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ILO Says Unemployment, Slower Growth Undermine Southeast Asia's Economies


The report says unemployment in Southeast Asia is far higher than it was 10 years ago, with some economies failing to recover fully from the region's financial crisis of the late 1990's.

The report lists the countries of Northeastern Asia as having the lowest unemployment rate in the world. But it says that in Southeast Asia, despite positive economic growth rates, unemployment stood at 6.6% last year - compared with 3.7% when the Asian economic crisis struck in mid-1997.

Steven Kapsos, an ILO economist in Bangkok, says the economic crisis has left a legacy of high unemployment rates, especially among the young.

"Growth rates have recovered but they haven't reached where they were prior to the crisis. Unemployment spiked. Youth unemployment rates in Southeast Asia and overall unemployment rates are nearly as high as they've ever been."

The report says that over the past decade, the Southeast Asian labor force has been growing by 2.2% a year, and job creation has not kept pace.

Linda Wirth is a director in Manila of the ILO's sub-regional office for Southeast Asia and the Pacific. She says the Philippines especially lags the behind in creating new jobs to match its growing labor pool.

"There are jobs, but they are not enough for the population, for the demand. In fact, recent figures are showing - there's a consensus - that the jobs are falling in the formal economy. So while jobs are being created, the quality of jobs seems to be getting poorer."

The report does note some bright spots. Cambodia's employment levels have been boosted by strong agricultural production, and booming tourism and garment industries.

In Vietnam, private investment and strong domestic demand are providing work for new entrants to the labor market. China's economic boom has kept urban unemployment relatively low: the government on Thursday put the rate at 4.1%.

But Kapsos says workers moving from rural to urban areas are creating new pressures.

"The question then is what do you do to get these people, who used to be working in the fields, into income-generating activities? They may not have the skills to move to the cities, to take up the type of work that's available there."

The ILO says that the growing labor force in South Asia remains that region's main challenge.

The region's overall unemployment rate held steady at 5.2% in 2006, but the ILO report says young people there are three times more likely to be unemployed than adults.

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