Millions More Asians to Be Jobless in 2009

By TERESA CEROJANO / AP WRITER

MANILA — Asia is likely to have 7.2 million more jobless people in 2009 than last year due to fallout from the global economic crisis, the International Labor Organization said Wednesday.

It forecast the ranks of unemployed workers would likely balloon to 97 million in 2009 in Asia, the world economy's star performer in recent years but where a third of the population still live on a little over 1 dollar a day.

That would raise the region's jobless rate to 5.1 percent from 4.8 percent last year.

In the most pessimistic scenario, the number of unemployed could swell to 113 million, or 22.3 million more than last year, the ILO said in a report on the crisis' fallout in Asia.

An estimated 51 million new jobs will be needed this year and next to absorb Asia's growing labor force, with most jobs needed in the region's giant economies—20.3 million in India, 10.9 million in China and 3.6 million in Indonesia.

Countries with the highest rates of expected labor force growth through 2010 include Pakistan at 6.1 percent, Cambodia at 4.9 percent, and the Philippines at 4.9 percent.

"There is very little chance that a sufficient number of new jobs will be created in the region this year to keep up with expected labor force growth," the report added.

As fewer jobs are created at home, remittances from the region's army of migrant workers began to slow in the third quarter of 2008.

The Geneva-based ILO said the World Bank now forecasts an overall drop in remittances in 2009—partly due to the deep recession in the US, which accounts for 44 percent of workers' money sent to East Asia and the Pacific, and 28 percent to South Asia.

"As global demand for workers contracts, the flow of migrant workers from developing Asia will moderate in 2009," the report said. "For labor-sending countries, this will exacerbate the challenge of mitigating job losses and generating new employment domestically."

Remittances comprise a third of gross domestic product in Tonga, 17 percent in Nepal, 11 percent in the Philippines, 9.7 percent in Bangladesh and 8.3 percent in Sri Lanka.

Speaking to reporters in Manila, ILO officials warned governments against closing their borders to foreign workers.

"With such a global labor market ... no one country can afford to be in a knee-jerk protectionist policy," said Gyorgy Szirackzki, senior economist of ILO's economic and social analysis unit.

Moazam Mahmood, senior technical specialist of ILO's policy integration and statistics department, said countries will just hurt each other if they implement protectionist labor policies, and "everybody loses."

"The idea is win-win rather than lose-lose," he said.

Szirackzki said it might be much more difficult for countries—especially those with aging populations and few unskilled workers—to invite migrant workers in the future once the need for foreign labor arises.

The ILO report said declining production will also see a shift to informal, more vulnerable work that does not provide protection in case of job loss or illness.

It said the number of vulnerable Asian workers, estimated at 1.08 billion in 2008, could rise this year by 21 million, and in an extreme case, by 61 million.

"The poor face a double crisis—high costs for basic necessities on which they spend the majority of their income, along with economic stagnation that threaten their livelihoods," the ILO said.

Promoting employment and supporting household purchasing power is critical for any stimulus package, as these will drive domestic consumption needed to quickly bolster growth, it added.