7. From Developmental Liberalism to Neoliberalism

The dual sacrifice of grassroots through repressive work conditions and minimal social welfare became untenable when the dramatic democratic transition in the late 1980s significantly empowered industrial workers and other grassroots citizens vis-à-vis authoritarian developmental bureaucracy and its business allies. It was during this crisis of developmental liberalism that Western neoliberalism in social policy was politically embraced (now by the supposedly democratic political regimes) in order to fend off grassroots political challenges to developmental liberal policies. Furthermore, and ironically, the neoliberal economic crisis of 1997 necessitated sweeping neoliberal social policies and economic practices including indiscriminate layoffs and pay-cuts, generalization of casual contractual jobs, practical annulment of social securities through employment casualization, as well as unrestrained overseas relocation of industrial jobs to China, Vietnam, and so on. These radical changes added up to critically damage the developmental basis of the social policy regime, whereas its social democratic nature is yet to be consolidated.