Employment in Latin America and the Caribbean is suffering the worst crisis in the last quarter century due to the economic globalisation process, says “Labour Outlook 2002”, a new report by the regional office of the International Labour Organisation (ILO).

The social situation is even worse than it was when the region was hit by the Mexican financial crisis of 1995, known as “the tequila effect”, and by the Asian financial crisis, which reached Latin America in 1998-1999, said ILO director-general Juan Somavía.

Somavía presented the report to more than 400 representatives of governments and business and labour organisations from 35 nations of the Americas gathered in the Peruvian capital Monday.

The ILO report compares urban unemployment rates in the first nine months of this year with those of the same period in 2001 and found that it had increased from 16.4 to 21.5 percent in Argentina, from 6.2 to 7.3 percent in Brazil, 6.1 to 6.8 percent in Costa Rica, 2.4 to 2.8 percent in Mexico, 9..4 to 9.7 percent in Peru, 15.4 to 16.5 percent in Uruguay and from 13.9 to 15.5 percent in Venezuela.

The region’s average urban employment today stands at 9.3 percent, according to ILO calculations.

The study also shows an increase in the informal labour market, with seven out of 10 new jobs created in the region between 1990 and 2002 being in the informal sector.

In reference to the rise of labour insecurity, the Geneva-based organisation underscores that just six of 10 new jobs involve access to social security services, and only two of 10 employed persons in the informal sector have social benefits.

The Latin American employment situation is characterised by an expansion of social vulnerability and the continued denial of labour rights to employees.

Somavía urged governments and business leaders from the region to take into account the grave crises some countries are experiencing and to “immediately apply emergency social policies to prevent an explosion of poverty, hunger and desperation for millions of unemployed people.”

“We face desperate populations who don’t understand how their countries have ended up in such situations, and in many cases feel they are the true pariahs of globalisation,” the director-general told a Lima press conference, alluding to the situation in Argentina, which he described as the extreme example of the region’s crisis.

“If we don’t reverse this situation, it could deteriorate even further, aggravating poverty and social exclusion, endangering the political stability of many countries, and even threatening the capacity of Latin American societies to maintain democratic coexistence,” he added.

The authors of the report identified the causes of rising unemployment as the deceleration of economic growth in the most industrialised countries – particularly the United States -, the decline in prices for some of the region’s leading commodity exports, and the deep economic depression in Argentina.

They note that the impact of the current crisis is greatest in those countries that have maintained a heavy social debt burden, pending since the 1980s, which contributes to an even greater deficit of decent jobs.

The ILO does not use the category of “underemployment”, common among the official statistics in most of the region’s countries, and instead speaks of the lack of “decent employment”, jobs that meet the standards of national laws and international commitments, with protection provided by a social security system.

“The entire region has entered the globalisation era with a deficit of decent employment.”

In 1990, 63 million urban workers were excluded from decent jobs, or 45 percent of the economically active population, and the number this year reached 93 million, or 50.5 percent of the economically active population, reported Agustín Muñoz, ILO regional director.

Muñoz and Somavía acknowledged that growing international trade integration could prove beneficial for the economies of Latin America and the Caribbean, but noted that it makes the lesser developed countries more vulnerable.

Two-thirds of Latin America’s economically active population is outside the scope of social security system protection in terms of health services and pensions, says the ILO.

The report states that the situation is particularly acute for economically active women, 80 percent of whom lack any social security protection.

Other factors undermining the labour situation are the serious deficiencies of democratic institutions, the expansion of political corruption to unprecedented levels, and society’s declining trust in the independence of the government branches and judicial systems, says the ILO document.

Somavía also mentioned the effects of the state reform and privatisation processes that dominated government policies in the region in the 1990s.

“Almost no one is satisfied with the reforms of the state apparatuses. Some because they think it adulterated the nature of the state, and others because they see the changes as impairing the functioning of the market,” he commented.

Privatisation, said the ILO chief, “in many cases has been beneficial for the population, but in many others it has not. The people are not receiving the benefits of transferring monopolies from the public to the private sphere, which often occurs without improvements in services and even higher rates.”

The ILO’s projections for 2003 have a note of optimism, predicting that the region’s gross domestic product will grow three percent.

Such growth would allow a slight recovery for employment in the region, reducing urban unemployment to around 8.6 percent, near the average rate of the late 1990s, according to the international agency.