Asia-Pacific Labour Market Update - International Labour Market Update ILO Regional Office for Asia…
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Asia-Pacific Labour Market Update ILO Regional Office for Asia and the Pacific | December 2011
The global outlook is increasingly uncertain. Asia will not be immune from turbulence and weak demand. While the
regions economic performance remains positive in some countries impressively so there are signs of slowing
growth, with economic and social vulnerabilities appearing in both industrialized and developing Asia.
The region must not lose the economic and social gains it has made. Policy makers must base their strategies to
reinvigorate economic growth on job creation, social inclusion and better regional integration. Young people require
particular attention; youth unemployment is disproportionately high, yet renewed economic growth will depend on
their skills, drive and talent for innovation.
Small and medium-sized enterprises are the regions main engine of job creation and it will be critical to unlock their
potential with properly designed finance and support services. Green jobs and industries are one area of opportunity
leveraging the shift towards a low-carbon, sustainable development path.
Progress on tackling persistent gender equalities must also not be lost. The regions informal economy remains
massive. Extending affordable social protection can help create resilience, reduce poverty, boost domestic
consumption and strengthen social stability, while preparing for tomorrows ageing workforce. Respect for rights
and constructive dialogue (between government, workers and employers) must be supported with the same
diligence as maintaining low inflation, balanced public finances and other macroeconomic goals.
Quality employment, underpinned by productivity growth, fair wages and decent working conditions, determines the
quality of lives and societies and is key to Asias future growth and prosperity.
Renewed policy focus needed on balanced growth and quality jobs
Economic growth decelerating as outlook
uncertain Figure 1: Real gross domestic product, most recent quarter and Q1 2011 (12-month change, %)
Note: Period in parentheses represents most recent quarter. Source: CEIC Global Database; National statistical offices.
Economic activity during the year moderated in Asia and Pacific due to short-term supply-chain
disruptions resulting from the Japan earthquake
and tsunami in March and weakening external
markets. 2 The deceleration was stronger in
Thailands growth stood at 3.5% in Q3 and will certainly slow in the last quarter of the year as a
result of the increasing costs of the flooding that
has crippled key parts of the country, causing
widespread factory closures and work
However, year-on-year growth remained robust in China (9.1%), Sri Lanka (8.2%), India (7.7%)
and Indonesia (6.5%), and was underpinned by
resilient domestic demand.
Growth in the more industrialized Asian economies was slower than in developing Asia,
and was particularly weak in Australia and New
Zealand in Q2. In Japan the impact of the
earthquake and tsunami led to an overall
economic contraction of 1.0% in Q2 and zero
growth in Q3.
Having focussed on countering inflationary pressures, a number of Asian central banks are
now shifting to monetary easing to alleviate
0.0 1.1 1.5 3.4 3.4 3.4 3.5
5.8 5.8 6.1 6.5
7.7 8.2 9.1
Q1 Most recent quarter
concerns about the euro area debt crisis, weak
confidence in US markets and a possible
contraction in global trade.3 In China, however,
policymakers are juggling these fears while still
striving to contain price inflation which stood at
6.1% in September and 5.5% in October.
The level of external downside risks and increasing uncertainty suggests further economic
slowdown in 2012 for much of Asia, with a
concomitant deceleration in job creation and
worsening job quality.
As well as rebalancing growth towards domestic demand, policymakers must also ensure growth
is inclusive and efficient, to reverse the
increasing inequality seen in many parts of the
region in recent years.
while job creation remains uneven Figure 2: Employment, most recent and prior periods 2011 (12-month change, %)
Note: Ages 15+, except Macau, China (ages 16+) and Sri Lanka (ages 10+); Sri Lanka excludes Northern province. Periods in parentheses represent prior period followed by most recent period. Source: ILO: Laborsta; National statistical offices.
Job creation was robust in Hong Kong (China), Macau (China), Malaysia and Sri Lanka, with year-
on-year employment growth of 4% or higher.
Singapore also saw significant employment growth of 3.9%, driven by job creation in the
On the other hand, employment levels improved less notably in Indonesia (1.4%) and the
Philippines (2.4%), reflecting a marked slowdown
in job creation compared to the previous period.
Job growth was weak in some industrialized economies. In Australia job increases remained
mostly flat at 0.9% in October, and only 1.1% in
New Zealand in Q3. In Japan employment
contraction coincided with the decreasing
economically active population.
In light of the projected deceleration in economic growth in the region, the pace of
employment creation could also moderate
during the latter part of 2011.
and unemployment is falling Figure 3: Unemployment rate, most recent period 2011 and same period 2010 (%)
Note: Rates are not seasonally adjusted; ages 15+, except Macau, China (ages 16+), Pakistan (ages 10+) and Sri Lanka (ages 10+); Sri Lanka excludes Northern province. Source: ILO: Laborsta; National statistical offices.
Employment growth underpinned progress in reducing unemployment rates in ten of fourteen
economies where official data are available.
In Sri Lanka and Thailand unemployment continued to fall, to 4.2% and 0.6% respectively.
However, concerns are warranted regarding job
quality for the newly employed (see below) as
well as the adverse employment impact of
Thailands flooding crisis.
In the Philippines some progress in employment creation was unable to prevent higher
unemployment of 7.1%, as the economy
struggled to generate sufficient jobs to match its
expanding labour force of nearly one million new
labour market entrants in the last year.
but joblessness among young people still a major challenge Figure 4: Youth unemployment rate, most recent period 2011 and same period 2010 (%)
Note: Rates are not seasonally adjusted; ages 15-24, except Hong Kong, China (ages 15-19); Macau, China (ages 16-24); Pakistan (ages 15-19); and Singapore (Residents ages 15-29); Sri Lanka excludes Northern province. Source: ILO: Laborsta; National statistical offices.
0.9 1.1 1.4 1.4
2.1 2.1 2.4
3.9 4.0 4.4 4.5
Prior period Most recent period
2.5 2.6 2.9
4.2 4.2 4.3
6.4 6.6 7.1
2.2 6.7 6.8 7.2
8.3 10.3 10.6
13.8 15.6 16.2
A lack of decent and productive jobs for young people is a drag on Asias economic potential,
and may also threaten social stability. Young
people account for around 20% of the
population in Asia and the Pacific yet make up
almost half of the regions jobless.
Compared to adults, young people are at least three times more likely to be unemployed in the
region as a whole and nearly five times more
likely in South-East Asia and the Pacific.
Although youth unemployment fell in 2011 in seven of the thirteen economies, only in Hong
Kong (China), Sri Lanka and Thailand was the
decline greater than 1.5 percentage points.
However, despite progress, the situation
remains alarming; for example, in Hong Kong
(China) nearly one in six youth in the labour
force was still unemployed in September.
In Pakistan, the Philippines and Indonesia youth unemployment rates increased in 2011
(following some declines in 2010) and remain
higher than at the 2009 peak of the global
economic crisis. Moreover, in Indonesia the
percentage of unemployed young people rose
even as adult unemployment fell, resulting in a
worsening youth-to-adult unemployment ratio.
Unemployment figures tell only part of the story. In low-income economies, there are far more
young women and men stuck in circumstances of
working poverty than are without work. Other
countries face problems related to skills deficits,
graduate unemployment, and a lack of support
services to smooth school to work transitions.
Many of these challenges are particularly acute in
the Pacific Island States (see Box 1).
Box 1: Youth employment challenge in the Pacific Island States
While the challenge of giving youth a better start is common throughout the region, the labour market constraints
faced by young people are perhaps most acut