d. SOUTH KOREA Minimum Age for the Employment of Children The Korean Labor Standards Law prohibits the employment of persons under the age of 13 without a special employment certificate from the Ministry of Labor. However, because Korea has compulsory education to the age of 13, the authorities issue very few special employment certificates for full-time work. Children employed under the age of 18 must have written approval from their parents or guardians. Employers are permitted to have minors work only a limited number of overtime hours, and are prohibited from employing them at night without special permission from the Ministry of Labor. Nevertheless, employers often treat employees under 18 as adult workers and do not always accord them the protection they are entitled to under the law. The Korean government reviews the minimum wage rate annually. The government set the minimum wage in 1990 at the won equivalent of $238 per month. The minimum wage law does not apply to firms employing fewer than ten workers. The labor standards and industrial safety and health law limit the maximum work week (including overtime) to 60 hours. As of October 1989, the standard work week in firms employing more than 300 workers was reduced from 46 to 44 hours. Smaller firms will have to follow suit in October 1991. f. Rights in Sectors with U.S. Investment U.S. investment in Korea is concentrated in petroleum/chemicals and related products, transportation equipment, processed food and to a lesser degree in electrical and electronic manufacturing. Workers in these industrial sectors enjoy the same legal rights of association and collective bargaining as workers in other industries. A large proportion of production line workers in labor-intensive industries (including electronics assembly) are young women in their mid-teens. Their places of employment often are cramped and sometimes dangerous. Working conditions at U.S.-invested plants are for the most part better than Korean plants. SOUTH KOREA (D)-Suppressed to avoid disclosing data of individual companies Source: U.S. Department of Commerce, Survey of Current Business August 1990, Vol. 70, No. 8, Table 13 * Section 8 is an abridged version of Section 6 of the Republic of Korea country report included in the Department of State's Country Reports on Human Rights Practices for 1990, submitted to the Congress January 31, 1991. For a comprehensive discussion of worker rights, please refer to that report. 1 1. General Policy Framework MALAYSIA Malaysia has a relatively open, market-oriented economy. Since independence in 1957, the Malaysian economy has shown sustained growth and has diversified away from the twin pillars of the colonial economy, tin and rubber. Real Gross Domestic Product (GDP) growth averaging 6 to 8 percent from 1964-1984 has been accompanied by the development of new crops (palm oil and cocoa) and the expansion of the petroleum sector, which now produces a record 645,000 barrels per day (near capacity) and a steady 1.8 billion cubic feet of natural gas per day as a result of the Persian Gulf crisis. The timber industry grew producing export revenues in excess of the oil sector in 1988. The manufacturing sector was 25.2 percent of GDP. In 1985-1986 the collapse of commodity prices led to Malaysia's worst recession since independence with real GDP growth near zero and nominal Gross National Product (GNP) falling 11 percent. Since then, the economy has rebounded, led by strong growth in manufactured goods exports. In 1990 real GDP growth is expected to be around 8.5 percent. The government plays a large role in the Malaysian economy, both as a producer of goods and services and as a regulator. The government or government-owned entities dominate a number of sectors, particularly plantations and banking. Through the National Equity Corporation, the government has equity stakes (generally minority stakes) in a wide range of domestic companies. In all, government-controlled entities may account for one-third of the economy. These entities are rarely monopolies. They are one (generally the largest) player among several competitors in a given sector. Since 1986 the government has begun to privatize several entities, including telecommunications, ports, a major highway, and the national electricity board. Malaysia encourages direct foreign investment, particularly in export-oriented manufacturing. Multinational corporations control a substantial share of the manufacturing sector. U.S. and Japanese firms dominate the production of electronic components, consumer electronics, and electrical goods. Malaysia is the world's third largest producer of integrated circuits. Foreign investors also play an important role in petroleum, textiles, vehicle assembly, steel, cement, rubber products, and electrical machinery. Due to widening fiscal and current account deficits in the early 1980's, the government imposed stringent controls over its spending in 1984. This effort reduced the federal deficit from 11.3 percent of GNP in 1985 to 5.2 percent in 1989. The recession and strong foreign demand reversed the serious current account deficit by 1987 and has allowed Malaysia to begin reducing its foreign debt. The New Economic Policy (NEP) was established in 1971 with two objectives: (1) to eradicate poverty in Malaysia and (2) restructure the economy in order to end the identification of economic function with race. In particular, the NEP was designed to enhance the economic standing of the ethnic Malays and other indigenous peoples (collectively known as "bumiputras"). The NEP includes broad affirmative action programs in employment, education, and government contracting. MALAYSIA The NEP also seeks to alter the pattern of ownership of corporate equity in Malaysia to ensure that at least 30 percent of corporate equity is held by bumiputras, 40 percent by other Malaysians and no more than 30 percent by non-Malaysians. To this end, the government has established various trusts that have provided government funds to purchase foreign-owned shareholdings on behalf of the bumiputra population. Foreign firms have been urged, and in some cases required, to restructure their equity in line with the NEP guidelines. From 1986 on, successive relaxations in NEP guidelines have reduced rigidities in the economy. While the NEP is scheduled to expire in 1990, a successor policy true to the same objectives will likely be promulgated. Malaysia has a substantially open foreign exchange regime. The Malaysian currency, the Ringgit (M$), floats against the U.S. dollar and other currencies. Bank Negara, the central bank, does not specifically peg the ringgit, but does intervene in the foreign exchange market to smooth out fluctuations and discourage speculation. It generally tracks the ringgit's value against a trade-weighted basket of currencies in which the U.S. dollar is believed to have a large weighting. Over the past two years, the ringgit has traded within a fairly narrow band against the U.S. dollar, ranging from M$2.57 to M$2.75 per U.S. dollar. Payments, including repatriation of capital and remittance of profits, are freely permitted. Payments to countries outside Malaysia may be made in any foreign currency other than the currencies of Israel and South Africa. No permission is required for payments in foreign currency up to M$10,000 (US$3,700). Individual foreign exchange transactions above M$10,000 require an exchange control license. For transactions up to M$10 million (US$3.7 million), the license is obtained upon completion of a simple reporting form which is approved by any commercial bank without reference to the Controller of Foreign Exchange provided certain conditions are met. An individual transaction in excess of M$10 million requires the approval of the Controller. 3. Structural Policies Pricing Policies: Most prices in Malaysia's economy are market-determined but the government sets prices of some key goods, notably fuel, public utilities, motor vehicles, rice, flour, sugar, and tobacco. Tariffs overall average 15 percent and import licenses are required only for a small range of sensitive items. In the agricultural sector, however, restrictive tariffs and non-tariff barriers distort trade significantly. For example, the government sets above-world-market farm gate prices for rice and tobacco to encourage domestic production and to boost depressed rural incomes. Despite this price incentive, the government must import large quantities of rice and use the profits from reselling the cheaper imports to offset losses from the sale of domestic rice at retail prices that are fixed below domestic farm prices. In the case of tobacco, the government presses cigarette manufacturers to use a higher proportion of |