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

ECONOMIC AND SOCIAL SURVEY OF ASIA AND THE PACIFIC 2013
Box 4.1. (continued)
As highlighted by the call for action on the youth employment crisis that was adopted at the International Labour Conference
in June 2012, there is an urgent need to improve links between education, training and the world of work. Also, governments
need to improve the range and types of enhanced technical vocational education and training, including apprenticeships, other
work-experience schemes and work-based learning to foster youth employment (ILO, 2012i). In the European Union, for instance,
some AMLPs to enhance the supply of labour have taken the form of youth guarantee programmes. A number of these have
been implemented in response to the impact of the global economic crisis on youth unemployment. For example, young people
of Sweden are now offered youth specific activities after 90 days of unemployment. These activities include educational and
vocational guidance as well as coaching on job search activities. They are then combined with work experience, education and
training grants to business start-ups and employability rehabilitation efforts. In Finland, intervention occurs earlier, immediately
upon registering as unemployed. Within a three-month period, each youth has to be placed in either a job or be receiving some
form of education. The success rate of this youth guarantee scheme related to reducing unemployment and inactivity is estimated
at more than 80% (ILO, 2012c). Similar AMLPs have been adopted in Asia and the Pacific. In New Zealand, for example, the
purpose of an initiative entitled “Youth Guarantee” is to increase the educational achievement of targeted 16 and 17 year olds
to improve transitions between school, tertiary education and work.
Indeed, anticipating future skills needs is a critical element of strong training and skills strategies. For instance, the development
success of the Republic of Korea has been in part attributed to a government-led skills development system that has been designed
to ensure that the skills of the workforce coincide with the skills of industry. A fundamental aspect of it has been to invest in
a well-educated and highly skilled workforce.
a Initially, this was known as the “100 day employment guarantee scheme” (100-EG), which was introduced in the wake of the food crisis
in 2008. It was subsequently relabelled the “Employment Generation for the Hard-Core Poor” in fiscal year 2009/10. Others programmes
include the food-for-work (FFW) programme, in which beneficiaries receive food grain instead of cash for their work.
b See Sumarto, Suryahadi and Widyanti (2002) for an evaluation of the programme.
The proposal is to introduce a pension
scheme that has reasonable eligibility
requirements in terms of age, and that
delivers sufficiently high benefits to
avoid falling into poverty
The proposal is therefore to introduce a pension
scheme that has reasonable eligibility requirements
in terms of age, and that delivers sufficiently high
benefits to avoid falling into poverty. Specifically, the
proposal is to grant benefits which are equivalent to
the national poverty line in each country to all persons
aged 65 and above. Moreover, with large proportions
of the labour force in the region engaged in the
informal sector, any broad-based pension scheme
that aims to provide a minimum level of income
security must be universal and non-contributory,
so that receiving a benefit is not conditional upon
having contributed to a pension scheme when
working. This is especially important for women
or persons with disabilities who have had limited
access to formal employment. Administration costs
equivalent to 5% of the total pension expenditure
has been added.
The expenditure to provide a universal, noncontributory
pension for all persons aged 65 or
older in 10 countries in the region is shown in
Figure 4.4. 2 The variation between countries is
determined by the proportion of older people in the
population and in how far the respective national
poverty line compares to GDP per capita. For
the majority of countries, the expenditure is very
affordable, ranging between 1 and 4% of GDP by
2030. In some countries, population dynamics will
lead to a more rapid increase in expenditure to
finance a universal non-contributory pension. For
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