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.