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Crisis recovery in Asia

Feb 19, 2009

ILO's new report The fallout in Asia: Assessing labour market impacts and national policy responses to the global financial crisis assesses the impact of the crisis in the Asia-Pacific. It highlights fiscal measures that will maximise employment and have a strong multiplier effect on development.

The fallout in Asia: Assessing labour market impacts and national policy responses to the global financial crisis

Publisher: International Labour Organization, January 2009

In reviewing existing crisis response measures, the report says that just as important as the size of national rescue packages is the need to focus fiscal measures on areas that have the largest potential multiplier effect.

Maximizing the employment impact of stimulus packages and maintaining household incomes and purchasing power should be a central goal, the report says. Packages should be capable of being rolled out rapidly and have a significant impact on employment almost immediately. Measures that are likely to meet these criteria and have a strong multiplier effect include:

  • Expanding already-approved public spending projects (e.g. infrastructure, housing, health, education).
  • Scaling up existing social transfers (e.g. unemployment benefit systems, welfare payments to low income families, other poverty reduction programmes) will help protect the poor and most vulnerable.
  • Programmes to help poor families keep their children in school.
  • Fiscal measures that target credit-constrained businesses; particularly SMEs, labour-intensive industries or those that don’t rely on imports.

When the recovery begins many Asian economies may bounce back quickly, due to their policies and solid underlying fundamentals. To make the most of this the report says that:

  • The social partners – employers and workers organisations – must be involved in policy design and constructive dialogue must be supported.
  • Labour standards must continue to be monitored and respected as they form the basis of decent work and are essential to preserving social progress and maintaining social stability.
  • Crisis response should be seen as an opportunity to rebalance towards more domestically-led growth, including investments that will boost long-term productivity – e.g. workforce skills, research and development, and other measures that will improve the quality of labour, enterprise productivity and environmental protection. In particular, the opportunities for a “green recovery” and “green jobs’ are vast.
Source : ILO
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