Monthly Archives: May 2014

Crony capitalism and the South Korean ferry tragedy


Dear friends,

I am a little late in posting this up.  Please find below my article published by Red Flag which looks at the underlying structural cause of the Sewol ferry tragedy in South Korea.  On April 16, the Sewol ferry  was travelling between Incheon and Jeju Island when it capsized, resulting in the death of more than 300 of the 476 passengers on board. Nearly all those who died were teenagers – students from the one high school , who were in the same grade. They were participating in a school field trip at the time.  Amongst the other casualties were teachers from the school, at least one crew member and several other passengers.

The tragedy has rocked South Korea to its foundations and has been terribly heartbreaking and enormously sad.  In the past few weeks, there has been increasing outrage at the Park Geun-hye government due to the bungled rescue operation, the lack of safety protocols in place nationally to deal with such disasters, as well as at crony capitalism and government- industry corruption which lie at the core of this tragedy.  Many of the families of the students have begun to stage protests and there has been mass protests in Seoul and elsewhere. Most recently more than 2000 students held a candle light vigil and protest in remembrance of their friends and on the weekend more than 30,000 people attended the candlelight vigil and protest in Seoul.  In the last few days more than 6,000 school teachers also took to the streets to protest against the Park Geun-hye government as a result of the Sewol tragedy and more than 15,000 teachers have signed a statement criticising the government.


The tragic death of more than 300 South Korean students last month has revealed starkly the menace of neoliberal economics. The students were aboard the Sewol ferry, on a school trip, when it capsized with 476 passengers and crew on board.

Only 170 people managed to escape. Hopes for the remaining 306 soon dissipated in the wake of a bungled rescue attempt, which was too slow and hampered by bad weather. While the majority of bodies have been recovered, approximately 30 are still missing.

Nearly all the dead and missing are students from Danwon high school. The tragedy has sent shock waves throughout South Korea. Since 27 April, 1.5 million people have visited memorial altars around the country.

While many Western journalists have sought to promote racist Orientalist stereotyping blaming the tragedy on South Korea’s “Confucian society”, the root of the tragedy lies in crony capitalism.

Almost two decades of neoliberal policies have resulted in a sharp increase in irregular, temporary employment contracts with no job security and salaries that are, on average, 35 percent less than those of regular workers. Today, irregular workers make up 45 percent of South Korea’s workforce. The result is poor working conditions and the downgrading of safety awareness and practice.

In the case of the Sewol, 19 of the 33 crew members were irregular workers – including the captain.

The deregulation of South Korea’s shipping industry under the right wing Lee Myung-bak government (2008-2013) also resulted in a rise in unsafe practices. Deregulation extended ferry service periods from 20 to 30 years, allowing older ships such as the Sewol to continue operating.

A 29 April editorial in the Korean Herald noted the granting of reciprocal favours and a “revolving door between the government and shipping sector”. Industry jobs were granted to “former government officials, mostly from ministries that supervise and regulate shipping companies”.

In the wake of the tragedy, investigators have identified a collusive and corrupt relationship between government officials and the shipping industry, centring on the government-run Korean Register of Shipping, which is responsible for testing and certifying ships and carrying out routine shipment and safety inspections.

The immediate cause of the Sewol’s sinking was overloading and an unsecured cargo. The vessel was carrying up to three times its official cargo limit. According to investigators, since March 2013 the Sewol had carried excess cargo on its Incheon-Jeju route 139 times, resulting in almost US$3 million in profit for the owner, Cheonghaejin Marine Company.

Investigations also revealed unsafe practices on the company’s other ferries, including unsecured cargos and a lack of working life rafts. On 8 May, Cheonghaejin Marine CEO Kim Han-sik was arrested and charged with causing death by negligence.

Public anger over the tragedy, bungled rescue operation and government-industry corruption has continued to rise. On 28 April, Prime Minister Chung Hong-won announced his resignation. Bereaved families have staged several marches on the Blue House (the executive office and residence of the president) and on 10 May, thousands of students held a candlelight vigil and protest.

On May Day, tens of thousands of Korean workers also took to the streets to express their “sorrow and rage” at the disaster and at the neoliberal policies that caused it.

The Korean Confederation of Trade Unions in its May Day statement said: “Safety experts are now pointing to excessive deregulations, privatisation of public transport and emergency services, the use of precarious work arrangements and the corrupt appointment of officials in oversight agencies as causes of the Sewol tragedy.”

The union stated the root cause of the ferry tragedy was “capitalist greed and government support for it”.

A Message from the Q&A Protestors!


Student protestors speakout as to why they protested and why you should too!


Students stage protest on Q&A against Abbott government attacks on education!


For more on the student protest, see my previous blog: This is what democracy looks like – students disrupt Q&A to protest Abbott government attacks on education.


(see end of video for rally details in Melbourne, Sydney, Perth and Brisbane)

This is what democracy looks like: students disrupt Q&A to protest Abbott government attacks on education


qanda banner

Last night on Q & A on the ABC (one of Australia’s public broadcasters) we saw some passion and democracy in action, when a group of university students in Sydney staged a very public and very noisy protest against the Abbott government’s proposed attacks on education and students.  The protest was organised by the Education Action Group at Sydney University and focused on Education Minister, Christopher Pyne, who was appearing on the panel.   The students sought to highlight the Abbott government’s attack on education and students, including deregulation of universities, cutting of funding and increasing student fees.

Bizarrely enough, Q & A cut broadcasting while the protest was on. However, the ABC News posted the full footage of the protest up on their youtube account soon after.

Even more bizarre was when the program resumed  Q & A’s host Tony Jones,  told the studio audience and viewers:

“That is not what democracy is all about and those students should understand that.” 

Clearly, however, it was Jones who did not “understand” what democracy is about.  As quite a few people on social media pointed out, protest and dissent are in fact “democracy in action”.  The ability to protest and dissent is an essential part of the democratic functioning.  To reduce “democracy” to a tightly managed and staged panel discussion, which consistently privileges elite figures, is not democracy



qt5 qt4 qt3 qt2
Overwhelmingly on the ABC News page, the Facebook response to the protest has been positive and supportive of the students actions (Click here to read).

While many rightwingers have criticised the students, so have some on the “left” – claiming as Jones did on the show – that they were not doing their cause any favour.  This is, of course, nonsense.

With their action, the students have managed to gain widespread media coverage about the government attacks on students and education.  Every single major media outlet in the country – whether print, television or online – has reported on the protest and the education cuts and fee hikes.  Many other media sites have also reported on the protest and the government attacks.  Many media articles have also promoted the upcoming national day of action on May 21.

The student’s protest and the government attacks on education has also been trending non-stop on twitter for the last 16 hours and gone viral on Facebook.  Numerous blogs and articles have been written in support of the students and opposing the attack on education and students.

ed rally 21 may

Melbourne: 2pm State Library of Victoria

Sydney: 2.30pm UTS Tower Building.

Perth: 2.30pm Murray St Mall

Brisbane: 2pm Queens Park

Other cities details to come

The protesting students issued a media release about their protest last night:

students qanada

University Students protest on Q&A : Tuesday 6th of May, 2014 press release

Students protested in the Q&A audience yesterday in response to the proposed attacks on higher education in the Commission of Audit. The NSW Education Action Network unfurled a banner, which said: More Brains. Not Warplanes. Fund Education. May 21 Rally @ UTS 2.30pm

The banner was dropped as Education Minister Christopher Pyne confirmed his pro-deregulation stance to the higher education sector. Activists caused the national broadcast to censor the protest, diverting cameras and ultimately shutting down the shows live feed.

Ridah Hassan, Sydney University Education Officer demanded answers from Pyne from the audience of Q&A. “They have $24 billion to spend on Joint Strike Fighters but refuse to adequately fund universities, and instead force that debt onto students already studying in poverty.”

Andy Zephyr, President of the UTS Students Association applauds fellow activists in their pro-education protests. “Two thirds of students live below the poverty line. We continue to fund welfare initiatives to assist students with basic student needs: food, textbooks, stationary, affordable housing. Student Unions have continued pick up where the Government has failed too.”

Eleanor Morley, the other Sydney University Education Officer said “Abbot and Pyne have made it clear that the higher education sector is to follow a US style model, where poor and working class students are effectively locked-out of receiving a quality education. The Commission of Audit shows the Liberal Government intends on increasing the already record-levels of student debt.”

The Education Action Network will be hosting a rally on the 21st of May at 2.30pm at the base of the UTS Tower Building 1. This is part of the National Union of Students National Day of Action against the impending budget attacks of public education.


The National Union of Student’s Education Officer, Sarah Garnham (who is also a member of Socialist Alternative) outlined the government attacks on students in the following article which was published in Red Flag:

This time last year, the Labor government was preparing a federal budget with $2.3 billion worth of funding cuts to higher education.

This time round, as budget day approaches, the Coalition not only remains committed to the cuts but is also indicating that there will be many more attacks on students.

A recent speech by education minister Christopher Pyne, “Freeing universities to compete in a global education market”, set out precisely how the government views education.

“Education policy is, in many ways, economic policy”, he said. “There are enormous spinoff benefits for our domestic economy – in travel, housing, retail and investment … [W]e have expanded education to become our fourth-largest export industry after iron ore, coal and gold.”

For Pyne and the Liberals, there’s no real difference between students and minerals. Both are a source of profit; any red tape strangling its extraction must be removed. They want to find ways to both cut government funding and transfer costs to individual students.

Deregulating fees

The government recently commissioned a review of the “demand driven system” (the current semi-deregulated system) which found that while privatisation is increasing the profitability of education, it hasn’t gone nearly far enough.

The review – conducted by former Liberal federal education minister David Kemp and his closest adviser Andrew Norton – recommends the introduction of a 10 percent loan fee on HECS. It also recommends that HECS support be lowered in general and that HELP support for most postgraduate degrees be removed.

When HECS was first introduced 25 years ago, students repaid a flat fee of $5,400. Today, most students graduate with a debt upwards of $20,000.

This debt is a deterrent for many working class people, especially when coupled with cost of living increases and attacks on student welfare. Today two-thirds of students live below the poverty line.

There are also indications that the government will go further in deregulating and raising fees than recommended in the review.

The vice-chancellors from the richest universities, the Group of Eight (Go8), recently proposed an opt-out system that would allow universities to forego government funding for some courses and charge full fees.

Such a move would amount to the wholesale privatisation of courses and would lead to fee increases of up to 56 percent.

Entrenching a two-tier system

For the Go8 universities, full fees are an opportunity to further distance themselves from the poorer universities and their working class students.

They have the agreement of the education minister. “My view is that … several of our universities [must be] ranked among the very best in the world. The others are thriving in other ways”, said Pyne.

The “other ways” appear to be savage course cuts, staff cuts and, in the case of La Trobe University in Melbourne this year, the abolition of whole faculties. The “demand-driven system” introduced by Labor has already resulted in less competitive universities cutting costs and running down their institutions.

This trend was furthered by the announcement of the $2.3 billion in federal funding cuts and will be accelerated by the introduction of an unregulated fee system: a market mechanism to encourage poorer students to “choose” cheaper degrees at less resourced institutions.

Added to this, Pyne has enthusiastically endorsed another recommendation from the Kemp-Norton review: that private and non-university institutions be incorporated into the Commonwealth scheme. This will mean something very different for Bond University than it will for the majority of TAFEs.

In pursuit of this two-tier system, Pyne is openly drawing inspiration from the notorious US education system. Quoting Adelaide University vice chancellor Warren Bebbington, he said, “[Australia] could have the rich variety of the US university landscape where nearly half of all students … attend teaching-only undergraduate colleges offering only Bachelor degrees … Students have an unforgettable, utterly life-changing educational experience.”

This about a country with an enormous gulf between Ivy League colleges and community colleges; where hundreds of thousands of graduates from community colleges are working for the minimum wage or nothing at all; where only 61 percent of students are able to go to the college of their choice; where students are frequently turned away from study because private companies refuse to extend loans to them; and where student debt has recently surpassed US$1 trillion.

Students need to resist

While working class students will be most disadvantaged by deregulation, the reality is that raising fees and further reducing government funding will affect all students.

The main beneficiaries will be students from wealthy backgrounds and the bank balances of the large institutions.

Students from sandstone universities, 1970s brown brick universities, and corrugated iron/plastic pastiche universities and TAFEs need to work together to fight these attacks.

The government has made it clear that the axe will fall on budget day. Students need to respond immediately.

[The National Union of Students has called demonstrations in every major city for Wednesday 21 May and will be organising protest actions across campuses in the lead-up to those demonstrations. For more information contact your student union or education action group or the National Union of Students.]