The paper provides an assessment of the economic and labour market impacts of the financial and economic crisis in Asia and the Pacific and reviews national policy responses to the crisis. Its aim is to present an overview of the main mechanisms through which the crisis is impacting the region, and to highlight some policy options available to countries confronting the crisis that are likely to have positive outcomes vis-à-vis employment generation, improving social welfare on the basis of decent work principles, and promoting a sound economic recovery.
Section 1 provides an analysis of the impact of the crisis on the region’s economies along with the key channels through which the crisis is being transmitted. It examines economic growth trends in 2008 and projections for 2009. Section 2 assesses the employment and social consequences of the crisis, including the falling demand for labour, downward wage pressures and increasing retrenchments. It identifies the sectors and groups most vulnerable to the crisis and analyses the impact on unemployment, vulnerable employment and working poverty.
Section 3 provides an overview of the size and scope of fiscal stimulus measures in selected countries in developing Asia. It also reviews various policy options available for such programmes, in the areas of public investment/infrastructure expenditures, social transfers to the poor and the vulnerable, and support to enterprises and environmental sustainability. The paper concludes with a brief review of some critical issues on how to maximize the positive economic, employment and social outcomes of the fiscal stimulus measures in developing Asia.