Economic downturn puts two million jobs at risk in Asia

Economic downturn puts two million jobs at risk in Asia

SINGAPORE (AFP): More than two million workers can expect to be laid off in Asia this year, at least half of them in Japan, because of the economic downturn, according to a regional survey published Monday.

The figure was compiled from estimates given to the Straits Times by government officials and economists in Japan, Singapore, Malaysia, Thailand, the Philippines, Indonesia, Hong Kong, Taiwan, South Korea and Bangladesh.

Unemployment in the 10 countries is forecast to leap more than 12 percent or 2.29 million retrenchments to total 21.1 million by the end of the year, with female workers particularly vulnerable.

Japan expects the highest number of lay-offs, with one million jobs to disappear in 2001, while Indonesia and Bangladesh project 400,000 retrenchments and South Korea 200,000.

Of the other surveyed countries, Malaysia estimates 90,000 retrenchments, followed by Taiwan (80,000), the Philippines (50,000), Hong Kong (34,130), Singapore (20,000) and Thailand (15,000).

The job losses are concentrated on manufacturing, with the crucial export sector for many Asian countries suffering from a global downturn in demand.

"Manufacturing, in particular the electronics industry, is the hardest hit," said David Cohen, the director of Asia-Pacific economic forecasts at Standard and Poors.

But Southeast Asian economies were considered better prepared to handle the slump than they were during the 1997-98 crisis when more than 30 million jobs were lost, according to an International Labor Organization report.

"Foreign reserve positions are not as seriously eroded as compared to 1998. Countries now have comfortable budgets to provide tax cuts and spend on retraining," Cohen said.

The Japan Research Institute said the disposal of bad loans over the next two years could result in the loss of 1.5 million jobs.

"It may take five years before unemployment decreases," said institute senior economist Hisashi Yamada.

China, which was not included in the survey, stood to benefit from cost-cutting companies relocating to mainland China and creating jobs there, said Lu Jian Ren of the Chinese Academy of Social Sciences.

But the numbers would be insignificant compared to the eight million retrenched annually due to reforms of state-operated enterprises, he told the Straits Times.

The projected unemployment rates by the end of the year ranged from 3.0 percent in Malaysia to 5.0 percent in Japan and up to 12.0 percent in the Philippines.

In Malaysia, 75-80 percent of the workers laid off so far were women who form the majority of semi-skilled workers in the electronics industry.

In Bangladesh, where the export garment manufacturing is at risk, 90 percent of the workforce is female.