Full Report - Subregional Office for East and North-East Asia - escap

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ECONOMIC AND SOCIAL SURVEY OF ASIA AND THE PACIFIC 2013 Figure 4.2. Informal unemployment as percentage of total labour force, latest available data 100 90 80 Percentage of labour force 70 60 50 40 30 20 10 0 India Bangladesh Philippines Indonesia Source: ESCAP, based on World Bank, World Development Indicators. Available from data.worldbank.org/data-catalog/world-development-indicators. Thailand China Fiji Turkey Malaysia Informal employment, non-agriculture, % of total labour force Persons in agricultural sector, % of total labour force Russian Federation In some countries, high population growth rates will lead to an increase in the expenditure of a job guarantee programme, including, for instance, in Bangladesh. In most of them, however, the expenditure will remain relatively constant as a gradual decline in the agriculture sector, resulting in a decline of the proportion of workers in agriculture, offsets growth in the labour force. Moreover, this expenditure is an upper limit as the assumption has been made that anyone who is eligible also participates in the programme and that the size of the informal sector in the non-agricultural sectors is likely to decline over time. Job guarantee and public works programmes have a long history. Since the 1960s and early 1970s, a range of labour-intensive public works programmes have been implemented in the Asia-Pacific region 1 2 3 4 5 6 7 8 Figure 4.3. Expenditure to provide a job guarantee programme Percentage of GDP 9 8 7 6 5 4 3 2 1 Percentage 12 10 8 6 4 2 0 9 10 11 Source: ESCAP. 0 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Bangladesh China Fiji India Indonesia Malaysia Pakistan Philippines Russian Federation Thailand Turkey 2023 2024 2025 2026 2027 2028 2029 2030 -2 178
INVESTING IN INCLUSIVE AND SUSTAINABLE DEVELOPMENT CHAPTER 4 as a policy instrument to create employment and address poverty (see box 4.1). Providing income security for the elderly There are several non-contributory pensions in the region. In many of them, however, the age requirement is relatively high – especially when compared to life-expectancy. A further shortcoming of many schemes is that participants receive low benefits – often too low to provide for even a minimum standard of living. In Nepal, for instance, benefits were initially equivalent to approximately only 10% of GDP per capita (they have since been raised to approximately 25% of GDP per capita). In Thailand, the monthly pension is about two-thirds below the national poverty line, while a means-tested benefit for the elderly in the Republic of Korea is equivalent to only about 5% of the average wage. Box 4.1. Programmes to foster employment In the Asia-Pacific region, important job guarantee schemes targeting vulnerable groups have been introduced. In India, for instance, the Mahatma Gandhi National Rural Employment Guarantee Act has operated since 2005. This Act extends a guarantee of employment for 100 days to every rural household within a programme district that has an adult willing to work as casual labour at the minimum wage, and has become the largest employment programme in the world, supplying nearly 53 million rural households with employment in the fiscal year 2009/10. Similar schemes have also been introduced in Bangladesh, the largest of which is the “Employment Generation for the Hard-Core Poor”. a This scheme also provides 100 days of employment, but targets primarily the extremely “hardcore’’ poor who have no assets, are completely or seasonally unemployed, are marginal farmers or are otherwise excluded from any other social safety net programme. Padat Karya, a labour intensive employment programme existed in Indonesia between 1987 and 1994 to create jobs through workers’ engagement in public works. The programme was reintroduced in the wake of the 1997-98 economic crisis. Due to the urban nature of the crisis, initially the programme was introduced in the urban areas, but some rural areas were also covered later following crop failures. These programmes were available only to the unemployed who were willing to accept lower wages. The kind of activities included in the programme were repairing roads, flood plains and irrigation systems and cultivating fallow land. Participants earned, on an average, 27,500 Indonesian rupiah (Rp) ($2.82) per month, as the programme provided an average of only 4.5 man-days of employment per month to participating households. b Nevertheless, these job guarantee schemes have had an important impact on poverty by creating a social safety net for informal workers. They have also strengthened rural growth by improving the resource base of the rural economy and providing important agricultural infrastructure. It is important to note that providing employment for skilled workers in the formal sector is also vital to foster sustainable and inclusive development. Moreover, special attention should be given to well-designed active labour market programmes (ALMP) that combat youth unemployment, which is significantly higher than unemployment for the labour force at large. AMLPs are usually implemented for the following reasons: to increase labour demand; to enhance the supply of labour; and to improve the functioning of the labour market. One element to increase demand is to reduce the cost of labour and foster employment growth by granting employment subsidies. For instance, in response to the global economic crisis, Turkey introduced wage subsidies by publicly financing social security contributions paid by the employer for a period of up to 54 months for newly hired workers, depending on the age, status and qualifications level of the employee. By doing so, more than 125,000 new young (aged 18-29) workers were employed in 2009 and 2010. Moreover, an additional 140,000 employees who had previously been unemployed for more than 3 months also found employment in 2009 and 2010 (ILO and OECD, 2011). Tax reforms can also be initiated to encourage job creation. For instance, in the Republic of Korea, tax credits have been introduced to offset the burden of social security premiums created by employment growth for small and medium enterprises (SMEs), while youth that are employed by SMEs are exempt from paying income taxes for up to three years (ILO, 2012h). 179
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UNDER EMBARGO UNTIL 03.30 GMT, THUR
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ECONOMIC AND SOCIAL SURVEY OF ASIA
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PREFACE The Economic and Social Sur
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EXECUTIVE SUMMARY FORWARD-LOOKING M
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on education and health. Indebted c
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ACKNOWLEDGEMENTS This report was pr
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CONTENTS Page Foreword ............
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CONTENTS (continued) Page Australia
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BOXES Page A. Forward-looking macro
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FIGURES (continued) Page 1.20. Ineq
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TABLES Page 1.1. Main destination e
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SOURCES OF QUOTATIONS (a) Page 1: a
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▲ WHY FORWARD-LOOKING MACROECONOM
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THE STATE OF INCLUSIVE AND SUSTAINA
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Page 237 and 238: 207 REFERENCES
Page 239 and 240: REFERENCES REFERENCES Abdyrasulova
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Page 243 and 244: REFERENCES (2012). World Energy Out
Page 245 and 246: REFERENCES Ma, K-H (2008). Assessme
Page 247 and 248: REFERENCES (2011b). Child Poverty i
Page 249 and 250: REFERENCES United Nations, Economic
Page 251 and 252: STATISTICAL ANNEX STATISTICAL ANNEX
Page 253 and 254: STATISTICAL ANNEX Table 2. Poverty
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STATISTICAL ANNEX Source: Barro, Ro
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STATISTICAL ANNEX estimates based o
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This publication may be obtained fr
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READERSHIP SURVEY The Macroeconomic
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Half a decade since the onset of th
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