SOUTH-EAST ASIA: Job Prospects for Youth Stay Dim in 2007

By Marwaan Macan-Markar Reprint | | Print |

Marwaan Macan-Markar

BANGKOK, Dec 26 2006 (IPS) - While South-east Asian countries appear to have made impressive economic strides since the 1997 crisis, the region’s youth may not be able to look forward to a harvest of opportunities in 2007, the 10th anniversary of the Asian financial meltdown that began in Thailand.

This sober assessment by economists from the International Labour Organisation (ILO) stems from studies showing that new jobs for young women and men have not kept pace with speed of the recovery.

‘’Since the crisis, unemployment has declined in South-east Asia, but the only exception has been in youth unemployment,” Gyorgy Sziraczki, senior economist at the ILO’s Asia-Pacific regional office in Bangkok, told IPS. ‘’The growth is not enough to create jobs for youth entering the labour force.”

South-east Asia’s current youth unemployment rate at 16.9 percent of the labour force is the highest when set against youth unemployment rates in East Asia, which is estimated at 7.8 percent, and South Asia, which stands at 11.3 percent, adds Sziraczki.

As worrying to him is fact that youth unemployment has doubled during the 10-year period, starting with the economic downturn after the 1997 financial meltdown. It has gone from 5.5 million unemployed youth, or 9.7 percent of the labour force, in 1995 to some 10.4 million unemployed youth, or 16.9 percent, in 2005.

Countries such as the Philippines, Vietnam and Indonesia have youth unemployment figures that are three times as high as adult unemployment rates, while in Thailand the rates for youth unemployment are four times as high as adult unemployment, according to the ILO.

‘’Obviously, not everybody has benefited from the recovery,” says Sziraczki, whose economic and social analysis division is preparing a report on employment trends across Asia to be released in early 2007.

At the same time, the decade since the financial crisis – when the gross domestic product (GDP) growth in 1998 contracted to -7.1 percent in 1998 – has seen a decline in this region’s working poor, say ILO researchers. The labour force who work but live on less then one US dollar a day has dropped from 51.9 million in 1998 to 29.7 million in 2005, or from 22.8 percent of the labour force soon after the crisis to 11.5 percent as the region recovered.

In fact, a regional U.N. agency is hoping that South-east Asia’s poor will benefit in 2007, since the region is expected to register impressive growth on the 10th anniversary of the financial meltdown.

‘’The growth momentum in the Asia-Pacific region in 2007 is expected to come from strong growth in China and India, and a rebound in economic growth in the South-east Asian economies,” says the Economic and Social Commission for Asia and the Pacific (ESCAP), a Bangkok-based body.

‘’Domestic demand, particularly for investment, along with exports will become the engine of growth (in South-east Asia),” adds ESCAP’s ‘Key Economic Developments and Prospects in the Asia-Pacific Region 2007.’

While the Indonesian and Malaysian economies are expected to reach GDP growth in the neighbourhood of six percent in 2007, Singapore, Thailand and the Philippines are capable of hitting 4.5 percent to 5.5 percent growth, ESCAP predicts. ‘’For developing Asia-Pacific economies, the economic growth outlook in 2007 is one of continued dynamism. Economic growth is projected at 6.9 percent in 2007, marginally lower than in 2006.”

Japan’s strengthening economic indicators are also shaping such expectations, says Ravi Ratnayake, director of ESCAP’s poverty and development division. ‘’If Japan’s revival is sustained, then it will help to offset the slow down in the U.S. economy.”

The sector due to cash in the most from a revived Japanese economy is the one manufacturing for exports. ‘’Exports from the region will benefit from the renewed vigour of Japanese consumers,” states the ESCAP report. ‘’The size of the Japanese economy, the world’s second largest and around twice that of China, implies that even a modest expansion will have enormous effects on the region.”

Yet Ratnayake conceded that benefits of such growth will not be evenly distributed to help lift all South-east Asians living in poverty. ‘’Although growth is taking place, the benefits of growth are not going to the needy people or the poor people in some countries.”

A recent survey in the Philippines illustrates this contradiction. While officials in Manila said in mid-December that they expected this South-east Asian archipelago to hit 5.7 percent GDP growth in 2007, up from the 5.5 GDP growth it had achieved in 2006, it has done little to reduce the number of Filipinos going hungry.

‘’A record 3.3 million households have reported experiencing hunger at least once in the past three months,” the ‘Philippine Daily Inquirer’ reported last week, quoting a recent survey by an independent polling group, the Social Weather Stations.

‘’For the 11th consecutive quarter (since June 2004), hunger incidence among households remained at double digits, reaching a new record high of 19 percent, surpassing the previous record of 16.9 percent reached in both September and March this year,” the paper added. ‘’Moderate hunger rose in Metro Manila (from 8.2 percent to 12.7 percent).”