DEVELOPMENT: Jobless Growth Continues to Plague Asia

By Marwaan Macan-Markar Reprint | | Print |

Marwaan Macan-Markar

BANGKOK, Aug 31 2005 (IPS) - Continued underemployment and unemployment in Asia have conspired to expose a glaring flaw in the pretty picture that is often painted of this region, as an economic success story with impressive growth figures.

Lack of productive work and less than fair wages are key reasons why millions of Asians continue to live in absolute poverty, states the Asian Development Bank (AsDB) in a report released Tuesday.

”Employment growth rates have been disappointing even in countries that have been able to achieve high growth rates of output,” says Ifzal Ali, chief economist of the Manila-based, financial institution.

According to Ali, Asia’s poor will remain in a state of misery because of the lack of good jobs. ”There are many causes of poverty but ultimately the poor are poor because they earn too little from the work they do,” he said.

There are half a billion people who are underemployed or unemployed in Asia and the Pacific out of the region’s total labour force of 1.7 billion people, states the report, ‘Labour Markets in Asia: Promoting Full, Productive and Decent Employment’.

The report identified countries like India, Indonesia, the Philippines and Thailand as typical examples afflicted with the problem of formal employment that has either ”declined or stagnated” despite economic growth.

The AsDB’s revelations echo a similar concern expressed in December last year by the Bangkok-based Economic and Social Commission for Asia and the Pacific (ESCAP), a United Nations agency about ”jobless growth” in Asia.

A case in point was South Korea which was among the leading economies that helped ensure that the Asia-Pacific region recorded a 6.2 percent growth rate in 2005, against a predicted 3.5 percent growth rate for the world economy but still showed rising unemployment.

South Korea chalked up a 3.2 percent growth rate in 2003, followed by 5.2 percent growth in 2004. Yet the country’s unemployment figure rose to 3.6 percent in 2004, up from the 2.8 percent jobless rate in 2002, stated ESCAP.

According to the International Labour Organisation (ILO), widespread underemployment has contributed to the glaring reality of jobless growth. ”Underemployment is not calculated in the right way,” says Ginette Forgues, a specialist on strategies for decent work at the ILO’s Asia and Pacific division.

In many cases, the pay is very low despite long hours worked or ”they are not receiving the minimum amount to stay out of poverty,” she added during an IPS interview. ”Good jobs with decent revenue are essential for poverty alleviation”.

China’s success, in fact, illustrates that point, since the number of its people living in absolute poverty (on less than one US dollar a day) has dropped from 377 million people in 1990 to 173 million by 2003.

Such an achievement, due to China’s impressive economic growth figures over the past decade, was the main reason for a dramatic reduction in poverty across the Asia-Pacific region, states the AsDB.

In its annual ‘Key Indicators 2005,’ which was also released this week, the bank noted that the people living in absolute poverty in the region had dropped from 922 million people in 1990 to 621 million people by 2003.

But the number of people who live below the one US dollar mark account for nearly a fifth of Asia’s population, states the report on the economic, financial and social indicators of the region.

It is a number that gets worse when those who live on less than two US dollars a day are considered. There are nearly 1.87 billion people, or about 57.4 percent of the continent’s population, who were living on less the two US dollars a day in 2003, states the report, which was based on information gathered up to that year.

South Asia continues to be the most troubling area in this regard. While the sub-region reduced poverty from 1990 levels-dropping from over 40 percent of the population living on less than a dollar a day that year to 29 percent by 2003-continued population growth has undermined that achievement.

It meant that the number of extreme poor in South Asia only fell by 45 million people, states the AsDB.

Of the region’s 621 million absolute poor, 327 million live in India, 173 million live in China and 77 million live in other South Asia countries.

China’s lead, in fact, has prompted the AsDB to predict that if the region continues to experience favourable economic growth, the number of people living in extreme poverty ”would decline to 108 million in 2015.”

That milestone would mean the Asian region is well on the road to achieving the first of the Millennium Development Goals (MDGs) that the world’s governments pledged-to halve by 2015, the number of people who were living on less than one dollar a day in 1990.

The other seven MDGs, which were endorsed by governments at a special U.N. summit in 2000, included achieving universal primary education, reducing child mortality and halting the spread of the killer diseases AIDS, tuberculosis and malaria.

To accomplish that, Asian countries cannot ignore labour. ”Most of Asia’s poor and underemployed live in rural areas or function in urban informal sectors,” says AsDB’s Ali. ”The most urgent labour challenge facing governments is to increase opportunities for these people to engage in productive labour and earn a decent wage.”