United Nations Public Service Awards Case Studies

○ As the global financial crisis triggered in advanced countries including the US in 2008 started to impact the real economy, it was more likely that the world economy would suffer from un unprecedented, prolonged economic recession.
- The distressed real economy suffered from significantly weakened momentum in economic growth and job creation, worsening current account as well as worrisome changes in capital flow. These negatively impacted the employment and labor market, causing mass unemployment and subsequent increase in unemployment rate. This also exacerbated poverty among the disadvantaged people in society whose number grew continuously.
○ In Korea, the unemployed and disadvantaged people suffered the most during the economic crisis. It became more and more difficult for them to find jobs and their job security became more fragile.
- As such, employees and businesses needed to make firm decisions to overcome the crisis.
○ In terms of economic and employment statistics, the economic growth in the 4th quarter of 2008 turned negative, which was the first such deterioration in 5 years since the 1st quarter of 2003. Other economic indicators continued to get worse and the IMF predicted a bleak, negative 4% of growth for Korea.
- In January 2009, export hit the record monthly low of 32.8% reduction. The number of employment in December 2008 came down by 12,000 year on year, registering a 62 months low while additional 510,000 or 6.9% of people lost their jobs, reflecting fast worsening economic and employment situation.
- Due to concerns about prolonged economic recession, the number of unemployment benefit applicants stood at 930,000 in December 2008, going up by 430,000 or a 84.3% growth year on year. Job seekers and those who experience difficulties in seeking jobs were 1.01 million.
○ Against the aforementioned economic challenges, key members in the society felt the urgency that it is time for more burden sharing and specific activities based on the experiences of overcoming the foreign currency crisis in 1998.
- In February 2009, labor, management and the government as well as representatives from the religious, academic, senior and citizen groups agreed on the historic Agreement by Labor, Management, Civic groups and the Government to Overcome Economic Crisis which specified 60 items including cap on salary increase, employment maintenance, increase in social security and other measures for burden sharing.
○ The Agreement includes that the businesses would ensure employment security for employees while the employees would not seek salary increase. The government would support these efforts while civic groups play an important role in turning the efforts into a social movement.

What is the initiative about? (the solution)
○ The Social Agreement is meaningful in that it was the result of collective participation of labor, management and the government as well as other key members of the society including religious, academic and civic groups. The Agreement showed hope and encouraged the Korean people, and externally it enhanced credibility of the country's commitment. The spirit and philosophy of the Agreement is still very strong at individual business sites, regions across the country. ○ By preventing rapid aggravation of unemployment through stabilizing labor-management relations and job sharing, the Agreement contributed to the fact that Korea was able to achieve economic recovery faster than other OECD member countries. ※ According to OECD, the Korean economic growth in 2009 was the 3rd highest among members following Poland and Australia. OECD Economic Outlook also mentioned Korea as one of the strongest countries in terms of economic recovery out of 2008 global financial crisis with a 5.8% of growth in 2010, which is the 2nd highest following Turkey with a 6.8%. - The agreed wage increase rate between labor and management was the lowest since the 1997 foreign currency crisis and significantly more business sites agreed to cut or freeze salary in return for employment maintenance. ※ Wage increase rate as of May 2009 was 1.5%, which is a 3.5% reduction from 5.0% year on year. The number of business sites that froze or cut salary was 773 or 44.44% of businesses with wage agreement. This is also a 6.2 times of increase from 124 year on year. ※ The number of labor-management collaboration was 6,394, a 2.4 times increase from 2,689 year on year. As of April 2009, 1,544 or 23% of businesses out of 6,871 businesses hiring over 100 employees, participated job sharing efforts, and this maintained jobs for more than 90,000 people in October 2009. ○ After the grand social Agreement, regional and industrial Agreements followed the suit, generating more than 146 Agreements nationwide that have made continuous contribution to regional economic development. ○ International Herald Tribune, New York Times, Xinhua, Wall Street Journal and other foreign media picked up stories about the Agreement raising interest in the efforts and achievements of the Agreement in Korea. ○ Foreign tripartite delegations visiting the Korean Economic and Social Development Commission (ESDC), especially Asian tripartite delegations are making efforts to benchmark the experiences of Korea through the Social Pact to Overcome Economic Crisis in 1998, Social Pack for Job Creation in 2004 and this grand social Agreement by Labor, Management, Civic groups and the Government to Overcome Economic Crisis in 2009.

Who proposed the solution, who implemented it and who were the stakeholders?
○ When ESDC of Korea exchanged MOU with NESDO of Ireland in December 2008, leaders from labor and management including Federation of Korean Trade Unions (FKTU), Korea Employers Federation(KEF), Korea Chamber of Commerce attended the ceremony, and they intensively discussed the importance of social agreement to overcome economic crisis while staying Ireland. ○ Later, FKTU and KEF suggested the creation of the Emergency Meeting of Labor, Management, Civic groups and the Government to Overcome the Economic Crisis. The government and civic groups reciprocated by making commitment for tall support. ○ As a result, the Emergency Meeting was launched with 24 representatives from the labor, management, civic groups(Citizens United for Better Society, YMCA, Korean National Council of Women, Korean National Council of Consumer Organization) including religious leaders, elders of the society and the government(Ministries of Labor, Strategy & Finance, Knowledge Economy, and Health & Welfare). ○ A total of eight working level committee meetings, one open discussion, a workshop, two rounds of meetings among vice representatives and negotiations among leaders before the 2.23 Agreement by Labor, Management, Civic Groups and the Government to Overcome the Economic Crisis was reached. ○ This Agreement specifies the role of the related stakeholder in overcoming economic crisis, the meaning of social agreement as well as the detailed plans to implement and disseminate the agreement nationwide. In other words, labor, management, civic groups and the government are the ones who implemented the Agreement and key stakeholder.

Describe how and when the initiative was implemented by answering these questions
a. What were the strategies used to implement the initiative? In no more than 500 words, provide a summary of the main objectives and strategies of the initiative, how they were established and by whom.
○ Key objectives: as the sluggish economic situation was likely to persist in Korea due to depressed real economy and worsening employment situation, key stakeholder including labor, management, civic groups and the government declared their commitment to play key roles in implementing the Agreement for overcoming the crisis. ○ Key strategies were to expand the awareness that labor and management can seek win-win situation by doing conflict-free negotiation following the direction set at the national level through the grand agreement. ○ The Korean ESDC promoted the discussions by emphasizing the needs for social agreement to overcome economic crisis and was able to create consensus among representatives from labor, management and public interest members. - In December 2008, the Korean ESDC board members agreed to pursue the grand social agreement through the Standing Committee meeting, and convinced KFTU and other labor-management groups to participate through rounds of discussions.

b. What were the key development and implementation steps and the chronology? No more than 500 words
○ In Korea, grand Agreements of labor, management, civic groups and the government were reached to overcome each economic crisis including the Social Pact to Overcome Economic Crisis in 1998, Social Pact for Job Creation in 2004, and this Agreement by Labor, Management, Civic groups and the Government to Overcome Economic Crisis ○ On January 22, 2009, KFTU and KEF held a joint press conference to suggest the formation of an emergency meeting to overcome economic crisis by labor, management, civic groups and the government. - They called for the ways to promote social integration and to overcome economic crisis through burden sharing, and designated ESDC as Secretariat for administrative support. ○ As a result, the Emergency Meeting was launched with 24 representatives from the labor, management, civic groups(Citizens United for Better Society, YMCA, Korean National Council of Women, Korean National Council of Consumer Organization) including religious leaders, elders of the society and the government(Ministries of Labor, Strategy & Finance, Knowledge Economy, and Health & Welfare). ○ The working level committee of the Emergency Meeting was formed to host seven official meetings, open discussion on Feb 10, a joint workshop from Feb 14~15 to come up with a draft agreement. The committee later invited leaders from labor, management and the government on Feb 17, social seniors on Feb 18, religious leaders on Feb 19 to explain the outcome of discussions and listened to their opinion. - On Feb 21, vice representatives from labor, management and the government met to bridge their differences in opinion and on Feb 22, leaders of the groups were gathered to make final adjustment. On Feb 23, the Emergency Meeting adopted the Agreement by Labor, Management, Civic Groups and the Government to Overcome Economic Crisis - An assessment team for implementation with 14 members from labor, management, civic groups and the government was formed with one of the Vice-Chairman of the Korean ESDC as chairperson, checked and assessed the implementation of the Agreement.

c. What were the main obstacles encountered? How were they overcome? No more than 500 words
○ The Agreement contains the details that the labor refrains from labor strike, agrees to freeze, return or cut their salary while the management maintains the employment as much as possible despite negative management environment. During the discussion, it was very difficult to narrow the gaps in opinion. Several business sites, finance sector and the public sector strongly opposed the adoption of the Agreement. ○ However, they decided to reach the Agreement on burden sharing from a broader viewpoint that stronger efforts and implementation by key economic players can bring about hope and encouragement to Koreans. - Civic and religious group have actively participated in the efforts by launching supporting campaigns, and have made significant contribution in reaching and implementing the Agreement.

d. What resources were used for the initiative and what were its key benefits? In no more than 500 words, specify what were the financial, technical and human resources’ costs associated with this initiative. Describe how resources were mobilized
○ In the Agreement, the government's role is to fully support job maintenance and job sharing through labor-management burden sharing and to actively expand the social safety net to protect the disadvantaged and unemployed. In particular, the government has come up with various support measures across job seeking, child care and medical care for low-income, disadvantaged and at-risk families including irregular workers and self-employed with minimum income. ○ The government has earmarked required budget for the support measures that are currently on-going.

Is the initiative sustainable and transferable?
○ The progressive governments of Kim Dae-jung and Roh Moo-hyun signed on the Social Pact for Overcoming Economic Crisis in 1998 and the Social Pact for Job Creation in 2004. The current conservative government has also signed on the Agreement to Overcome Economic Crisis. - In Korea, the Agreements and Pacts through social dialogue in the face of economic crisis, have taken firm roots among Koreans including labor, management, civic groups and the government to solidify their unity and commitment regardless of the inclination of governments. They also serve as locomotives of economic recovery. ○ The efforts to overcome economic crisis through the initiative, brought hope and courage to Koreans. The details of the Agreement are not only implemented at the national level but are faithfully carried out at business site and regional levels. ○ After the current Agreement, 146 agreements were subsequently made at local and industry level, contributing to regional economic and social development. ○ The Social Agreement signed by 24 representatives from labor, management, civic groups including religious/civic/social seniors and the government, is viewed as one of the most advanced and successful cases in overcoming economic crisis at the international level. - Asian tripartite delegations visiting the Korean ESDC including Mongolia, Thailand, Indonesia, Malaysia, and the Philippines etc, are also making efforts to benchmark the experiences of the Korean ESDC in overcoming economic crisis. - The Korean ESDC has also introduced and shared the experiences in various international seminars and in meetings with ILO and AICESIS.

What are the impact of your initiative and the lessons learned?
○ Facing the global economic crisis, labor, management, civic groups and the government were united to overcome the crisis, which serves as a good example for other countries under economic distress. ○ In particular, the Social Agreement is meaningful in that it was led by the private sector - FKTU and KEF suggested the formation of an emergency meeting through a joint press conference. Also, it is meaningful as it emphasizes the burden sharing for economic recovery between labor and management through employment maintenance and job sharing. ○ Also, broader participation was secured from various stakeholder including representatives from civic and religious groups whereas previous participation limited to labor, management and the government. The wider made it possible for the social dialogue between labor and management to be extended across the nation. Commitment to participation by the private sector guaranteed the implementation of the Agreement. ○ The agreement of cooperation between labor and management against challenges and crisis has laid the foundation for overcoming other conflicts at the national level and has also served as an opportunity to further mature the labor and management relations and culture in Korea which has traditionally been conflict-prone. ○ The tripartite representatives came up with solutions to thorny issues including the introduction of flexible working hours, declared the efforts to implement the Agreement. The businesses also made promises that they invest surplus funds into future growth engines. These further paved the way for Korea to take leaps forward to be a leader in the global economy in the 21st century.


Institution Name:		Economic and Social Development Commission of the Republic of Korea
Institution Type:		Government Agency
Contact Person:		Moo-jeong Youn
Title:		Deputy Director of International PR/Cooperation
Telephone/ Fax:		82-2-3215-3826
Institution's / Project's Website:		82-2-3215-3852
E-mail:		jack625_kr@yahoo.co.kr
Address:		6th, 19th fl, Eugene Securities bldg, 23-9, Yoido-dong, Youngdeungpo-gu
Postal Code:		150-710
City:		Seoul
State/Province:		Seoul
Country:

The Problem

Solution and Key Benefits

Actors and Stakeholders

(a) Strategies

(b) Implementation

(c) Overcoming Obstacles

(d) Use of Resources

Sustainability and Transferability

Lessons Learned

Contact Information