy “participatory welfare” refers to programs addressing youth unemployment. First of all. In addition. low-income families. in fact.35 - . the implementation of the Act was supported by the ad-hoc creation of a dedicated structure. These Programs were intended to create the conditions for all . and the different etiquette. Lee. made the scheme of difficult fruition for the most part of citizens. Participatory welfare paradigm is principally a continuation of the productive welfare strategy of Kim Dae Jung. programs providing day-care centers for children of working mothers. 2004). based upon the Livelihood Protection Act of 1963. Obviously. until that moment. as their put forward particularistic. but to a lesser degree.

in 1992. bringing virtually all Koreans within the system (Yang. 2002a. For this reason. on an occupational basis or residence area. The attempt—made in 1988 by the opposition parties—to unify all health funds into a global national fund was destined to failure because of the veto expressed by the President. the National Pension System has gradually expanded until achieving almost universal coverage.” since in origin it was launched by Park Chung Hee basically to protect those groups considered vital to the legitimization and stability of the authoritarian regime. Korea has introduced a compulsory health insurance scheme in 1977. which in turn made their financial situations precarious (Kwon. probably. to cover all workplaces with five to nine workers. the situation was completely reversed after the election of Kim Dae Jung. but it was extended.Antonio Fiori and Christian Aspalter: The Pathway of Korean Welfare State Development beneficiaries to get out of poverty by offering them the proper job training and help them finding a job through which they can rely on themselves. However. Three years after the coverage was extended to include farmers and fishermen. The proposal of merging all health funds into a National Health Insurance had always been part of the political program of Kim Dae Jung when he was at the opposition.b). The system basically tended to divide. As we have seen. the criteria to set the amount of indi. and the self-employed (50.4 percent). civil servants and school teachers (10. 2004). Korean working population—industrial workers (36 percent of the population). Progressively the scheme was opened to the subscription of different occupational figures. However. on the contrary. in 1989. National Health Insurance Reform Although NBLS constituted the most representative of all social welfare reforms introduced by the Kim Dae Jung government.36 - . With the arrival of Kim Dae Jung. in 2000 the merging of all health funds was finally implemented. Originally it covered only workplaces with more than ten employees. health insurance system underwent the most significant modifications. In April 1999 the urban self-employed—the last group still excluded from the pension program mainly because of the difficulties in ascertaining incomes—began to be covered. With more than 400 funds. the organizational and the financial situation continued to be entangled. Public employees and teachers funds worked well since levies were deducted directly form their salaries. at its highest point. National Pension Reform Since its establishment in 1988. the will to “protect” the interests of the industrial workers and public employees triumphed. until it was extended. to cover independent small business owners in urban areas. At that time. workers in small firms less than five employees and the self-employed in rural areas (Walker. the system still retained a deep inegalitarian “trademark. 1996). in fact.1 percent)—providing each of these groups with a different health insurance program. self-employed workers and older persons had difficulties in collecting levies.

The most difficult problem Kim Dae Jung had to face was the disproportionately financial generosity of the pension program. In addition. 5/1 vidual contribution to join the pension program—for the urban self-employed— became the housing and/or automobile ownership. Gough. Kim and Ahn. The level of income replacement was reduced from 70 to 60 percent. . contribution rates of both employers and employees have each risen to 4. In South Korea. 2000). as well as neighboring Japan. Such conditions simply could not be financially sustainable – first of all because of the increasingly ageing Korean society. in combination with the successful dealignment of politics and big business interests lead to new pro-welfare politics. This end of the close alliance of politics and big business interests was started by the preceding Kim Dae Jung Government (cf Moon and Yang. introduced in the 2004 general election.37 - . when seen from a historical perspective (cf e. South Korea will continue to witness a “boom” with regard to welfare state development. though not as fast as one may expect or wish. and Mainland China.5 percent of the monthly wage. the United Democratic Labor Party. 2002. The new heights of party competition. and the introduction of new labor and social legislation in the years to come.g. social insurance schemes with subsidies of the state will continue to be in the center of the welfare state. Moon and Yang. the Korean welfare state will see the extension of social insurance and social welfare programs in the fields of pensions. Taiwan. the program was based on an evident contradiction given by a low contribution rate (6 percent of wage) and a high pension (70 percent income replacement. and then because of the mismanagement of the reserve fund (Shin. the advent of Kim Dae Jung marked a sort of restructure of the pension program. in fact. in order to cope with soaring unemployment. the framework was completed by the fact that the pension age of 60 (for males) was particularly convenient. which could rapidly drain the reserve fund accumulated. but Kim Dae Jung did not surrender and by the incorporation of this last group into the national pension he made of it a universal program covering the entire population. 2002). Mainly for these reasons. 2003) and carried further by under Roh Moo-Hyun. political determinants in South Korea point at a further extension of welfare programs. due to the strong authoritarian elements still resilient in South Korean society. Vol. the requirements for pension entitlement have been made more accessible. However. 2000). health care. The minimum contributing period for old-age pension was cut from 15 to ten years (Shin. Until that moment. the pension age will be gradually increased from 2013 (one year every five years). 2002. Civil society in South Korea is catching up with democratic developments. and social welfare provision to the elderly. Using the ownership of such goods as a means to calculate the amount of contribution provoked discontent within the urban self-employed. The Future of the Korean Welfare State In the light of a fast aging population.Journal of Societal & Social Policy. due to the rise of a clear left-wing political party.

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China from lower middle income group. Since today we are living in an era in which “development” has become a buzz word. Japan. The term policy refers to a stated course which is to be adopted for performing varied kinds of actions required for achievement of goals. every country is obliged to formulate policies relating to development—political economic. lower middle income countries. we find that in terms of income all the four categories of countries are in existence in this region also. China. and uses it to administer and manage its affairs in such a manner that at least a minimum desirable standard of living is ensured to each and every section of its population. India. With increasing globalization and easy access to information relating to any important happening in any part of the globe mainly because of rapid advancements in the field of information technology. all countries are making efforts to benefit from the healthy and positive lessons of policies followed in various countries. which may be political. social and cultural. Keywords: Social development in Asia.© Casa Verde Publishing. social policies. we find that there are four distinct categories of countries: low income countries. Introduction If Asian continent. Malaysia. In Asian continent in which the two most populous countries viz. Vol. Malaysia and Japan Surendra Singh Lucknow University. social development policy. it will be essential to analyze the policies of countries located in Asian region and to draw the required lessons from them. in which “money” as medium of exchange has . and it is precisely for this reason that one country from each of the four categories. In the present market economy. China and India both are located. Malaysia from upper middle income group and Japan from high income group of Asian continent has been selected for purposes of this paper. 2006 · ISSN 1681 2816 Journal of Societal & Social Policy. If we look at the general economic scenario. economic social and cultural. level of economic development. upper middle income countries and high income countries. is to be developed to bring it at par with other parts of the world which are fairly developed. India from low income group.. globalization. India Abstract Every country evolves its policy keeping in view its political priorities. which is still quite backward. 5/1: 41-52 Social Development Policy in Asia: With Special Reference to India. China. cultural values and practices and social conditions.

It has. A few reforms like ban on “sati. change in institutions and change in practices. This planned and directed change is three dimensional change in values. Since we are living today in a unipolar globalized world. poor. particularly from the standpoint of people’s development and well-being. social policies of any country today must respect and reflect the wishes (at least those which are instrumental in promoting the well-being of common people.” “dowry. therefore. However.” “untouchability. it managed to become an independent state in 1947. and increase the economic status and standard of living of people (cf WB. though being largest democracy in the world today. located in four categories of nations on the basis of their level of economic development. 2005). Social Development Policy in India India. infirm. no country can afford to ignore the directives of the United Nations Organizations and its various organs as the world body of various nation-states in the globe. Social policy basically aiming at promotion of economic growth with “equity. dignified and peaceful life. It is against this backdrop that social development policies of four countries. and prevailing social conditions and cultural context. India has been under foreign rule for centuries.” “child marriage. As a consequence. “untouchability. The term social development refers to planned and directed change on democratic lines to create conditions conducive to optimum human development. are being examined with the ultimate objective of drawing lessons for accelerating economic growth with social justice. level of its economic development.” were undoubtedly initiated during the foreign rule through enact. economic development promoted without bothering about its social consequences. disabled.” varies from one country to another depending upon the type of political system adopted in a country.” “female foeticide. leaving vast majority of people as unemployed and poor.” “child marriage. has traditionally been the victim of inequality created by caste system as also by patriarchy as a result of which many evils like “sati” (wife burning herself with the dead body of husband). especially among the disadvantaged like. must have social policy also so that the fruits of economic development may be equitably distributed among masses.Surendra Singh: Social Development Policy in Asia become most important (mainly because it is capable of purchasing not only human body and its vital organs but basic virtues of integrity and honesty also).” have been fairly widespread. Generally. this has not been necessarily always true. effecttive performance of roles related to various social positions and decent. been widely accepted that every country alongside of its economic policy. has resulted in vast economic inequalities distinctly visible in the form of concentration of economic resources in a few hands. etc.42 - . economic policies leading to promotion of economic development are being given top priority on the assumption that the rise in GDP will automatically provide opportunities for economically gainful employment. especially from the weaker and vulnerable sections of society) of the United Nations and its various bodies.

Directive Principles of State Policy and Fundamental Duties. Vol. the policies have been frequently subjected to change and they could not be properly implemented (Aspalter. water supply. As for social policy aimed at promoting social development in the real sense of the term. and they are still in existence in Indian society). (3) Era of Social Development (1969-1991). In the pre-independence era of social reform the then British government. free and harmonious society.Journal of Societal & Social Policy. liberal loans. (2) Post-Independence Era of Economic Development and Social Welfare (1947-1969). Constitutionally. In the post-independence era of economic development and social welfare. In the year 1969. it is a democratic. the political party/coalition of political parties in power in the centre and states have not only been different but quite often at logger-heads.” “child marriage.43 - . Again. electricity. Fifth Five Year Plan (1974-1979) was started with the objective of removal of poverty and achievement of self-reliance. and (4) Era of Empowerment (1991 onwards). quasi—federal republic aimed at creating a just. India has been a country of poor villages mainly dependent on agriculture— about 72 percent of its population still lives in villages. The Twenty Point Program was launched in 1975 to remove poverty and promote multi-dimensional development of people from weaker and vulnerable sections. and institutional care and provide for necessary infrastructure in the form of roads. yet the real work in the direction of formulation of social policy started with the enforcement of Constitution of India—its chapters on Fundamental Rights. at the initiative of some enlightened social reformers enacted certain laws to eradicate social evils of “sati. particularly by creating additional employment opportunities. right from the very beginning its top priority has been to boost up production—agricultural as well as industrial—in order that it may be possible to provide food and cater to other basic needs of its people. in which the Fourth Five Year Plan started.” “untouchability.” and provided certain special concessions to untouchables. therefore. etc. If we look at social development policy in India. efforts were made to fulfill the basic needs of people through provision of subsidies. we find that it can be divided into four periods: (1) Pre-Independence Era of Social Reform (up to 1947). women. socialist. and more particularly in 1972 when the slogan of “remove poverty” was given. initial policies pursued through the Five Year Plans were oriented towards promotion of economic growth. Consequently. equalitarian. Because it has been a poor country unable to satisfy even basic minimum needs of people. are the fountainhead of social development policy in the country. the largest). it started with 1969 when bank nationalization was done to facilitate credit for poor. to ensure a minimum desirable standard of living. A comprehensive sub-plan approach to tribal . secular. The general approach was substituted by target-group and area approach. 5/1 -ment of specific laws (which could not totally eradicate them. 2003). emphasis was given on even distribution of benefits of economic development to reduce disparities in income and standard of living. because after 1969 when the first coalition government was formed in the state of Uttar Pradesh (populationwise.

rural roads. However. etc. self-help groups and empowerment of weaker sections like Scheduled Castes. environmental improvement of urban slums and nutrition was started in the Sixth Five Year Plan which inter alia aimed “at a progressive reduction in the incidence of poverty and unemployment …improving the quality of people in general with special reference to the economically and socially handicapped population … strengthening the redistributive bias of public policies and services in favor of the poor … a progressive reduction in regional inequalities … promoting the active involvement of all sections of the people in the process of development” (GI. 3. and loans have been provided on liberal terms and conditions. Non-governmental organizations are being encouraged and supported by the government to undertake the responsibility of initiating programs that may develop poor/disadvantaged peoples’ competencies and provide opportunities to work together forgetting all kinds of differences of caste. privatization and globalization was adopted in 1991. rural water supply. All political parties are vying with one another in championing the cause of social justice for weaker sections. assisted human development through a network of educational and health services.Surendra Singh: Social Development Policy in Asia development was started. particularly poor and unemployed. and promoted development of institutions of people’s participation such as Panchayati Raj Institutions. Minimum Needs Program having the components of elementary education. A wide variety of training programs have been started for different categories of people.44 - . creed. It has encouraged private initiatives. Voluntary sector also grew rapidly with concentration on development of poor and the down-trodden. National Rural Employment Program. Salient features of social development policy in India are: 1. 1980: 34). The New Economic Policy of liberalization. People’s own grass-root organizations—Panchayati Raj Institutions in rural areas and urban local bodies in cities—are being involved in the process of decision making regarding nature of developmental projects to be undertaken at the community level. housing for landless labor households. 1985). women. were started. Scheduled Tribes. Removal of poverty and attainment of self-reliance were the basic objectives of the Seventh Five Year Plan (1985-1990) (GI. particularly through reservation in education and employment without bothering about its implications for already frag. 2. to enable them to benefit from various rural and urban self-employment and employment generation programs. cooperatives. rural health. 4. old age. it is continuing to provide social protection to those who are disadvantaged by virtue of some disability. A number of employment generation programs such as Food for Work Program. The government is basically concerned about promotion of employment/selfemployment of people and thereby to remove poverty through certain specially designed programs aimed at developing the required social infrastructure. rural electrification.

. farming and farming areas during the 10th Five Year Plan. Inequalities between urban and rural areas further widened. greater attention was given to western regions to reduce the inequality that existed between them and coastal areas. 2005: 324). and more so after independence in 1949. Liberalization of market with much freer labor mobility began in the second phase. there have been three phases: (1) the Central Planning Era (1949-1978). “Collective security” system of rural areas was replaced by “social security. Despite all this. top priority was given to heavy industries. Priority was given to 3Fs—farmers. with a view to eradicating poverty among farmers. The responsibility for welfare was shifted to local government and business. they were allowed freedom to decide what and how much to produce as also to keep some profit and to give incentives to their workers and managers. industrialization was not accompanied by urbanization. The year 1978 has been a watershed in terms of reforms in health care system. The interests of rich were protected. particularly by removing unreasonable taxes and charges which were levied on farmers’ income. and poor and weak were neglected. During the third phase (2000 onwards). the most populous country in the world.Journal of Societal & Social Policy. providing the character of mixed economy to the Chinese economic system. Rural out-migration was prevented and inequality between urban and rural areas continued to exist. This period was characterized by “dualism of welfare rights between people living in cities and people living in countryside” (Aspalter. is also facing the challenge of poverty. In the first phase. and encouraging economic crops and promoting food-processing industries. If we look at the social policy scenario of China. and stability and security were guaranteed to government employees through “The Iron Rice Bowl” (tie fan wan)—“a Chinese version of the cradle-to-grave welfare system in Sweden” (Aspalter. public housing medical care services and special homes for elderly disabled and orphans were started. health care system could be marginally established in countryside. Rural areas were urbanized through creation of small cities to contain rural out-migration.” which was mainly financed from the contributions of prospective beneficiaries. (2) the Pro-Growth Urban Biased Economic Reform Era (1979-1999). It was during this period that programs of labor insurance. 2005: 324). Light industries and processing industries and private business were also permitted. and (3) Pro-poor Growth Era (2000-2004) in the evolution of social policy (Li and Piachaud.45 - . Urban housing was privatized. Enterprises were not under the direct control of the state. 2004). Social Development Policy in China China. majority of people in urban areas were poor. Vol. Laborers were permitted to move from rural areas and settle in urban—industrial centers. 5/1 mented and fractured Indian society witnessing quite often inter-community riots and inter-caste conflicts. we find that historically. and despite the fact that there was urban bias in social policy.

The Second Malaysia Plan (1971: 1) unequivocally states: “National Unity is the Overriding objective of country.e. electricity. economic development which may provide economically gainful work to all able-bodied persons. public infrastructure roads. (ii) assumption of responsibility for creating required infrastructure in the form of roads. Social Development Policy in Malaysia Right from 1957 when Malaysia became independent. The major lessons that we can draw from Chinese social policy are: 1. communication. schools. became more distinct. 2004: 33).46 - . state alone cannot undertake the responsibility of promoting economic growth with social justice i. and overall quality of life in order that varied kinds of inequalities may be reduced. and imposition of progressive taxation system under which those who use them more should be required to pay more. employers and individuals all play a part. Thus during these three phases there have been several transitions in social policy: “from state dominated welfare provision and social control to a mixed social system in which the state. (i) 2. In the present era. (iii) greater attention to be paid to those areas/regions which are relatively more backward in terms of income.” By and large. it has been an integrated society. hospitals. and coastal and western regions on the other. 3. information. of course. with a few exceptions of . water supply. maintain a minimum level of income and ensure a decent and dignified living to all its citizens. The major emphasis in social development policy has to be given on: generation of employment including self-employment to guarantee a minimum level of income based on the spirit of self-help and initiation of income maintenance devices mainly financed through the contributions of prospective beneficiaries. training and education) to help people to avoid or cope with poverty” (Li and Piachaud. from financial redistribution to providing various resources or capital (such as infrastructure.Surendra Singh: Social Development Policy in Asia Inequalities between urban rich and poor on the one hand. Major responsibility for maintenance and support has to be shouldered by each person by engaging in some suitable but economically gainful work with the support of family members and people in the community. particularly those who are disadvantaged. Instead. its first and foremost goal has been to maintain national unity. it has to work in partnership with private sector and civil society organizations to pool varied kinds of resources and make their optimum utilization.

the Central aim has been to bring poor into the mainstream of economic life and to provide opportunity to all Malaysians “regardless of their ethnic origin. programs of social welfare were started. state and district levels to coordinate the developmental efforts made by different government departments. Consequently. During the second phase. National Development Policy (1991-2000) and National Vision Policy (2001-2020).Journal of Societal & Social Policy. and plans—Medium and Perspective Plans. the basic responsibility of the government to formulate and implement social policies continued but private sector.47 - . (2) second phase which started in mid 1980s and continued up to 1997. it would endanger the overall economic achievement of Malaysia” (Doling and Omar. Social Councils have been set up at the federal. region. Social development policies formulated from time to time have been instrumental in creating new jobs. As clearly enunciated in the Fifth Malaysian Plan (1986: 5-6). There has been a strong government committed to the same political ideology for pretty long period of time. gender. particularly by encouraging investment not in labor-intensive industries but in capital and technology intensive ones. extraordinary attention was given to promotion of development of rural areas. irrespective of race. The government has been giving priority to rural development in pursuit of its policy for growth with equitable distribution. and social security organization was established. 2003). families and communities. by maintaining effectiveness of education system and by upgrading the skills of employed workers and retraining of the unemployed. and to some extent non-governmental organizations. political affiliation or state of origin within Malaysia will be able to enjoy the benefits of development and quality of life. In the first phase. There have been three distinctly identifiable phases in the evolution of Malaysian social development policy: (1) first phase which began with independence and lasted up to mid 1980s. and to maintain the continuity of social and welfare services to safeguard the genuine interests of people. 2003: 156). The government’s campaign to eradicate poverty was intensified. The ongoing third phase is characterized by the special measures taken by the government to face the financial crisis of 1997 in which the currency was devalued and economy underwent serious depression. non-governmental organizations and resident associations. were also encouraged to play their role in the area of social services like education and health. Vol. limited armed conflict between Malaysia and Indonesia and racial riots in May 1969 in Kuala Lumpur (Tallawy. 5/1 sporadic skirmishes between government forces and communists. the level of . to participate in commercial and industrial ventures. and (3) third phase which began in 1997 and is currently in operation.” The general thrust of Malaysian social policy is to ensure that all individuals. culture. It has tried to alleviate poverty of all racial groups without any discrimination and promote multifaceted development through clearly stated policies—the New Economic Policy (1971-1990). These riots forced Malaysia to recognize that “unless the structural problem embedded in Malaysia’s multi-ethnic society was effectively addressed.

the Malaysian social development policy has been based on Confucian philosophy which has always emphasized that major responsibility related to well-being of individual member should be shouldered by family and various groups with which he/she is associated. However. Social Development Policy in Japan Japan is one of the developed countries of the world. Article 25 of the Constitution clearly stipulates: “All people shall have the right to maintain the minimum standards of wholesome and cultured . and to get some kind of employment or opportunity for business. community and corporations play a major role in helping the needy to help themselves. 2002: 3). 2005). Provision of facilities and amenities necessary for promotion of human development as also for assurance of a minimum desirable standard living for all coupled with availability of opportunities for doing some suitable economically gainful work leads to reduction in poverty as well as inequality. They have also resulted in provision of special assistance in cash as well kind to those members of poor households who are incapable of earning due to old age or disability. Its culture has been advocating the value of “self-reliance” and “mutual help” and discouraging dependence on the government which is evident from the statement made by the then Premier Hayato Ikeda in a Press meeting on September 7. 1993). In a nutshell. 2. The government has been committed to provide “national minima” to all its citizens at various stages of their life on the basis of principle of “self-help. and private enterprises should provide work opportunities on suitable terms and conditions in a conducive work environment (Jones. 1959 “the basic job of the government is to help the people stand on their own feet” (cf Odaka. Continuance of strong government of a political party or coalition for long time provides continuity to work relating to implementation of good policies. It is a “wage earners’ welfare state” (Aspalter. The government followed the principle of “subsidiarity. 3. education and training. They have also enabled poor to have access to varied kinds of amenities and facilities such as housing. Commitment of the government to maintain national unity on priority basis creates an environment conducive to pursue good policies and thereby to promote socio-economic development. The main lessons that can be drawn from Malaysian social development policy are: 1. public investment and social welfare to promote development.Surendra Singh: Social Development Policy in Asia employment in Malaysia has been close to that of full employment. the government of Japan has been spending generously on education.” according to which the state will interfere only when the family becomes incapable of taking care of its members.” It has pursued the policy of “welfare via jobs” Japanese society is a welfare society in which family.48 - .

(2) the Early Post War Period (1945-1950). was strictly followed. Social welfare programs were also started for poverty stricken people. Under the second program. As rightly observed by Esping-Andersen (1990: 26). particularly . Undoubtedly. 2001). but the principle of “subsidiarity” under which the first responsibility for taking care of a destitute aged is that of family. Important characteristic features of social policy during this period have been efforts made in the direction of promoting full employment and rapid economic development.” If we look at Japanese social policy we can classify it into four categories: (1) the Pre-War Period. it was easier for the government to do so. and it has become very difficult for family members. Because workers were not organized either in guilds or trade unions. The problem of poverty was considered as a problem of faulty economic structure which could be tackled by providing required support to private employment. health insurance for all” was started in the early 1960s and it was expanded during early 1970s. In the early postwar period. and of public health. not about the poor. encouragement to women’s employment by establishing day-care centers and providing various other necessary facilities. (3) the Rapid Growth Period (1950s-1970). 2002). and maintenance of incomes and employment through subsidies etc. the benefits made available under them were low and eligibility period for pension was pretty long. the responsibility of taking care of a frail parent by children has been shifted to the state mainly because the number of elderly has rapidly risen (senior citizens in the age group of 65+ have constituted 19 percent of the total population of Japan in 2005).” two highly noteworthy developments: (1) The Gold Plan or “Ten-Year Strategy to Promote Health and Welfare for the Elderly” (started in 1989 and revised in 1995 as the New Golden Plan to provide higher level of benefits) and (2) Long-Term Care Insurance (started in 1997). social security program of “pensions for all. Vol. The first one deals with the protection and care of elderly frail persons through a network of institutional as well as community based services. Japan was concerned about its working population. Japan was struggling against the problem of poverty created by mass destruction as a result of war. have taken place. The developmental strategy during this period mainly concentrated on utilization of all possible resource for promoting economic growth and avoiding adoption of welfare programs (Gao.49 - . 5/1 living and in all spheres of life. and (4) the Period of “Socialization of Care” (from 1990s onward) (Campbell. and not by providing public assistance or starting relief projects. It attached workers to private companies which shouldered the responsibility of their welfare. During the era of rapid growth. initiation of a series of actions at the level of companies to employ people and guarantee them at least a basic minimum.Journal of Societal & Social Policy.” During the current era of “socialization of care. the State shall use its endeavors for the promotion and extension of social welfare and security. In the Pre-war period. in the small business sector in rural areas. A number of regulations relating to health insurance were also passed by the government to ensure that there were not major variations across companies. “the state will only interfere when the family’s capacity to service its members is exhausted.

clubs. more through the tax system and a set of employment support policies (trade protection. community halls. The government should support employment generation in all possible ways. People. The government should launch any new welfare/social security program only after examining its long-term implications. 2. it appears that Japan has pursued welfare objectives. men and women of all ages. should be encouraged to help themselves by engaging them in some kind of employment/self-employment. Campbell (2002: 12) has rightly observed: “Looking at the social policy more broadly. Every community should undertake the responsibility of organizing such programs as may enable people to lead a decent and dignified life (for example. etc. particularly in terms of demographic trends and financial burden. building public works) than through traditional welfare state programmes.Surendra Singh: Social Development Policy in Asia daughters and daughters-in-laws.” It is noteworthy here that on the one hand. and should adopt progressive taxation policy requiring those who earn more to pay more so that inequalities may remain within control. the number of elderly with social security coverage has been increasing. particularly a high level of equality of living standards across the population. to take proper care of their weak and seriously ailing parents. Necessary regulations should be passed to ensure that there are not wide variations in the level of income or standard of living of employees across companies. competition inhibiting regulations. Performance of work by able—bodied of all ages should be given top priority and the principle of ‘work is worship’ should be socially recognized and respected. a grave danger has arisen to the continuance of social security schemes relating to old age. Under the long-term insurance system. 5.). have not been paying their contributions. Family members should be obliged to shoulder the burden of elderly frail parents. The time has come when some innovative programs should be started by the state to involve the elderly in productive activities and all eligible citizens should be compelled to make regular payments of contributions that become due. The important lessons that can be learnt from Japanese social development policy are: 1. . Many elderly covered under the Long-Term Care Insurance. Companies/firms should be required to provide suitable employment on adequate terms and conditions of service and take care of welfare needs of their employees. 4. price subsidies. welfare programs and medical services for the elderly have been unified. particularly those in self-employment. As a consequence. 3. there has been a marked decrease in birth rate in 1990s on the other. Expressing his views on Japanese social development policies.50 - .

(1990). The Welfare State in Japan and China: Development and Challenges. Esping-Andersen. B. in those cases where certain categories of people because of some kind of disability of their own are not able to work and earn and their family members are also not in a position to help them. Dolling. Polity: Cambridge. of course. Eastern-Central Europe. the governments are gradually withdrawing but at the same time assisting the grass-root institutions and NGOs. Palgrave Macmillan: London. The government also undertakes the responsibility of creating social infrastructure required for providing basic facilities and amenities like road. The Welfare State in Emerging Market Economies: With Case Studies from Latin America. in C. Casa Verde: Hong Kong. Malaysia and Japan representing different levels of economic development in Asia. and Asia. in organizing a wide variety of innovative programs of socio-economic development with emphasis on promotion of social harmony among diverse groups. Vol. The Three Worlds of Welfare Capitalism. R. health. various political parties constructively cooperate with one another on common issues of national interest. Gao. is geared towards making people self-reliant and mutually helping by developing their competencies and engaging them in some kind of employment/self-employment program which may be able to ensure continuity of income required for leading good quality of life.C. Cambridge University Press: Cambridge. Japanese Social Policy in Comparative Perspective. However. The Welfare System in Malaysia. water supply as also of providing essential services relating to education.51 - . Vivekanandan and N.). and Omar. (2005). (2003). G. C. Undoubtedly. financially as well as technically. J.. in B. J. .). (2002). The Welfare State in Emerging Market Economies: With Case Studies from Latin America. India. The goals of social development policy are more readily achieved if there is social harmony among various groups of people and if there is congenial political climate in which instead of opposing for the sake of opposition. C. (ed. Casa Verde: Hong Kong. Japan’s Economic Dilemma: The Institutional Origins of Prosperity and Stagnation. Aspalter. Welfare States and the Future. housing etc. (2001). References Aspalter. China. the government does provide social protection. mainly based on the principle of social insurance. 5/1 Conclusion Social development policy in all the four countries viz. electricity.) (2003).C. Aspalter (ed. after charging some token fees to prevent dependency among people.. Kurian (eds. Eastern-Central Europe.Journal of Societal & Social Policy. MA. The International Bank of Reconstruction and Development and the World Bank: Washington D. and Asia. Campbell.

C. . Jones (ed. Planning Commission. K. Social Policies in Malaysia. Government of India (1985). Tallawy.Surendra Singh: Social Development Policy in Asia Jones. Routledge: London. World Development Indicators. New Perspectives on the Welfare State in Europe. World Bank (2005). Sixth Five Year Plan 1980-1985. D. in C. Odaka.C. (2004). Government of India: New Dehli. Poverty and Inequality and Social Policy in China. Li. Government of India: New Dehli. The International Bank of Reconstruction and Development and the World Bank: Washington D. The International Bank of Reconstruction and Development and the World Bank: Washington D. The Pacific Challenge: Confucian Welfare States. (2003).52 - . B. The Evolution of Social Policy in Japan. and Piachaud.C.). Washington. M. Government of India (1980). Centre for Analysis of Social Exclusion. (2002). United Nations: New York. Planning Commission. Seventh Five Year Plan 1985-1990. (1993). London School of Economics: London. Economic and Social Commission for Western Asia.

in order to adjust the national pension system’s sustainability.© Casa Verde Publishing. it is seriously discussing another decrease by 17 percent. with the implementation of dramatic changes in policymaking. What attracts the attention of other industrialized countries is the fact that. For this reason. a drastic changeover in the policy-making paradigm has been carried out. 2006 · ISSN 1681 2816 Journal of Societal & Social Policy. progressive ageing of the population. The government’s interest in policy reforms is initiated by the government itself. social change. now oriented towards redistribution. However. Korea is regarded as a dynamic country throughout the world. The past and current experience of Korea provides an apparent counter example of the Reversed-U Hypothesis of Simon Kuznets. today. redistribution. Korea has reduced the level of pension benefits by 15 percent in 1999. Korea Abstract In the last two decades the Korean approach to social policy has completely changed. however. industrialization. Korea was considered primarily a model of rapid development of economy until the early 1990s. since it opposed the prevailing viewpoint saying economic growth should coincide with the distribution of wealth. and the collapse of traditional family structures. 5/1: 53-64 Recent Social Change and Social Policy in Korea Kim Jin-Soo Yonsei University. shifting from a model based on the rapid development of economy to a more redistributive one. social policy. Previously. one of which is the growing fiscal burden if compared to other industrialized countries due to phenomena like extremely low birthrate. fiscal burden. a new national philosophy for the Korean social security system is needed a great deal. changes in Korean social welfare are analyzed in depth and put into comparison with other industrialized countries. Vol. Korean policymaking experiences a system shift. which insists that the countries of the Third World pursue a policy of striking the balance between economic growth and distribution. In Social Policy. In this study. Nowadays. again. and this at a time when it has not yet . Korea’s “development before distribution” policy constituted a comparatively new approach. and. Introduction Today. this new model is not exempt from serious threats. with a shift in priority from pursuing rapid economic development first to enlarging social welfare benefits and services. Keywords: Korea.

The Child Welfare Act has been deeply revised. the Korean welfare state has also been considered to be different from most other industrialized countries. and what the result will be. In the last few years. This study examines the direction of social welfare policy in Korea in dealing with current and future social changes and problems. At the same time. Social Welfare Policy in Korea and Its Recent Situations Today’s social welfare policy in Korea has improved to the extent that equals a full-fledged revolution. EL).Kim Jin-Soo: Recent Social Change and Social Policy in Korea started to pay out the long-earned benefits—this development largely mirrors that of other industrialized countries. as well as the predominant developmental course of welfare states. the social work for the elderly has been expanding and will continue to do so at a fast rate. the category of the registered disabilities that are required for the entitlement for social services and welfare benefits has been broadened. When the newly introduced policies will be implemented. Also. while keeping sustainable fiscal burden with stability. in case its expansion continues at anticipated pace. Korea will not be identified as an economic development model any more. including public pension. The public assistance regulation called “National Basic Livelihood Security System” has been revised a great deal to enhance the minimum living standard. including provisions to protect child abuse . from the perspective of planned government fiscal development. because the grand objectives of the newborn Korean welfare state have not yet been clarified. even though it failed to attract as great public attention as its policy against North Korea or economic policy to overcome the 1998 Economic Crisis. Second. and work injury insurance (Industrial Accident Compensation Insurance. the Korean welfare state should try to find and provide solutions to the following problems: first. as long-term care insurance is to be introduced in 2008. as other industrialized countries did before. unemployment insurance (Employment Insurance. the entire social security net has been strengthened rapidly. The most remarkable change was represented by the reform of social insurances to cover all the population. and put into practice. IACI). It is important not to run into financial difficulties. Throughout the study we will also explain why social welfare needs are sharply increasing. Besides. but rather it will come to stand for a novel welfare state model. somewhat following an Asian welfare model with Confucian characteristics. its fiscal burden is— in all probability—going to exceed the level of industrialized countries with regard to its speed of expanding and continuously growing social welfare needs. and more hospitals for the senile dementia are being constructed. This study depicts the sudden change in Korea’s social welfare policy.54 - . However. the Korean welfare state should formulate a new national philosophy that helps to shape and guide the whole social security system. one should not firmly conceive that Korean welfare state system is entirely distinct from existing welfare state theories. In order to stand as a new model by itself. while relating it to the international context.

. While continuing to increase dramatically social welfare. politicians cannot ignore any more welfare needs of the weak and disadvantaged. It as a matter of fact speeded up the evolution of the whole welfare state system. In the past. These developments did not stem from efforts of the current government alone. while being brought to the fore much more systematically. living support. Even though Korea has expanded social welfare finance rapidly (Table 2).” that is. we witness the coming of a new era. importantly. In fact. 2001. The current stage of a continuous increase in social welfare in Korea is expected to last for the coming decades. Table 1: Increase of Governments’ Financial Burden (percent) Republic Period Social welfare finance out of the total 3rd and 4th 1961-1979 5th 1980-1988 6th 1988-1997 National government 1997-2002 22 Participation government 200224 8 13 18 Source: Presidential Committee on Policy Planning (2006). The government of President Kim Dae-Jung was the one government that has devoted itself to pay special attention to the poor and the socially excluded more than any other government in the past decades.. Korea is still one third as low as other OECD countries (Table 3). social welfare has become inevitably larger because of the speed of everrapid social changes (cf Choi et al.Journal of Societal & Social Policy. compared to 8 percent of the former government headed by Park Jung-Hee (1961-1979) that merely concentrated on economic growth (Table 1). it is located at the bottom of the group of OECD countries. Kim. because people’s needs for social welfare are emerging much more universally. or 38. Kim and Kim.000 dollars per capita. the phenomenon of “welfare is being subject to politics” indicated that political needs and doctrines triumph over the welfare needs of the poor and socially excluded.55 - . Some of these new changes emerged out of system-inherent necessities of the welfare state system at this particular stage of evolutionary development. Nowadays. while others are rooted in the necessity to address acute social problems that have been provoked by the Economic Crisis. Compared to other countries’ social expenditures at a point when they had the same GDP of 10. Fiscal burden on social welfare increased threefold in the government of Kim Dae-Jung (1997-2002) and Ro Moo-Hyun (2002-present). 5/1 and. Korea is now making considerable exertion to reduce the benefit level of public pension to safeguard its long-term fiscal sustainability. namely one in which “politics is being subject to welfare.7 percent of their social expenditure. Korea’s national burden is two third (65 percent) of the average of OECD countries. 2006). Vol. 2004.

rapid social polarization. Korea is well-advised to limit the expansion of its fiscal burden to some extent in the long run.9 51. of OECD Korea Average 8. Table 3: Comparison of the Social Expenditure at the Point of US$10.8 28. The reasons for this are to be found in the sudden surge of a triad of serious social problems at the same time that led to a continuous hefty increase in social welfare. above all.2 Germany France 27.5 Sweden (1977) 27. Expanding in such a rapid way. and so forth.9 Sweden 28.Kim Jin-Soo: Recent Social Change and Social Policy in Korea Table 2: Comparison of the OECD’s Ratio of National Burden and Social Expenditure to GDP.4 36. and so the foreign exchange holding of the country. the needs are sharply augmenting and the awareness of the people has increased a great deal.7 Japan (1981) 10.7 24.1 22. Social Polarization Korea’s general economic indicators reveal that Korea has considerably recovered from the economic crises. 2001 (percent of GDP) Ratio to GDP Social Expenditure National burden Rep.9 27. However.000 Income (in percent) Ratio to GDP Social expenditure USA (1978) 13. That is to say.0 Rep.9 Sources: OECD (2004).4 USA 14.8 Japan 16. a continuous low birthrate and ageing of society.4 Germany (1979) 22. Korea Institute of Public Finance (2005). These are. Korea faces a fundamental dilemma concerning its social welfare expansion. Social Changes and the Necessity of Expanding Social Welfare in Korea Korea is in great need of increasing its social welfare services and benefits despite the rapid expansion of the recent years. the collapse of traditional family and weakened family ties.8 37. GDP per capita has been increasing.8 Average 20.9 UK 21.5 44. the Korean welfare state will have to bear a fiscal burden far greater than that of today’s European welfare states.56 - . However.5 36. because the efforts made so far to deal with social problems require an enormously increased financial burden in the future.8 28. Thus. increased suicides due to the poverty. widened income disparities and polari. of Korea 7 Source: Korea Institute of Public Finance (2005).

and ranges at a constantly high level.7 10.6 10.3 8.0 GDP per person (US$) 10.246.57 7.1 96.2 9.822 9. Social polarization has emerged in recent years as income distribution worsened in comparison to before the economic crisis of 1998.5 2002 5.5 16. With regard to the unemployment rate. the relative income disparities have been widening since 1997.750 (100%) Sources: The Bank of Korea (2003.2 102. new high rates of youth unemployment pose a serious problem to the Korean society. KIHASA (2006).0 8.0 2005 3. the distribution of personal income and asset holding has gone downhill.4 7.8 121.371 6. weakening social integrity and potential growth has lead to difficulties in sustaining economic growth.4 155. showing a 5.004 12.7 3.41 5.49 5.3%) 7.8 18. Absolute poverty sharply increased due to the economic crisis in 1998. but it has inclined to rise in recent years. (C) by 60 percent of median income. the top ten enterprises produced 50 trillion .026 10.720 14.36 5.0 Top 20% / Bottom 20% 5. (B) by 50 percent of median income.9 7.22 5.18 5.1 Notes: (A) by minimum cost of living.8 11.863 (4. Won) Increase Value added of Top 10 enterprises Nominal GDP 191.9 16.5%) 7.6 10.3 4.2 2003 6. Table 5: Value Added of the Top 10 Enterprises and the GDP (2003-2004) (in 100 mill. the gap between conglomerates and medium-and-smallsized companies widened.57 times large gap in 2005.0 3.7 10.4 4. In the business sector.49 2. 2004).542 (35. youth unemployment has been risen to amount to twice the extent of overall unemployment (cf Kim and Kim.784.4 52.1 15.0 74.7 Unemployment rate (%) Youth unemployment 8.57 - .4 199.8 9. In 2004.405 (6.1 2004 6. Vol. The Bank of Korea (various years).0 9.32 5.3 3.1 7.9 9.6%) 537.162 Exchange holding (billion US$) B C 20. Comparing the income of the top 20 percent to the bottom 20 percent.446 (100%) 2003 314. Since the year 2000.6 16. it had been decreasing after Korea had overcome the Economic Crisis.696 (100%) Value Added 2004 506.4 16. Even though Korea’s economic indicators are pointing rather in a positive direction.0 16. Source: KNSO (various years).6 6.41 5. 5/1 zation.7 4.Journal of Societal & Social Policy.864 8705 9. Table 4: Changes of Income Distribution and Economic Indicators (1997-2005) 1997 A Poverty rate 1998 1999 2000 2001 8.7 17.0 6.6 3. 2006).0 8. On the other hand.

6 percent of the total increased amount of GDP. throughout the world. 2002.Kim Jin-Soo: Recent Social Change and Social Policy in Korea 640. The income of the enterprises with over 500 employees was 1. but amounting to as much as 35. of Korea Ageing Society (7%) Aged Society (14%) Super-Aged Society (20%) 2000 2018 (18yrs) 2026 (8yrs) Japan 1970 1994 (24yrs) 2006 (10yrs) France 1864 1979 (115yrs) 2020 (41yrs) USA 1942 2013 (72yrs) 2028 (15yrs) Sources: Korea National Statistical Office. with polarizing profits of different types of companies—as a result. creating one third of the entire economic growth. expected to take the least time. it creates a vicious circle.69 times as much as the income of the companies with 5 to 9 employees in 1999. widening workers’ income disparities. 2004. Table 7: Comparison of the Ageing of Population Rep. 2005). 2003. It means that the top ten enterprises have achieved significant increases. while the others obtain meager growth.4 billion won (US$53. As the gap between conglomerates and small-and-medium-sized companies. occupying 6. Annual Report on the Household Income and Expenditure Survey (various years).98 times in 2004. and rose to 1.58 - .5 percent of the total value added (nominal GDP) of 778 trillion 444.6 billion Won (US$819 billion) in 2004. Monthly Korea Labor Review (2001. Low Birthrate and Rapid Aging Korea entered the stage of an aging society in the year 2000 (with 7 percent of population aging 65 or above). and export-oriented companies and domestic demand-oriented companies becomes even larger. .3 billion) of value added. while the speed of ageing is exceptionally rapid. Table 6: Income Disparities Between Conglomerates and Small-Sized Companies (in percent) 2001 Income of workers of enterprises with over 500 employees / Income of workers of enterprises with 5 to 9 employees 2002 2003 2004 2005 172 185 197 202 198 Sources: Ministry of Labor. to arrive at the stage of an aged society (with 14 percent of population aging 65 or above).

8 percent of total population. The dependency ratio.2 Sources: Korea National Statistical Office.2 9.7 14. Population and Houses Census (various years). Great changes occurred. Suicides committed increased by 5. but will sharply increase up to 37.2 percent in 2000. from 14. in Korea. due to the sudden decrease in the birthrate and the increase in lifespan.16 in 2004. and 2 to 3 in 2050. it became 1. Vol.9 0.9 12.14 in 1972. As a consequence. Table 8: Changes of Korea’s Family Structure 1995 1 person households 1 generation households 2 generation households 3 generation households 4 generation households 12. the number of the people who kill themselves out of economic and social despair is 3 people every day (cf Kim and Kim. the suicide rate related to despair and problems of sustaining one’s livelihood is also increasing.. 2004.000 population increased.4 61. one-generation families. from 6. too. Collapse of Traditional Family Structure and Increased Social Unrest Korea’s traditional family culture has been weakened severely due to recent economic and social developments. While the overall birthrate was 4.4 8. are female householders.3 percent in the year 2050.1 percent from 960.8 64. In point of fact.460 in 2000 to 11.3 0. was 1 to 10 in 2000. Korea is obviously in urgent need of implementing policies to overcome all the problems that the phenomenon of an aged society will cause (cf Choi et al. What is alarming is that most of them.000 in 1995 to 1. Consequently. and is estimated to be 1 to 5 in 2018.59 - . .6 in 2000 to 25. the proportion of the elderly needing support from the economically active population will increase dramatically after 2018. Today.000 for the last five years.2 in 2004.Journal of Societal & Social Policy. who are being prone to poverty.47 in 2000 and 1. while the percentage of two-generation families decreased. the number of single-parent family increased by 17. Kim and Kim. The ratio of suicides to 100. as the youth has been moving out.523 in 2004. Particularly.000 in 2000. single parent families. 2006). more than 80 percent.124. the rural area is already an aged society with the aged population totaling of 15. 2006). 5/1 The ratio of the elderly over 65 to the total population was 7. including the increased number of nuclear families. the ratio of the economically active population to elderly above 65.2 2000 15.

The size of expenditure on welfare has been increased by 21.4 11.207 75. and it has been accelerated due to budget expansion for the purpose of the anti-poverty and unemployment policy and public retirement pension after the Economic Crisis.Kim Jin-Soo: Recent Social Change and Social Policy in Korea Projection of Financial Burden Korea has been expanding the size of its fiscal burden due to social welfare since 1997.107 24.365 13.395 89.537 73.629 2. which is respectively US$950 million and US$2.451 5.6 16.271 204 10. Introducing the National Basic Livelihood Security System.283 1. the budget to protect the poor has been increased threefold compared to that of 1997.4 percent per year on average.3 percent in 1990s on average.703 30. and public pension. in 2020.090 7.6 32.134 4. Table 9: Changes of the Size of Social Welfare Fiscal Burden (100 billion won.3 percent in 2010.363 83. including public pension and health insurance.5 percent in 2020. and 20. 1997. the fiscal burden was increased in the course of broadening the coverage of social insurance. health insurance. the ratio of Korea’s welfare expenditure to GDP will rise significantly to reach 10.7 trillion Won.858 11. which are prone to population aging. Expenditures in social insurance.100 11.580 Source: Ministry of Planning and Budgeting (2004). percent) 1997 1998 1999 2000 2001 2002 2003 2004 Rate of Increase 19.868 2. 1999). 14.655 19. including unemployment insurance.5 Total Public assistance Minority support Health assistance National pension Health Insurance 27. and therefore the ratio of the welfare expenditure to GDP became more than twice as high as that of ten years ago.108 9.843 4.319 729 12.60 - . will above all drive the rapid increase in welfare expenditure (cf OECD. For that reason. Especially.85 billion). the budget for the public assistance was amplified by its fourfold during 1997 to 2003. when Korea’s status of ageing and income approaches the average of the current .641 885 31.6 percent in 2030 (Figure 1). and the maturing of the welfare state system.866 34.270 537 11.2 18.348 2.173 878 28.696 8. Given this projections. In addition.3 24.501 32. the government’s expenditure on welfare has been enlarged on average by more than 19 percent per year.157 30.527 52.438 9.913 3.361 771 17.211 4.230 922 27.464 4.116 40. Ko. and the budget for the unemployment and the laborers by more than 60 percent a year on average (from 900 billion won to 2.314 38. Since 1996. According to the projections based on the expected progress in aging.157 35. national expenditure on social welfare has been increased by 26. increased income.966 2.547 3.

Korea will bear a similar fiscal burden as e.0 10. Korea’s fiscal burden is expected consistently to increase.5 6.Journal of Societal & Social Policy. Compared to the most of those countries. current welfare expenditure in Korea is relatively lower than other industrialized countries. in particular. a universal health insurance covering the whole population. To sum up.5 12. the financial burden of its public pension system. but it is not likely to be low in the long term. the recently introduced unemployment insurance.5 6.8 15.g. . and revised public assistance will expand social expenditure larger than expected.6 6.6 18. Japan.2 14.3 9.0 0. in comparison to other industrialized countries.0 1999 2000 2001 2005 2010 2015 2020 2025 2030 Pension & Work Compensation Insurance Health Social Welfare Labor Institute of Public Finance Sources: Korea Institute of Public Finance (various years). Vol. because Korea has to face the problems of social polarization.61 - .0 17. America. and Australia.0 8. due to the accelerated aging of population and the increasing number of public pension beneficiaries (cf OECD. the generous benefit level of public pensions.3 7. 5/1 OECD countries.0 3. 2004). Figure 1: Projection of Social Welfare Expenditure (2000-2030) (%) 21.0 12. Even from 2020 onwards.0 20. and the situation caused by the health insurance’s aggravating financial status.

as various forms of publicly funded social assistance are needed to counteract the effects of neoliberalism. it is desirable to set an appropriate goal for devising social and fiscal policies by analyzing the many trials and errors of industrialized countries. they are making considerable progress in various directions. Regardless of its accuracy. their faults and successes. However. it is expected that the ratio of fiscal expenditure on social welfare to the total GDP will jump up to 50 percent in 2050 (KIPF. this projection warns us that national finance would be in difficulty by expanding social welfare expenditure too much. to establish a new core philosophy in social welfare policy in the long-term perspective. Many industrial countries resorted to fundamental social reform (cf Aspalter.62 - . Rather. They have tendency towards 25 percent burden in the long-term. America are expected to increase the long-term fiscal burden. Planning Future Fiscal Burden on Social Welfare Korea is indeed in great need of expanding social welfare and hence its fiscal burden.e. when it provides room for the development of key social welfare policy objectives. The essential point of this plan to expand social welfare services and benefits in the years and decades to come is to learn from other countries’ experiences. On the other hand. while applying the insights of the convergence theory. which is caused by our long-standing indifference to income redistribution and social welfare. Many industrialized countries are reforming social welfare in a new direction. All things considered. driven by the reflection on the trials and errors of the past.b). and.Kim Jin-Soo: Recent Social Change and Social Policy in Korea If the expansion of social welfare continues at this speed. they are likely to adjust it to below 25 . that is. at the same time.g. This means that Korea has to establish a corresponding system to address the main problems of the future. despite of common difficulties in achieving widespread consent. 2003a. publicly-funded forms of social welfare that we find in e. 2004). different industrial countries. and taking into consideration the problem of opportunity costs. European Continent: Continental European countries in the past revealed 25 to 30 percent of fiscal burden. welfare regimes. It is impossible to suggest the appropriate level of fiscal burden from an absolute viewpoint. especially OECD countries. 2. Future of Korea’s Social Welfare The future of Korea as a welfare state would be in better shape when it limits its fiscal burden in the long run. i. Scandinavia: Scandinavian countries are gradually reducing their welfare fiscal burden from over 30 to about 20 percent. reveal a long-term trend of convergence with regard to welfare reform despite their own characteristics on welfare finance: 1.

What is certain is that it would be climbing to about 20 percent eventually. To conclude. and instead started to focus on the strengthening of the essential functions of the welfare state. due to predictably insurmountable fiscal burden the Korean welfare state system has to bear in the years to come. For the time being. It is virtually impossible for Korea to pursue the policy strategies of already long-term established welfare states in Europe (that can rely on century-old social security systems). ensuring minimum standard of living. European countries to some extent gave up their overall policy to ensure existing living standards. and the rapid population aging and the low birthrate. The Commonwealth of Nations: It is predicted that they would sustain a level of over 20 percent of social expenditures per GDP at least to maintain their systems of minimalistic social welfare services and benefits. and fighting social exclusion. It is by no means impossible to supply the very same level of the social security provision of European welfare states with only 20 to 25 percent of fiscal burden. America: It is difficult to forecast because here the private sector is supplying what the public sector does not. which is different from what other welfare states did (cf OECD. 1998. 2004). to avoid an excessive fiscal burden to safeguard its welfare state in the long run.63 - . 1997. 4. Social Welfare Policy Objectives In order to maintain the long-term fiscal burden of around 20 to 25 percent. . the principal policy objective for the Korean welfare state should be to establish a mixed system of welfare provision. aiming to reach social expenditures of about 20 to 25 percent of GPD in the long run. as social problems there are also mounting (cf OECD. while in addition the role of financing higher levels of social security provision should be taken on by companies and individuals. where companies and individuals complement what the public sector fails to supply. 1996a. 1999. such as. The long-term convergence tendency of industrialized countries—in terms of social expenditure—implicates that Korea should try to expand its fiscal burden in a more gradual manner.Journal of Societal & Social Policy. 3. KDI.b. the Korean welfare state needs to develop a distinct strategy. increased number in absolute poverty. 2005). 5/1 percent in the long run. such as social polarization. In the end. It is urgently necessary for Korea to find out its own solutions for the emerging social problems. Korea should focus on ensuring a minimum living standard. because they are struggling with severe fiscal deficits today. as a result of more extreme social changes (speed and extent thereof) in Korea than most of the rest of developed welfare states. Vol. striking the balance among them.

Jeon.W. KDI. C. Choi. OECD (1999). KIPF. 2005-2009 National Fiscal Planning. Bank of Korea: Seoul. Monthly Korea Labor Review. and Kim. Kim. et al. Long-Term Perspectives on Social Changes and Issues in Social Insurance. . Korea Institute of Public Finance (2005). Casa Verde: Hong Kong. KIPF: Seoul. KIPF: Seoul. J. Social Expenditure Statistics of OECD Member Countries. Chongmok: Seoul. OECD: Paris.) (2003). www. (2004). Presidential Committee on Policy Planning (2006).kipf. www. Benefits. KIHASA. Annual Report on the Household Income and Expenditure Survey. Korea National Statistical Office (various years). Korea National Statistical Office (various years). OECD: Paris. Introduction to Social Security. Korea Institute of Public Finance (various years).H.go.S. Korea Development Institute (2005). Korea Institute of Public Finance (various years). (2001).S. No. OECD: Paris. The Welfare State in Emerging-Market Economies: With Case Studies from Latin America. Korea Institute for Health and Social Affairs: Seoul.president. W. and Kim.S.kr. Paris.C. (2006). KIPF.kr. OECD (1998). Social Policy Studies. Aspalter. OECD (1996).Kim Jin-Soo: Recent Social Change and Social Policy in Korea References Aspalter.re. OECD (2004). KNSO. OECD (1997). re. and Asia. Economically Active Population Survey.go. 20. Casa Verde: Hong Kong. K. Population and Houses Census. KIPF. Ministry of Labor (various years). www. Welfare Capitalism Around the World. Social Expenditure Statistics of OECD Member Countries. KDI: Seoul.. Provisional Version. PCPP. OECD: Paris. Employment Trend. Maintaining Prosperity in an Ageing Society. Eastern-Central Europe. Korean Institute of Health and Social Affairs (2006). J.mpb. www. Projection of Social Security Expenditure: 19901997. OECD: Paris. (1999).) (2003).M. BK. kr. Employment and Unemployment. Ko. (ed. volume ii. OECD (1996a). Ageing in OECD Countries: A Critical Policy Challenge. (ed. Making Work Pay: Taxation. KNSO: Seoul. Demographic Changes and Tax and Fiscal Policy: Economic Effects of Tax and Fiscal Policy to Correspond to Ageing of the Population. Korea Academy of Social Welfare: Seoul. Financial Statement Analysis.kr..kihasa. Kim. Ministry of Labor: Seoul.64 - . OECD (1996b). The Bank of Korea (various years). KNSO: Seoul. KIPF: Seoul. KNSO. Crises in Public Pension Programmes in OECD: What Are the Reform Options?. C. J. B. Ministry of Planning and Budgeting (2004). Social Expenditure Data. T.

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