Asia counts social cost of economic crisis

Asia counts social cost of economic crisis

BANGKOK (Reuters): Officials from Asian countries and multilateral agencies have concluded that Asia's 18-month economic crisis had taken heavy social and human tolls in the area.

Participants at a two-day World Bank regional seminar said on Thursday economic turmoil had sharply aggravated unemployment, educational and poverty problems in the hardest hit countries Indonesia, Thailand and South Korea.

The seminar was entitled "Human Dimensions of the Asian Economic Crisis: The Link between Macro Policy and Social Consequences,"

World Bank vice president Jean-Michel Severino told the meeting that developments like Brazil's recent currency problems posed a threat to recovery efforts being made by Asian countries suffering their worst recessions since World War Two.

"Financial stabilization has occurred progressively since last fall. But it is very fragile as the events in Brazil remind us...(if) the financial situation unravels again, we can expect further deterioration of the social situation and unemployment will probably increase," he said.

The International Monetary Fund estimated in a discussion paper that due to the Asian crisis, unemployment in Indonesia soared to about 15 percent in 1998 from 5.4 percent a year earlier.

Thailand also saw its unemployment rate rising to about 6.0 percent from 4.0 percent and South Korean joblessness rose to 7.0 percent from 2.7 percent in the same period.

The IMF said higher unemployment would raise the number of poor in Indonesia, the worst hit nation of the Asian contagion, by up to 12.3 million persons or six percent of its population.

Herman Haeruman, deputy chairman of Indonesia's National Development Planning Agency, said in his paper that unemployed Indonesians currently totaled 15-20 million.

Indonesians falling below the poverty line had jumped to at least 80 million or over 40 percent of national population.

The United Nations Population Fund said in another paper that the crisis forced the Thai government to cut its AIDS control budget by 24.7 percent in 1998 compared with a 5.5 percent reduction for other state expenditure.

It said: "In Indonesia, women who lost jobs in factories and who turned to commercial sex reported that their earnings as sex workers were lower than they had been as factory workers because their clients could not afford to pay much for their services."

The International Confederation of Free Trade Unions in a separate document criticized the IMF and the World Bank for not providing adequate attention to social and human problems brought by their reform programs for the region.

"The crisis has demonstrated the danger of ignoring the social dimension of globalization. Financial and social stability are closely inter-linked. Stabilization policies that lead to social explosions will fail and further undermine the credibility of the IMF and World Bank," it said.