ILO report

From the ILO's Labour and Social Trends in Asia and the Pacific 2005:

Recent economic growth in Asia and the Pacific, which is home to more than 4 billion people, has been by far the most rapid in the world. … and is projected to continue outpacing the rest of the world in coming years. Its dynamism has been manifested not only by its rate of growth but also by its rapid and competitive integration into global markets for goods, services and investment. Asia is the biggest destination in the developing world for foreign direct investment.

There is great diversity within Asia and the Pacific. … several countries have remained mired in social conflicts and tensions, with the path to economic and social development as well as democracy hampered by the lack of decent and productive employment opportunities for the population.

The recent relatively low rate of job creation in countries such as Indonesia, Pakistan and India gives cause for concern. Labour force is set to continue growing in the coming years, and unless economic growth becomes more employment intensive (or there is a significant and sustainable improvement in growth) the prospect of denting into the number of unemployed and absorbing millions of new jobseekers are bleak.

In South Asia, employment creation has been unable to absorb the growing labour force. Women in these economies have limited employment opportunities, and if employed, generally earn less than their male counterparts.

Trends in overall employment and unemployment are quantitative indicators but there are critical qualitative dimensions to decent work. In addition to creating new jobs, policy-makers face major challenges to ensure that working conditions are safe and healthy, that basic rights are upheld and that work is productive so that people are able to earn enough to keep themselves and their families out of abject poverty.

Informal wage employment may, in fact, be increasing, and working conditions are often poorer in informal wage employment, such as for casual labourers, than in informal self-employment. In this regard, improving working conditions in the informal economy is a major challenge.

Statistics on the informal economy are scanty. Without better statistics the largest segment of the labour force is not adequately measured and fully understood.

The largest number of poor people lives in South Asia. The poverty rate is especially high in Nepal, Bangladesh and India. In addition to poverty on a per capita basis, it is critical to examine poverty among workers – the concept of “working poverty”. Many people are working – and working very hard and long hours – but not earning enough to keep themselves above the poverty line. Taking the US $ 2 a day poverty line, the proportion of the working poor rose to a shocking 87% in South Asia.

Most of the increase in labour force will be in countries with the highest numbers of working poor and the largest informal economies. The bulk of new entrants into the labour force will occur in China, India, Indonesia, Bangladesh, Pakistan and other large populous Asian countries.

Overall, women workers still remain disadvantaged and discriminated against, so that many countries, especially in South Asia, are not likely to meet the Millennium Development Goals on gender equality and empowerment of women.

Asia still has the largest number of child workers in the 5-14 age group – some 127 million, about 60% of working children in the world.

Another concern in South Asia is the low literacy rate of the adult population. It is not only the overall literacy rate that is conducive to economic growth but also greater equality between men and women. In this respect, South Asia does not fare well either.

Overall prospects for (South Asia’s) labour market largely depend on the performance of India, which has a share in the sub-regional GDP of 80%. The key issues in South Asia include: high levels of unemployment and underemployment; a high incidence of working poverty; low employment generation in high productivity sectors; low adult literacy rates; and large gender gaps in education, participation, unemployment, and wages. South Asia’s growth has been stronger in recent years, and is forecasted to stay above 5 % in the next few years. But the employment situation is not expected to change significantly. The policy challenge is to move from job creation in the informal economy to creating productive employment in the formal sector – otherwise, there is little hope of substantially reducing the number of working poor.

In developing Asia, as in other developing regions where no efficient social protection systems or social safety nets exist, the poor cannot afford to be unemployed and must work in order to survive and support their families. This means the problem is not so much the absence of economic activity but rather the low productive nature of that activity and low earnings. If people working in poverty were able to be more productive and earn more, then poverty would decline. That is why access to decent and productive employment is essential as a sustainable route out of poverty.