Job creation key to reducing poverty: ADB

Job creation key to reducing poverty: ADB

Dow Jones, Manila

Asia-Pacific governments must focus on promoting full and
productive employment to reduce poverty around the region, the
Asian Development Bank said in a report released on Tuesday.

The report titled "Labor Markets in Asia: Promoting Full,
Productive and Decent Employment" assesses the state of Asia-
Pacific labor markets and recommends options to expand
employment.

It is published as a special chapter in ADB's Key Indicators
2005 -- an annual statistical data book on economic, financial
and social indicators.

"There are many causes of poverty but ultimately the poor are
poor because they earn too little from the work they do," said
ADB Chief Economist Ifsal Ali.

"To reduce poverty in Asia, governments must do a better job
of providing their people with opportunities to engage in
productive work for a fair wage."

The Asia-Pacific region is home to several of the world's
fastest growing economies, but at least 500 million of its 1.7
billion labor force are either jobless or underemployed, the
report noted.

It added that this number could grow over the next two decades
when an estimated 245 million are expected to join the job
market.

Although high economic growth is a key factor in paring down
poverty, it isn't sufficient to generate productive jobs in the
required amounts, the report said.

It noted that the share of formal employment, both total and
outside of agriculture, has declined or stagnated in a number of
countries in recent years, including India, Indonesia, the
Philippines and Thailand.

Job creation is constrained by a number of factors, including
weaknesses in basic infrastructure, financial systems, property
rights regimes, and regulatory barriers that hamper investments
and job creation.

Technological progress also makes it possible for firms to
expand output with correspondingly smaller job increases.

The report said governments need to develop and adopt growth-
promoting policies that generate large numbers of productive
jobs.

The report recommends key actions that include raising
investments in rural infrastructure, establishing property rights
for entrepreneurs in informal enterprises, and providing
entrepreneurs with better access to credit and producer services.

"Most of Asia's poor and underemployed live in rural areas or
function in urban informal sectors," said Ali. "The most urgent
labor challenge facing governments is to increase opportunities
for these people to engage in productive labor and earn a decent
wage."

At the same time, employment in the formal sector must be
expanded by removing regulatory bottlenecks to the entry and
expansion of firms, and developing nontraditional but relatively
labor-intensive activities throughout each economy, the report
said.

Ali said unless governments around the region promote full and
productive employment, "Asia could continue displaying high
growth rates of output during the next two decades and still be
plagued by huge unemployment, underemployment and poverty."