Towards full employment

Growth strategies and macroeconomic policies

At the same time, it must also be accepted that a sudden economic crisis of this magnitude must necessarily be indicative of some weaknesses of the East Asian model, at least in today's context. These weaknesses are difficult to identify at this stage since (as mentioned earlier) the causes of the crisis are as yet poorly understood. But some relevant observations can certainly be made.

The crisis has dramatically highlighted the fact that globalization is double-edged; it expands both risks and opportunities for individual countries. While the policies required to capitalize on the opportunities (precisely those relating to macroeconomic stability, openness, labour market flexibility and human resource development) are by now fairly well understood, the policies needed to avoid excessive risks are not. Attention must now be focused on identifying policies which will help individual countries minimize the risks arising from globalization.

Given the immediate cause of the crisis, namely, extreme volatility of short-term capital flows, it can be plausibly argued that the main problem area concerns the nature and content of openness. From such a perspective, it is now being argued by many economists that the main issue relates to the appropriateness of full capital account liberalization. This, the argument goes, actually contributes little to growth; in fact, it encourages short-term capital flows and hence increases macroeconomic instability which is bad for growth. The main challenge at the level of growth strategies and macroeconomic policies, therefore, is one of designing policies which will restrain the flow of volatile short-term capital and at the same time retain openness to flows of trade and foreign direct investment. Future prospects of full employment in the Asia-Pacific economies will depend quite critically on successfully meeting this challenge.

There is, of course, the immediate problem of reviving growth in the crisis-affected countries. This is important not only for renewed progress towards full employment in these countries but also for sustaining growth in the entire region. As noted earlier, the IMF-designed macroeconomic and structural policies currently being pursued in these countries remain debatable. These debates should not be brushed aside; discussions should continue. Policy dogmatism must be avoided. What is needed is careful monitoring of the evolving situations, together with readiness to change policies which are found to be ineffective in practice.

First, for many countries of the region, an outward-oriented industrialization strategy will call for renewed focus on agriculture. This is not mainly because agriculture remains a major contributor to GDP in many countries. Nor is it because agriculture has the potential for generating a large quantity of additional employment (in fact, too slow a flow of workers out of agriculture has been a major cause of lack of improvement in overall employment conditions in the past). The main reason is that outward-oriented industrialization, if successful, will lead to rising incomes resulting in increased demand for food and agricultural raw materials. If agriculture's response to this growth in demand remains weak, then either this will act as a brake on industrialization apart from accentuating problems of poverty or the economy will become much too dependent on agricultural imports and thus vulnerable. It is not a mere coincidence that the most successful countries of East and Southeast Asia were those which had either developed agriculture prior to embarking on outward-oriented industrialization (e.g. the Republic of Korea) or had considerable slack in agriculture (e.g. Malaysia and Thailand). The relative lack of success of countries such as the Philippines is also attributable to their inability to address the agrarian problem. And the recent experience of Indonesia illustrates the painful vulnerability that import dependence can generate.

Second, for several countries of the region, high population growth (and, consequently, high labour force growth) remains a problem. Long-run improvements in employment conditions will remain difficult unless serious efforts are made now to restrain population growth. Population policies should be viewed as part of employment policies in these countries.

Labour policies, social dialogue and safety nets

Labour market flexibility in the organized sector, as already stated, is one of the ingredients of an employment-intensive growth strategy. The discussions in this report point to three main reasons why this is so. First, there is evidence to suggest that rigidities in the organized labour market have constrained growth of regular wage employment in both transition economies and South Asian countries, and that this is one of the main causes of the lack of progress towards full employment in these countries. On the other hand, an absence of rigidities has helped rapid growth of regular wage employment in some East and Southeast Asian countries. Second, outward-oriented growth strategies in a context of globalization requires continual labour market adjustments in response to changes in global product markets. If rigidities prevent labour market adjustments, economic (and hence employment) growth is likely to be constrained. Third, labour market flexibility can help minimize adverse effects of economic downturns on employment, as the recent experiences of the crisis-affected countries illustrate.

There are two main policy challenges in this area. The first challenge is that of devising the right mechanisms for sustaining flexible labour markets. The analysis presented in the preceding section suggests that establishing of effective mechanisms of social dialogue is the best way of ensuring labour market flexibility (though other measures such as legislative action may also be relevant in some cases), at least in the organized segment of the economy. There are important issues to be addressed here. These concern, among other things, the right balance between institutions for tripartite consultation and systems of bipartite collective bargaining, and the basis for choice between centralized and decentralized collective bargaining systems. Much attention will need to be paid to these issues in future. In some countries of the region, moreover, notably in East and Southeast Asia and in transition economies, there is a need to promote independent and effective organizations of workers and employers; without such organizations, no meaningful social dialogue can occur.

The second challenge is that of combining labour market flexibility with security of livelihood for workers. If labour market flexibility is not to generate insecurity of employment for individual workers and long-term unemployment as a whole, appropriate labour market institutions to assist workers in reskilling and searching for jobs must be in place. Most countries currently lack institutions such as a network of active labour exchanges and training systems capable of providing retraining to retrenched workers. High priority needs to be accorded to establishing such networks and systems.

Besides, appropriate safety nets must be established so that workers who are laid off can have a reasonable period available to them to look for work; indeed, safety nets must be viewed as an essential component of flexible labour markets. For workers in the organized sector, the only form of safety net currently existing in most countries is a system of severance payments. It is well known, however, that even this system suffers from serious problems of enforcement since, in times of economic difficulty, employers often fail to make payments. One issue, therefore, is how to improve enforcement of the existing systems of severance payments. But it must also be recognised that severance payments rarely ensure adequate time for retrenched workers to find jobs. What is required is an unemployment benefit system for organized sector workers, in addition to a severance payment system. As already noted, outside the advanced industrialized countries, an unemployment benefit system is currently in existence only in the Republic of Korea. Urgent steps must now be taken to establish adequate unemployment benefit systems in all countries if labour market flexibility is to be promoted.

Some additional measures are needed to promote labour market flexibility in transition economies. The responsibility for providing social services (health, education, housing, etc.) to formal sector workers in these economies has traditionally rested with their enterprises, and this has severely constrained labour mobility. Increasing labour market flexibility will be difficult unless steps are taken to transfer the responsibility to the State.

It needs to be emphasized that safety nets are also relevant for workers in the unorganized sectors, as the experiences of the crisis-affected countries have shown. The social costs of economic downturns depend quite critically on the extent to which such safety nets exist. In the medium term, innovative ideas for establishing unemployment insurance systems will need to be developed, and the attention of policy makers and researchers must now be focused on this. In the short term, employment guarantee schemes are perhaps the only feasible options available. Even for efficient implementation of such schemes, however, institutional preparations are necessary and much attention will need to be paid to this.

Human resource development

The third problem concerns skill development of informal sector workers. As observed earlier, the informal non-agricultural sector is a major source of employment in most countries of the region. More importantly, this picture is likely to remain unchanged for a long time to come. Improving productivity and incomes in the informal sector, therefore, will remain a priority and such improvements cannot be achieved without skill development. In the past, in most countries in the region, human resource development institutions focused almost exclusively on requirements of the formal segment of the economy, and this needs to change.

The fourth problem is one of finding adequate resources for skill development. Increased emphasis on human resource development will call for increased allocation of financial resources. In most countries, however, governments may not be in a position to mobilise the additional resources required. Budgetary difficulties as well as the need to sustain a stable macroeconomic environment constrain the capacity of most governments to increase expenditure on training programmes. Thus the main issue here concerns the role that the private sector can potentially play in the area of human resource development.

Development of small and medium enterprises

In most developing countries, the relevance of SMEs derives from the fact that they account for a large proportion of non-agricultural employment. They are also more labour-intensive than large enterprises, and this means that their relative growth vis-à-vis that of large enterprises is a major determinant of the overall employment intensity of non-agricultural growth. Furthermore, the fact that SMEs have remained very important even in the advanced industrialized countries of the Asia-Pacific region strongly suggests that they have the potential to play an important role in the growth process. Given the apparent need to make growth as employment intensive as possible, the importance of developing dynamic SMEs can hardly be exaggerated.

As the brief review in Chapter 3 has suggested, SMEs have tended to be viewed in many developing countries of Asia-Pacific as transient forms which will disappear in the long term, although they are important for employment generation in the short term. Thus, while support programmes have been in existence in most countries, a coherent policy framework for developing these enterprises has been lacking. However, in the absence of a coherent macroeconomic framework, support programmes can at best prevent the extinction of SMEs. A fundamental change of approach is now required; SMEs have to be viewed as potentially dynamic agents of growth and development.

From this perspective, it can be said that future policies will need to address three major problems. The first is that of defining an appropriate regulatory framework for SMEs. In most countries, these enterprises operate in a twilight zone. While some of them belong to the formal sector so that the regulatory framework designed for large enterprises becomes inappropriately applicable, others operate in the informal sector where there is virtually no well-defined regulatory framework. Thus, while some SMEs face over-regulation, others have to depend on the whims of local authorities (for example, in matters of taxes or access to business premises), and face serious problems of access to markets, technology and credit. A lot of attention needs to paid to defining an appropriate regulatory framework which assists rather than obstructs the growth of SMEs.

The third problem concerns developing linkages between SMEs and large enterprises. Such linkages can be developed in both production and marketing, and can be beneficial for both types of enterprise. Indeed, the dynamism of small and medium enterprises usually derives from such linkages, as large enterprises can provide an important stimulus for technological innovations and skill development in SMEs. Linkages are well developed in the advanced industrialized countries but rather weak in most developing countries of the region. Policy innovations are needed to develop such linkages.

Gender inequalities

The analysis presented in the preceding chapters leads to three main conclusions. First, although economic growth tends to reduce gender inequalities in employment, it does not eliminate it. Elimination of gender inequalities, therefore, requires special policies. These need to be multidisciplinary and complementary, for example combining special measures promoting women's employment with the provision of childcare facilities. Second, gender issues have not generally been taken into account in formulating economic and social policies in the Asia-Pacific countries. Third, eliminating labour market discrimination can have only a limited impact on gender inequalities in employment since socio-cultural factors, which are important determinants of these inequalities, can change only in the long run.

The fact that eliminating labour market discrimination will have a limited impact on gender inequalities is not an argument for failing to address the problem wherever it exists. Tackling the problem will call for action programmes in three areas. The first type of action programme should seek to review the entire range of labour legislation in an effort to ensure that legislative loopholes cannot be used to continue discriminatory practices in the labour market. While laws and regulations by themselves cannot prevent discrimination, they can clearly serve as helpful tools in the hands of governments and the social partners in their endeavours to eliminate discrimination. Increased attention must also be paid to enforcing such legislation and increasing women's awareness and capacity to make effective use of it.

The second type of action programme should seek to ensure equal access for women to opportunities for skill development, labour market information and social security benefits. Given the historical legacy of unequal access for women, special efforts are necessary. The institutions engaged in providing training, labour market information and social security benefits must actively seek to increase provisions for women.

Child labour

It is worth repeating that promoting full employment facilitates the achievement of the objective of eliminating child labour. Although there is evidence to suggest that sustained economic growth eventually eliminates child labour, this is not an argument for inaction. It is obviously desirable to make special efforts to speed up the process of elimination, particularly of the worst forms of child labour such as work in hazardous occupations and industries, child slavery, child prostitution and child trafficking. The policies and programmes required for this are fairly well known, and the ILO's International Programme for Elimination of Child Labour (IPEC) is already being implemented in a number of countries in the region. Strengthening this programme and the adoption, ratification and implementation of the proposed new Convention on the worst forms of child labour should be regarded as priorities.

Concluding observations

Progress towards full employment in the Asia-Pacific region cannot be said to have been satisfactory, even on a long-term view. Moreover, several countries have recently suffered serious setbacks in their efforts to improve employment conditions through growth. It is important that these facts receive due recognition at this point so that policy efforts in future can properly focus on promoting full employment, as envisaged in Commitment 3 of the Copenhagen Declaration. The specific issues identified above need to be explored, but they also need to be viewed together. Policies in any given area cannot be pursued in isolation from those pursued in other areas; rather they should be viewed as a package.

Debates and discussions on the policy challenges identified above will guide the future course of ILO action. However, some major areas of concern are already clear. These have implications for future ILO support for policy and institutional reforms. A brief discussion of selected past and current ILO activities in support of national efforts to achieve the goal of full employment is included in the annex to this report.

At the international and regional levels, the ILO will strengthen dialogue with the Bretton Woods institutions and other relevant agencies with a view to developing common perspectives on such issues as employment as a central objective of growth strategies and macroeconomic policies, reviving growth in East and Southeast Asian countries, and minimizing the social costs of the Asian crisis and economic reforms in the region as a whole.

At the country level, the ILO will continue and strengthen its work to assist all member States in the region, with the fullest involvement of the social partners, in establishing an appropriate employment policy framework. With these objectives in view, a series of employment policy reviews are being carried out. Within this context, greater attention will also be paid to strengthening the information base on labour markets in individual economies. Adequate labour market information is essential not only for designing employment policies but also for monitoring the effects. Moreover, early warning signals based on accurate and timely labour market information and the resultant corrective actions can cushion the labour market to a certain extent from the negative effects of the economic downturn.

The ILO has initiated another global programme, the International Small Enterprise Programme (ISEP), to assist countries in strengthening their capabilities to promote SMEs through an enabling policy environment and through improved business development services. Through this programme, the ILO will also help strengthen institutional mechanisms to review and formulate policy. ILO assistance in management development and productivity improvement will have a greater thrust not only towards building comparative advantage in the countries in the region, but also towards improving conditions of work in SMEs.

The ILO has an important role to play in developing an orderly international migration regime in the region. In the first instance, this would call for promoting and assisting in the design of labour agreements among sending and receiving countries. Such agreements are the best guarantee of evolving practicable schemes for integrating labour markets in a way acceptable to all parties. Implemented by authorities on both sides, they should lead to a reduction in illegal migration and in the cost of migration for the individual migrant. This would also be an avenue for introducing ILO principles in a practical way, and preparing the ground for eventual acceptance of international standards on the equal treatment of foreign workers. An orderly regime of this type can ensure that absorbing economic shocks does not impose undue burdens on labour-sending countries or the migrant workers.

The ILO's Twelfth Asian Regional Meeting, held in December 1997, had called on the ILO to organize a follow-up meeting on social responses to the financial crisis in East and Southeast Asian countries. A High-Level Tripartite Meeting was accordingly organized by the ILO in Bangkok in April 1998 to discuss the social impact of the crisis and the reform policies adopted in its wake.

Other priorities for action included: strengthening active labour market policies; providing short-term relief to those workers identified as unemployed; collecting more information on vulnerable groups such as migrants and women workers; speeding up the process of eliminating child labour; extending social protection to informal sector workers; improving respect for freedom of association; and strengthening collective bargaining and workplace cooperation .

The ILO's follow-up to the High-Level Tripartite Meeting is focusing on three broad areas:

• alleviating poverty through generating employment: direct employment creation programmes, especially for displaced workers and women workers; active labour market programmes; policies on migrant workers; improving employment services; monitoring the deterioration in child labour;

Activities in these areas are being implemented through technical assistance programmes carried out in partnership with the countries affected, as well as through global and regional programmes.

To assess the impact of the crisis on child labour, the ILO's International Programme on the Elimination of Child Labour (IPEC) arranged three meetings in Thailand and one in Indonesia in March 1998. Participants included child labour experts, government officials and non-governmental organizations. Proposed measures included better targeting of poverty alleviation and employment creation programmes to vulnerable groups, especially female-headed households and those at risk of redundancy. Above all, access to education needs to be guaranteed to all children.

Employment policies

As part of the programme of the United Nations-Administrative Coordination Committee (UN-ACC) Task Force on Employment and Sustainable Livelihood, the ILO prepared a country employment policy review for Nepal. The report provided an analysis of current employment and poverty conditions, recent trends, the effects of past policies and the outlook for the future. On the basis of this analysis, it defined a set of policies and programmes required for rapid employment promotion, elimination of certain unacceptable features of the labour market (child labour, bonded labour, gender-based discrimination) and poverty alleviation in the country. The findings and recommendations of the report have served as inputs to Nepal's Ninth Plan. The policies and strategies recommended in the report have also influenced the work programmes of several international organizations, including UNDP, the World Bank and the ADB.

The ILO provided input to the Planning Commission of the Government of Pakistan during 1998 for the chapter on Employment and Manpower Planning in the country's Ninth Plan. The ILO input was based on specifically commissioned background studies and policy analysis work, including a comprehensive analysis of the changing structure of production and labour force, recent labour market trends, the impact of globalization and trade liberalization on the country's employment situation, the role of the private and public sectors in job creation, and the effects of macro-economic, sectoral and labour policies on employment. Based on the input to the Planning Commission and some further work, the ILO is currently preparing an employment strategy document for Pakistan. It would establish a policy framework for the social partners to meet the challenges of promoting employment growth, competitiveness and an adequate level of social protection.

ILO support was provided to the Indonesian Bureau of Manpower and Employment Affairs (BAPPENAS) on the preparation of the Employment Chapter of the Seventh Five Year Development Plan (REPELITA VII) of the Government of Indonesia. Financial assistance was given by UNDP through the Support for Policy and Programme Development.

Advisory services to China on urban employment promotion were also provided by the ILO. A direct follow-up to this exercise was the formulation of a project on urban employment promotion for the Ministry of Labour. The focus was on strengthening government programmes on labour market policies, retraining, and small enterprise development for the re-employment of redundant and unemployed workers.

In 1997, the ILO prepared a report on employment in the non-formal sector in Bangladesh. The report identified the major constraints faced by non-formal sector enterprises and made a critical assessment of the government policies and programmes implemented in the past to develop this sector and to provide support to non-formal sector workers. Areas requiring major interventions and future policy options were identified.

Labour market policies

In 1996, the ILO prepared a report on Economic Reforms and Labour Policies in India, dealing with three major areas of labour policy: wage policy; employment security; and methods of dealing with retrenchments in the organized sector. The report reviewed the nature and consequences of past policies, examined their relevance in the new context of a liberalized economy and proposed policy reforms. The report was successful in stimulating serious debate (which is still continuing) in academic and policy circles on critical issues of labour policy reform. The ideas developed in the report also influenced the work of the UNDP, the World Bank and the IMF in the country.

The ILO has made important contributions to enhancing the capacity of constituents in a number of countries to produce labour market information of better quality and coverage, with consequent impact on more effective monitoring of employment and labour market developments. For example, it has assisted the governments of Nepal and Viet Nam in carrying out labour force surveys (for the first time in the countries concerned).

Poverty alleviation and special employment schemes

Employment policies are also of critical importance for poverty alleviation. In the long run, achieving full employment is necessary for eliminating poverty. In the short run, special employment schemes have a major role to play in alleviating poverty and social exclusion. These ideas have motivated the ILO to assist countries in their efforts to alleviate poverty.

The ILO also actively participated in the UNDP's Collaborative Action Plan for Thailand (UNCAP) to support the Eighth National Economic and Social Development Plan, which has emphasized a people-centred development strategy aimed at reducing income disparities. Some of the ILO's proposals on poverty alleviation have been incorporated in the United Nations Ten Point Strategy for Poverty Alleviation in Thailand, presented to the Prime Minister of Thailand.

A multidisciplinary study on employment creation and poverty alleviation was conducted in South Sulawesi in Indonesia, in collaboration with the Ministry of Manpower. The process resulted in much greater awareness of the importance of effective monitoring of labour market information at the regional levels, not only for policy planning purposes at the central and regional levels but in order to respond effectively to the changing demands for skills at the regional and local levels. An immediate follow-up is an ongoing series of training workshops on labour market information systems for officials of the regional offices of the Ministry of Manpower, the Regional Development and Planning Board and the provincial statistical office.

Fighting social exclusion is crucial for poverty alleviation, and the ILO has carried out some activities with this objective in view. In Indonesia a study was prepared with a view to enabling government agencies to design more effective and efficient programmes for promoting equality of women, combating child labour, alleviating poverty and fighting social exclusion. In Fiji and Papua New Guinea, reports were prepared and national workshops were held to formulate action plans on more and better jobs for women. These activities, coupled with action programmes undertaken to enhance training and employment opportunities for women, strengthened national capacities to develop human resources in these countries.

Another socially excluded group, indigenous and tribal peoples, is being assisted by a major ILO programme in the Philippines. Activities include a study on indigenous knowledge systems and practices, projects on poverty alleviation and democratization of indigenous and tribal peoples, a community-based environmental impact assessment and a project on mechanisms for improving the management of ancestral domain of indigenous peoples, under INDISCO, an ILO global programme. Technical cooperation under INDISCO has resulted in changes in government policy and the regulatory environment, as well as greater awareness and skills among indigenous and tribal peoples to manage their resources in the most effective manner. Other INDISCO activities are being carried out in India, Thailand and Viet Nam.

Another area of work has been the provision of assistance to countries in implementing special employment schemes. The ILO/Japan intercountry project on Strategic Approaches towards Employment Promotion has rendered technical assistance to the governments of Bangladesh, Pakistan and China in three main strategic areas: community-based special employment creation programmes; local resource mobilization; and support to strengthen the role of the Ministry of Labour.

In Bangladesh, the Government institutionalized the Thana Employment Promotion Committees in ten pilot areas. These committees, comprising representatives of local government, NGOs and local banks, managed and operated the Thana Employment Funds, created by the project for sustaining and expanding employment opportunities. In Pakistan, a similar approach was used. A distinctive feature was the savings mobilization and loan matching scheme, which proved to be successful and was adopted by the Ministry of Labour in developing an employment promotion programme. In China, the special focus has been on sustainable approaches toward rural employment promotion.

ILO provided technical support to the labour-based infrastructure development activities which have played an important role in Cambodia and Lao PDR by providing short-term employment and building up crucial infrastructure to benefit the poor. These programmes have also succeeded to some extent in ensuring sustainability of project activities through training local government officials and private sector personnel and by institutionalizing Labour-Based Appropriate Technology (LBAT) in government programmes and national training curricula. Improved access to markets, water storage and expanded irrigation coverage for the rural population have been among the major benefits of the LBAT project. A socio-economic survey conducted to assess the impact of labour-based activities has also recorded a positive impact on employment generation.

Most of the ILO's actions in the area of social dialogue in the region since 1995 revolve around the need to improve institutional capacity. As such, the focus has clearly been on building and strengthening the channels through which social dialogue can occur. Three main areas of ILO assistance have been: (1) policy advice on the legislative framework for dialogue; (2) strengthening the process of social dialogue through institution-building; and (3) assistance in improving the content of dialogue.

With regard to strengthening the process of social dialogue, several ILO programmes have sought to promote the process of tripartite and bipartite social dialogue. The ILO's Asian-Pacific Project on Tripartism (APPOT) had sponsored a range of activities relating to the development of tripartism in the region. Now in its second phase, APPOT is focusing on the growth of tripartism in South Asia, as well as in Viet Nam. Seminars organized in several economies (Hong Kong [China], Thailand) have offered constituents an exchange of information on how tripartism functions and can best be promoted. A need for training in conducting collective bargaining and tripartism is also felt. The ILO has developed basic training materials in the form of a booklet series for improving negotiating skills, workplace cooperation and tripartism, which it has used in training courses in the region. These booklets have been translated into Thai, Nepalese, Bahasa Indonesia, Vietnamese and Mongolian, with plans for translation into other regional languages. Training workshops focusing on techniques of collective bargaining have been conducted in China, Viet Nam, Lao PDR and Cambodia, and in tripartite processes in the latter two countries. A regional seminar held in March 1997 brought together tripartite delegations from 21 countries for dialogue on workplace cooperation and its promotion.

An area of ILO involvement of major importance in strengthening the process of social dialogue has been its technical advice on systems of dispute resolution. The ILO has strengthened conciliation and labour inspection skills in Bangladesh, Nepal, Pakistan, and Sri Lanka. Advisory services were also provided to upgrade labour court administration in South Asian countries. The training of conciliators, arbitrators and labour court judges, as well as labour inspectors who can play a key role in preventing disputes has also been a major activity in the transition and newly industrializing countries (e.g. China, Malaysia, Thailand, Viet Nam).

On shaping the content of social dialogue, the ILO convened a High-Level Tripartite Meeting on the Asian financial crisis, as mentioned above. The meeting not only encouraged comparative policy dialogue on alternatives to retrenchment, but provided a forum for discussion of the social consequences of the crisis with the international financial institutions. The current (fourth) phase of a Japan-funded project on industrial relations has launched a series of activities on the implications of globalization for national industrial relations systems. The ILO has provided technical support to trade unions in Pakistan in preparation for a government-initiated dialogue on privatization and its economic and social consequences.

A regional technical assistance project on cooperation in employment promotion and training, funded by the ADB, covering six countries of the Greater Mekong Subregion (GMS) was launched in late 1996. The project aimed at establishing the groundwork for a subregional labour information network, evolving uniform training and certification standards for key occupations, and developing accreditation criteria and systems as a means of identifying training institutions.

Solid groundwork has been laid by the project for employment promotion, human resource development and subregional collaboration, especially through the agreement reached at the senior officials meeting for the formal establishment of a subregional labour information network as specified in the action plan. The meeting also approved the draft criteria for verifying the sustainability of nominated training institutions to be designated as subregional centres of excellence in particular areas. The ministerial-level meeting endorsed, among other things, the adoption of GMS evaluation/accreditation criteria for technical and vocational education and training, and the development of a network of centres for excellence.

The ILO has also assisted the national authorities in improving training delivery. In China, advisory services were provided in reviewing the long-term development of modular training systems. In the Philippines, assistance is being provided in skills upgrading for informal sector operators. A pilot project for the upgrading of skills of food vendors in the informal sector, launched earlier, has paved the way for a more comprehensive intervention which is scheduled to commence in the first quarter of 1999. In Fiji and Papua New Guinea, the ILO gave assistance in carrying out pilot projects for skills upgrading for women in the informal sector in 1997, with a view to enhancing their training and employment opportunities.

Skills testing and certification are an important element of vocational training systems, ensuring credibility of the training provided and thus enhancing employability. In the face of mounting unemployment exacerbated by the Asian financial crisis, much more attention is now being paid by countries in the region to setting up effective competency-based skills testing and certification systems. The ILO is helping Indonesia develop the necessary framework for such a system. Similar assistance was earlier provided to Sri Lanka.

The focus of the ILO's technical advisory services in this area has been assisting with enterprise restructuring, improving the productivity and competitiveness of SMEs, and making the micro and small enterprise sector more effective in creating quality employment opportunities. Training materials developed under the SYB/IYB programme (Start Your Business and Improve Your Business, also known as SIYB) have been adapted and implemented in such countries as Fiji, India, Papua New Guinea and the Philippines, with notable results. The ILO has also provided support for the review and formulation of SME policies in Fiji, Indonesia, Papua New Guinea, and the Philippines. In Sri Lanka, it is assisting the Government in preparing a Master Plan for Rural Industries.

Experience has shown that an integrated approach is essential to ensure programme impact and adequate coordination between different components such as policy and regulatory support, business training, development activities, and access to credit and finance. This concern for coherence and coordination led the ILO in 1998 to launch a global programme, the International Small Enterprise Programme (ISEP), which is being implemented through the ILO's network of multidisciplinary advisory teams. In the cooperatives sector, a range of programmes have been developed to help create a conducive legal environment for cooperative development, promote networking among cooperatives, and develop cooperative organizations for socially excluded groups in countries such as India, the Philippines and Viet Nam.

The ILO has also been concerned about access by SMEs to productive resources (skills, technology, credit, raw materials, market, information, etc.). The availability of these resources is crucial for their success and for achieving competitiveness. In 1998, the ILO prepared a report on business development services for SMEs, with preliminary guidelines for donor-funded interventions for small enterprise development. This report highlighted significant lessons and best practices drawn from many years of practical experience in providing technical assistance on SME development.

The issue of job creation through enterprise promotion is being increasingly addressed in terms of improving the quality of such jobs. Through a regional programme on work improvement and enterprise development (WIDE), the ILO has developed a training manual (I-WEB: Improve your Work Environment and Business) through pilot testing in Malaysia, Nepal, and the Philippines during 1996-97. The major thrust of this pilot programme was on improving the quality of work in small enterprises, by placing emphasis on both the quality of working conditions and the quality of small business management. Under the programme, the capacity of government agencies, and of several local partner organizations, was strengthened, and a number of entrepreneurs and trainers were trained.

The ILO has also been actively promoting the greater participation of women in economic activities. The technical assistance provided by the ILO in the fields of Women's Entrepreneurship Development (WED) and Economic Empowerment of Women (EEW) has been in line with specific recommendations of the Plan of Action which emerged from the 1995 Beijing Conference on Women. Within the region, a project to promote entrepreneurship among women in small and cottage industries was implemented in India, Nepal, the Philippines, Sri Lanka and Thailand. Technical assistance was provided to 15 national organizations in these five countries to enable them to create a regional network and provide greater support to women entrepreneur target groups. Several national organizations involved in women's self-employment activities have also received assistance under the programme.

As part of a special Action Programme, the ILO initiated extensive research on the gender dimensions of social funds, based on experiences in Asia, Latin America and Africa during the past decade. Studies examined strategies to promote women's participation in social fund activities, such as emergency employment programmes. A technical brainstorming workshop was organized in 1997 to further explore the integration of gender concerns into the policies and operation of social funds.

ILO action on women migrant workers has included programmes aimed at formulating and implementing country-level activities to improve the welfare and working conditions of women migrants from Indonesia and the Philippines.

More and Better Jobs for Women, a new global ILO Action Programme as a follow-up to the Fourth World Conference on Women and the Programme of Action of the World Summit for Social Development, has been launched in Indonesia, Nepal and Pakistan. Its aim is to assist member States to formulate national action plans to improve the quantity and quality of women's employment. In order to strengthen the ILO's capacity to support its constituents in improving the situation of women workers in the crisis-affected countries, the ILO and the Asian Institute of Technology are carrying out a joint research project on the gender dimension of the crisis in East and South-East Asia. Studies on Indonesia, the Republic of Korea, the Philippines, Malaysia and Thailand are being prepared.

ILO has been providing technical advisory services relating to the ratification and application of the employment policy and fundamental human rights Conventions (see Chapter 4). In the context of the Asian crisis, mention has already been made of the Republic of Korea's national social accord. A tripartite seminar on Conventions Nos. 29, 105, 111 and 138 conducted soon afterwards intensified the dialogue with the ILO, with a view to eliminating remaining obstacles and achieving ratification of those Conventions with which law and practice were found to be largely compatible. In August 1998, the ILO sent a direct contacts mission to Indonesia to assist the Government in aligning its industrial relations legislation with relevant standards, in particular Convention No. 98 and the newly ratified Convention No. 87. Following this mission, the Government recommended postponing the entry into force of the new Law on Manpower Affairs, initially foreseen for 1 October 1998, in order to benefit from ILO assistance in strengthening the text. In November 1997, the ILO helped making history by convening the first national tripartite meeting of the social partners in Thailand.

In the Philippines a dialogue with legislators in 1996, followed up in 1997 by a national consultation on Convention No. 138, resulted in ratification of that Convention in 1998. In 1996-97 seminar-type activities were undertaken in each of the transition economies, with the exception of Myanmar, resulting, for example, in China initiating the procedure for ratifying Convention No. 138. In India, the Government's commitment towards ratifying Convention No. 105 is actively supported by specific advice provided by the ILO on the implications of ratification for present legislation.