The Asian crisis appears to be moving steadily into a new and more ominous phase, with deepening labour unrest in South Korea, growing instability in Indonesia and new signs of a slowdown in China's economy.
To add to the region's woes, scientists warned yesterday that south-east Asia, especially Malaysia, could soon be blanketed by another smoke haze as bush and forest fires spread again across Indonesia, threatening disaster for a territorial economy already battered by a currency and banking crisis.
In South Korea, a labour umbrella group said yesterday it would go ahead with a strike today, raising fears that the recovery of the economy from a debt crisis would be delayed by industrial action.
Unions from car- and container-manufacturing units of the giant Hyundai Group, the country's largest conglomerate, ignored a warning from the state prosecutor's office and said their 40,000 members would walk out this afternoon in accordance with the decision of the Korean Confederation of Trade Unions (KTCU).
At issue is an agreement reached last week between labour, business and government representatives, including KCTU leaders, to revise laws making it easier for companies to lay off workers - illegal until now - and accelerate reforms of Korea's business conglomerates.
The KCTU insists the agreement calls for too much sacrifice from workers, but is divided over how far to push strike action, as stoppages and street confrontations could damage investor confidence and plunge the country back into economic crisis.
For this reason strike action appears to have limited popular support, but labour anger is rising as the majority Grand National Party (GNP) tries to block key concessions in the National Assembly, including the recognition of teachers' trade unions and the right of unions to engage in political activities.
In Indonesia riots against rising prices caused by the economic meltdown have been increasing in frequency and ferocity, and yesterday President Suharto told the military to crack down on protests, as unnamed groups were plotting to destabilise the government.
This is clearly aimed at political opponents who are considering a call to their supporters to take to the streets to protest about the almost certain re-election of the President for a seventh five-year term by the 1,000-member national assembly on March 9th.
They claim that the monopoly of power held by the President and his family have allowed corruption to undermine the economy.
"In this kind of situation there are signs that certain groups are using the chance to achieve their political goals, which they have failed to reach through democratic and constitutional means," President Suharto said. He also charged that Indonesia is a victim of a plot to destroy the economy and has instructed his financial advisers to prepare controversial regulations to peg the ailing rupiah to the US dollar at a more favourable rate than its market value.
With President Suharto (76) in ailing health, political uncertainty has been heightened over who his vice-president and possibly successor might be. The majority Golkar party yesterday nominated two alternatives, the Research and Technology Minister, Dr Jusuf Habibie, and the party chairman, Mr Harmoko, as its choices.
The suggestion that Dr Habibie would be chosen pushed the rupiah to a historic low last month as he is considered to be a highspending financial maverick, opposed to IMF bail-out conditions.
With tensions rising fast, thousands of extra troops have been drafted into the capital Jakarta to prevent demonstrations and the type of rioting which flared up on Thursday in the town of Jatiwangi where hundreds of people set fire to five shops owned by the ethnic Chinese minority in protest against food price rises.
On top of the political and economic emergency comes the threat of a return of the choking, yellow smog caused by bush and forest fires in Indonesia which blanketed parts of south-east Asia between September and November.
Government officials in neighbouring Malaysia have privately expressed serious concern in recent days about the consequences of a return of the nightmare which brought about a dramatic fall in visitors to the region and undermined the economy through days lost due to sickness.
If the fires gain a foothold in Sumatra and Kalimantan where many new "hot spots" have been reported this week, Malaysia, Brunei, Singapore, southern Thailand and the Philippines could see a repeat of the severe air pollution, a World Health Organisation official in Manila said.
Indonesian officials yesterday reported more than 90 areas affected by resurgent bush fires in Sumatra and Borneo island, aggravated by lack of normal monsoon rain caused by El Nino, which has left much of south-east Asia in a parched condition. Most fires are started by small farmers clearing bush for crops and by companies logging the jungle and burning undergrowth to make way for palm oil plantations.
The Association of South East Asian Nations (ASEAN) said yesterday it would have an action plan in place by mid-1998 to deal with smog, with computer links between weather stations and use of national resources in fighting fires on a regional basis.
The Asian crisis has meanwhile begun to impact more heavily on China, where exports have slowed as weaker currencies have sapped demand for Chinese goods and have made Asian export rivals look more competitive.
New signs of economic slowdown appeared yesterday, with a fourth consecutive month of negative inflation and its steepest fall yet. Analysts say that weak consumer demand and slower growth in exports could force the government to stimulate the economy with interest rate cuts or increased government investment.
China's once buoyant economy has turned sluggish since the second half of last year as gross domestic product growth slipped to 8.8 per cent for 1997 from 9.6 per cent in 1996.
The fall in domestic and foreign demand in China comes at a time when ailing state-owned enterprises are laying off workers, raising fears of labour unrest. Unemployed workers in the industrial north-east are said to have agitated for protest action in Beijing recently but had been dissuaded by local party leaders.
Militant labour unionists in Seoul early today called off plans for a nationwide strike by 100,000 workers at the 11th hour citing South Korea's economic crisis.