High unemployment may worsen: ILO

High unemployment may worsen: ILO

BANGKOK (AFP): Asia's unemployment crisis triggered by the
region's economic meltdown may deepen as desperate businesses
further slash their workforces, the International Labor Office
warned on Wednesday.

The crisis has "reversed decades of progress towards full
employment in Indonesia, the Republic of Korea (South Korea) and
Thailand," the Geneva-based Office said as a labor conference
opened here with officials from 12 Asia-Pacific nations
attending.

Job prospects in the region have been "sharply reduced," it
said in a report which warned of serious shortcomings that must
be addressed.

Without urgent action, countries could find themselves
"backsliding into problems of unemployment, underemployment and
poverty that economic growth and industrialization had done so
much to reduce," it said.

"Disastrous employment consequences of the financial crisis
may worsen as banks and enterprises strive to regain
profitability, notably by shedding labor."

ILO Assistant Director-General for the Asia and Pacific region
Mitsuko Horiuchi said that a return to job creation was vital to
prevent a high human cost of the crisis.

"While adjustments in employment and wage levels are probably
inevitable under the circumstances, the suffering these cause,
particularly to women and vulnerable groups such as children and
migrants cannot be ignored."

"However difficult it may be to reverse the current adverse
trends, Asia's economic and social health cannot recover on the
basis of a trade-off between good and bad jobs," she said.

Asia's financial crisis, which erupted in 1997, has seen
thousands of firms plunge into debt, forcing them to cut
operations and lay off staff.

There have been warnings the turmoil could wipe out the
purchasing power of the nascent Asian middle class and hit the
economies of developed nations which have reaped healthy profits
from the region's booming consumption.

Signs of declining labor force participation are already in
evidence, the report said, adding that real wages were falling by
as much as 30 percent in Indonesia, eight percent in Thailand and
five to ten percent in South Korea.