ASEAN warned of massive job losses

ASEAN warned of massive job losses

KUALA LUMPUR (Agencies): Massive job losses could hit Southeast Asian countries as a result of the economic slowdown in the United States, government officials warned on Tuesday.

Thousands of jobs have already been shed this year in the export-dependent region as the global slowdown begins to bite, particularly in countries such as Malaysia and Singapore which rely on U.S. demand for electronics components and products.

The economic downturn is at the top of the agenda for a meeting of labor ministers from Association of Southeast Asian Nations, plus Japan, South Korea and China, in Kuala Lumpur on Thursday and Friday.

Senior officials began meeting Tuesday to finalize details for the ministerial talks.

"The U.S. economic issue is the main problem, that will be a starting point for the ministers to discuss," Bounnhou Phommavongsa, the deputy director-general of Laos' labor ministry, said Tuesday.

Syed Muhamad Abdul Kadir, the secretary-general of Malaysia's human resources ministry, said urgent action was needed to curb layoffs which were the result of employers in export industries anticipating a reduction in demand.

"We must be productive to ensure that we do not face major difficulties," Syed Muhamad said. "The important thing is to take immediate action to curb massive retrenchments."

The nature of the action would be discussed by the ministers, he said.

In Malaysia, where U.S. demand for electronics exports helped pull the economy out of recession brought on by the Asian financial crisis, official figures show that almost 3,500 workers lost their jobs in the first quarter of 2001. However, the official unemployment rate remains at less than 4 percent.

Bounnhou said the ministers would discuss how to fund various human resources and worker skills development projects which were agreed to at their last meeting in Manila.

He said Southeast Asian countries would seek funding from the richer Asian nations of China, Japan and South Korea, and that "we are hopeful that they will help us."

Meanwhile, the Singapore union movement has ratcheted up the pressure on employers to accept its proposal to cut wages instead of jobs, as the global slowdown bites into the economy.

The National Trades Union Congress (NTUC) has issued an ultimatum demanding all companies build a "variable component" into salaries or risk losing union support for other cost saving measures, the Straits Times reported on Tuesday.

Singapore's trade-driven economy is vulnerable to global developments such as the U.S.-led economic slowdown, and the NTUC fears there could be more than 12,000 job retrenchments this year.

Since the city state emerged from the 1997 financial crisis, the union movement has been pushing employers to set aside part of wage increases as a variable component which can be cut to reduce costs and save jobs during an economic downturn.