The development of the South Korean welfare

regime

Sang-Hoon Ahn Assistant Professor

College of Social Sciences

Seoul National University

Political situation of the authoritarian regime

A very powerful and centralised authoritarian regime established in 1961, as major general Chung-Hee Park and his military followers carried out a coup d'etat and overthrew the democratic 2nd Republic.

The burden of attaining legitimacy *Park chooses economic development as a way of earning ex post facto c

onsent, as is the case in most regimes that lack legitimacy *Export-driven industrialisation based on manufacturing with cheap labour *The necessity of keeping the working class and students under control. *Enactment of a series of undemocratic laws

How did the Korean authoritarian government successfully hold back the protests of civil society?

(1)The situation of 'two Koreas' ; the anti-communist ideology played an important role in suppressing various political and economic conflicts and maintaining domestic peace

(2)The authoritarian regime obtained governance by subordinating the market to its control, under the catch-phrase 'economic development'.

*Despite successful economic growth, most of the 'fruits' occupied by the political and economic ruling coalition without any distributional concerns.

Welfare programmes during the authoritarian period

Welfare during this period was residual and was regarded as a secondary 'regulatory ruling device'.

Despite increasing poverty and social problems provoked by rapid industrialisation, generous welfare was provided only to the privileged groups(eg. civil servants and the military).

The ruling coalition(government-capital) never provided effective welfare policy, with the exception of Inudstrial Accident Compensation Insurance.

Welfare programmes during the authoritarian period(Cont.)

Emphasis on public assistance programmes, which was strictly based upon the principles of less eligibility and selectivism in order to promote the commodification of labour.

The working class without proper social security suffered from 'double jeopardy' : exposed to the ruthlessness of capital without the buffer of social security and the collective action of workers strongly suppressed by the state corporatist.

[table-1] Major changes in social welfare under the authoritarian government(1948-

84)

Year Major changes

1948 ▪ Constitution Article 19: "proper minimum of standard living"

1950 ▪ Military Relief Act

1951 ▪ Police Relief Act

1953 ▪four basic Labor Related Laws: Labor Standard Law, Labor Union Law, Labor Committee Law, Labor Dispute Coordination Law

1961 ▪Child Welfare Act ▪Living Protection Act▪revision of the Labor Standard Law▪Veterans' Protection Act

1962 ▪ Disaster Relief Act▪Government Employee's Pension Act

[table-1] Major changes in social welfare under the authoritarian government(1948-

84)(Cont.)Year Major changes

1963 ▪ Industrial Accident Compensation Act ▪ Labor Affairs Administration ▪ Medical Insurance Act ▪ Military Pension Act ▪ revision of Labor Related Laws ▪ Social Security Related Law

1968 ▪ Tentative Management Act for Self-reliant Exertion Projects

1973 ▪ National Welfare Pension Act ▪ revision of the amendment of the labor-related laws (permission of the general state intervention in labor disputes and management)

1977 ▪ Medical Insurance program to workplace over 500 employees ▪ starting of the Medical Insurance

[table-1] Major changes in social welfare under the authoritarian government(1948-

84)(Cont.)Year Major Changes 1979 ▪ Medical Insurance program to workplace over 300 employees

1981 ▪ Medical Insurance program to workplace over 100 employees ▪ Welfare Act for the Handicapped ▪ Welfare Service Act for the Elderly

1982 ▪ Education of Preschool Children Law

1983 ▪ expansion of the Medical Insurance to workplace over 16 employees ▪ revision of the National Welfare Pension Act

1984 ▪ broadening of the definition of dependents in the Medical Insurance ▪ revision of the Child Welfare Act (universal) ▪ revision of the Welfare Service Act for the Elderly

Political struggle of civil society during the 5th and the 6th Republics

In 1980, the 5th Republic was established by major general Doo-Hwan Chun through another coup d'etat following Park's death at the end of 1979.

Chun maintained authoritarian governance till 1983, when he decided to allow political liberalisation and self-regulation of universities.

During the 12th general election in February 1985 the challenging coalition, composed of the middle class, working class and opposition party politicians gained 58.6% of the vote in total.

This success was not decisive because the sub-sectors of the coalition were not united and shared different viewpoints.

This internal conflict continued for more than a year till the coalition was dismantled by Chun.

Political struggle of civil society during the 5th and the 6th Republics(Cont.)

The critical turning point was the spring of 1987. The opposition parties and the challenging coalition achieved a constitutional amendment to direct a presidential election and the withdrawal of military government.

In the presidential elections of 1987, the ruling coalition candidate, Tae-Woo Rho won because the challenging coalition failed to select a unified candidate.

As a result, the ruling coalition maintained governance without having to change its strategy fundamentally.

[table-2] Introduction and changes in welfare programmes during the transitional period(1986-93)

Year Welfare programmes1986 Minimum Wage Act

National Pension Act

1987 Enforcement regulation of Minimum Wage and National Pension ActAmendment of Medical Insurance Act

1988 Expansion of the Medical Insurance programme to the rural populationGovernment contribution of 50% to the Medical Insurance programme on community-based medical insuranceStarting of the National Pension programme

[table-2] Introduction and changes in welfare programmes during the transitional period

(1986-93)(Cont.)

Year Welfare programmes

1989 Amendment of Industrial Accident Compensation InsuranceExpansion of the Medical Insurance to the urban self employed Maternity Welfare ActWorkers’ Housing Construction programme

1990 Disability Employment Promotion Act

1991 Company Welfare Fund Act

1992 Workers’ Bank programme

1993 Unmployment Insurance Act

Welfare during the 5th and the 6th Republic

During the 5th Republic, the government, lacking in constitutional legitimacy had no other choice but to present a reform-like blueprint.

However, welfare reforms during the 5th republic had limitations ; Programmes such as Minimum Wage Act was not comprehensive enougth, medical insurance system was decentralised and inefficient and National Pension programme was not put into action till the next republic.

Welfare during the 5th and the 6th Republic(Cont.)

After the 'June protest', increasing labour movement put forward the issues of social security reform and moderate group gains power within the ruling coalition.

As a result, there was a 'welfare explosion' ; The coverage of Industrial Accident Compensation Insurance Act expand

ed, medical insurance system was centralised, National Pension was put into action and plans for Unemployment Insurance was set up.

Rho's 6th republic established the framework of welfare state, whether intended or not.

Nevertheless the reform, being designed to regain legitimacy and nullify antagonistic public opinion, lacked a long-term perspective and philosophy.

The 'civilian government' and limited welfare reform

Kim Young Sam was the first civilian president after the long years of military reign.

Economic growth rate began to fall from the beginning of the 1990s and Kim Young Sam focused on economic development during the first half of his term.

The year 1995 proved to be a turning point. Following the World Summit for Social Development in Copenhagen, social welfare issues were raised in South Korea.

The 'civilian government' and limited welfare reform(Cont.)

Three reasons behind such change; 1) The economic growth rate rose to 8.3% in 1994 and this gave

confidence to promote social welfare reforms. 2) The coming general election in 1996 made it politically

necessary to provide more generous welfare. 3) Welfare underdevelopment became a hindrance in joining the

OECD, which was one of the main aims of the civilian government.

Nevertheless, welfare during the civilian government was minimal as shown in the table. Welfare expenditure fell to 3.82% of total government expenditure in 1995, which was even lower than the previous government.

[table-3] Major welfare policies under Kim Young Sam

Year Welfare policy

1993 Introduction of Unemployment Insurance Scheme

1995 Amendment of National Pensions Act to include farmers and fishermen

1996 Enactment of National Medical Insurance Act(to integrate the government officials, teachers’ fund and the local fund)

1997 Enactment of Community Chest Act

The people's government and welfare as a social right

Korea was in jeopardy when Kim Dae Jung took office ; it had to overcome the economic crisis. Also, Korea was under the influence of international financial organisations that limited the autonomy of policy decisions, a price paid for financial loans.

Despite this difficult situation, Kim Dae Jung contributed greatly in mitigating inequality and enhancing social integration through a successful programme of welfare reform as shown in the table.

[table-4] Welfare developments during Kim Dae Jung government

Year Major changes in welfare policies

1998 Unemployment Insurance scheme expanded to workplaces with more than one employeeSocial Insurance Integration Committee formed

1999 Enactment of People’s Health Insurance ActNational Pension system expanded to all citizensEnactment of Minimum Livelihood Guarantee Act

2000 Worker’s Compensation Act expanded to workplaces with more than one employeeEnforcement of Minimum Livelihood Guarantee ActIntegrated Health Insurance scheme put into effect

The people's government and welfare as a social right(Cont.)

A universal system of welfare was established, with coverage of social security considerably enlarged.

Unemployment Insurance and Worker's Compensation extended to workplaces with more than one employee.

Pension scheme became 'national' in 1999 Medical Insurance programme was integrated into a national ad

ministration with the enactment of the 1999 People's Health Insurance Act.

A big change in social services for the socially disadvantaged. A significant increase in welfare expenditure.

[Figure-1] Welfare Expenditure as Percentage of Public Expenditure

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social security public assistance welfare service

The people's government and welfare as a social right(Cont.)

A striking development concerning the public assistance programme, with the enactment of The Minimum Livelihood Guarantee Act. Public assistance became more universal in character and was recognised as a social right.

The reasons for economic and social development during the 'people's government' ;

1)There was a temporary and exceptional increase in state autonomy owing to economic crisis.

2)The growth of civil society(labour movement, NGOs). 3)Pro-welfare and reformative nature of the people's government.