Date: Sun, 2 Aug 98 14:44:35 CDT
From: email@example.com (Rich Winkel)
Subject: DEVELOPMENT: Unemployment in Asia Alarms U.N.
/** ips.english: 432.0 **/
** Topic: DEVELOPMENT: Unemployment in Asia Alarms U.N. **
** Written 4:16 PM Jul 31, 1998 by newsdesk in cdp:ips.english **
Copyright 1998 InterPress Service, all rights reserved.
Worldwide distribution via the APC networks.
Unemployment in Asia Alarms U.N.
28 July 1998
UNITED NATIONS, Jul 28 (IPS) - Unemployment in Asia, triggered by
the ongoing financial crises in most of the region, is rising at
an alarming rate, says the United Nations.
The annual U.N. World Economic and Social Survey released
Monday says that unemployment has been rising sharply in a number
of Asian countries, and is expected to get worse this year. The
increase in the numbers of people without jobs is attributed to
massive lay-offs of both skilled and unskilled workers,
particularly in four Asian countries: Indonesia, Thailand, South
Korea and the Philippines.
The number of unemployed in Indonesia alone is expected to be
between eight million and nine million in 1998, raising the rate
of unemployment there to nine percent.
In South Korea and Thailand, the jobless rates are expected to
jump from a pre-crisis annual average of under three percent to
six percent and eight percent respectively while in the
Philippines, the unemployment rate could reach 10 percent this
year. Unemployment is also up in both Hongkong and China, the
The average unemployment rate throughout Asia for 1998 is
expected to reach 3.5 percent compared with an average of about
2.5 percent in 1997.
The rising unemployment has forced the repatriation of foreign
workers from at least three countries: Malaysia, Singapore and
Thailand. "There also are serious concerns about the social
situation, as the loss of wages and sharply higher inflation have
substantially reduced the standard of living of wide segments of
the population and pushed large numbers into the poverty," the
The International Labour Organisation (ILO) has estimated that
the number of people falling below the government's poverty line
in Indonesia in 1998 could increase substantially from the 22.5
million in 1996.
The report says that the after-effects of the third major
currency crisis of the 1990s has plunged several of the world's
fastest growing economies into a severe recession, slowed world
economic growth and highlighted dangerous weaknesses in the
international market for financial assets.
The economic shock waves set off by a run on East Asian
currencies (the two previous crises struck the Exchange Rate
Mechanism of the European Union in 1992 and the Mexican peso in
1994) will slow world growth to an estimated 2.5 percent in 1998,
after two straight years of better-than three percent growth.
The developing countries are the hardest hit. Growth in 1998
might not exceed three percent, after an average of about five
percent in five of the six preceding years.
The economies of industrial nations are projected to grow by 2.5
percent, down from a decade-high of 2.7 percent in 1997 while the
economies in transition will grow by three percent or more this
year, up from 2.7 percent growth in 1997.
"What is needed at this time, according to a growing number of
experts, is not more decontrol and deregulation, but more
effective official oversight and market-based controls of
financial markets," the survey says.
There were notable weaknesses in official oversight of the
three nations at the epicentre of the crisis - Thailand, South
Korea and Indonesia - as well as in the rescue programmes devised
for these countries by the International Monetary Fund (IMF). The
IMF programmes demanded fiscal tightening - higher taxes and
reduced public spending - as well as higher interest rates as
conditions for loans to shore up their battered national
currencies and banking systems.
The survey says that even during the early stages of the crisis
critics questioned the need for such measures in countries with no
history of fiscal balances.
The severity of the ensuing recessions appear to bear out the
contention that "sharply contractionary macro-economic targets
set for the Asian economies by the IMF and the austerity that
accompanied them were irrelevant to the real problem."
The survey says that investors and currency speculators expect
countries to undertake austerity measures to boost confidence, and
the IMF's stated first order of business was to restore investor
[c] 1998, InterPress Third World News Agency (IPS)
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