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Bangkok  December 1997

Twelfth Asian Regional Meeting

Report of the Director-General



Finding the means to sustain economic dynamism

Dynamism and diversity continue to characterize the employment and poverty situation in Asia. Although several countries registered a slowdown in growth and exports during 1996, the region as a whole is expected to achieve relatively high growth over the next few years with, however, substantial variations among countries and sectors.

The region is now irrevocably committed to globalization and economic liberalization. Employment will be increasingly affected by the measures countries take to expand export markets and to restructure their economies according to shifts in comparative advantage. Technological change and obsolescence are integral parts of this pro-cess. Protectionism may appear an easier alternative to rapid diver-sification, but such short-term palliatives will yield no better results than they did when protectionism was the dominant development strategy in the guise of import-substituting industrialization.

Many countries of the region face even more drastic shifts in employment through the continuing process of liberalization in the hope of increasing growth. Growth has indeed been forthcoming -- in China, India, Jordan and Viet Nam, for example -- but not without short-run pain, as witnessed by massive retrenchments from the state sector in Mongolia, Viet Nam and Yemen, and a halt to wage employment expansion in India and Sri Lanka. China has so far avoided such massive upheavals, but only at the expense of continuing subsidies to the state sector. In the meantime, policies are being instituted to re-equip surplus labour for more dynamic jobs and to improve social protection. Similar measures are called for in other liberalizing countries to avoid increasing unemployment and poverty during the reform process.

The diversity of the region requires that employment policies be country-specific. The more advanced countries have seen con-siderable improvement in their unemployment and poverty situation. Some have even become destinations for migrant labour from less prosperous neighbours. Ironically, the advanced countries face parti-cularly complex employment problems because of increasing com-petition in their pioneering industries from the late starters. They have to make the transition to skill-intensive and knowledge-based industries, and this requires continual upgrading of their labour force.

Other Asian countries still face massive problems of underemployment and poverty, especially in rural areas. Agriculture needs to be specifically targeted through public investment. Agricultural growth is imperative not only because of its direct impact on employment and poverty, but also because it helps to slow down rural-urban migration. At the same time, non-agricultural growth has to be increased by eliminating the remaining labour market rigidities which impede employment growth in the modern sector.

The situation of women workers in the region has improved somewhat in terms of employment opportunities, status and working conditions, but they still face numerous forms of discrimination. Their share in the labour force has increased modestly, or even declined, and the gap between women's and men's wages is still enormous in some countries. While openings for women in the formal sector have increased the prospects for many, most female workers are still found in low-skilled and insecure jobs. Women are overrepresented among groups that are usually excluded from labour legislation: casual, home-based and informal sector workers, and undocumented migrant workers. Finally, women still carry the double burden of work and family responsibilities, and are poorly represented at decision-making levels in enterprises, as well as in governments, employers' organizations and trade unions.

Despite the wide diversity in country experiences in the Asian region, a strong message emerges. The best assurance of sustained growth is the most effective use of the country's labour resources -- by investing in human capital, by promoting innovation and enterprise, by removing incentives that discriminate against the use of labour and by targeting interventions to assist the vulnerable and extreme poor.

Combining growth with social justice

Economic growth does not lead automatically to social justice. The increasingly unequal distribution of income in many countries is only one sign of this. Industrial accidents often result from rapidly expanded production; exploitation of migrant and child labour is encouraged by shortages of workers; retrenchment follows structural reforms. Dynamism means opportunities for the improvement of the lot of ordinary workers, but these opportunities are not always seized.

The new challenges facing the region are nowhere more apparent than in the field of industrial relations. Many of the building blocks of traditional systems are crumbling under the combined action of legislative reform, privatization, new management practices and a better-informed workforce with heightened expectations. In modern and successful firms, especially those with international ownership or markets, human resources are increasingly seen as a key to more effective performance. This understanding, properly applied, can mean real improvements in workers' influence and conditions. There is, however, an important danger signal: increasing insistence that workers' collective rights should be curtailed, and even that unions should be avoided. The idea that workers' aspirations should be bottled up in this way is a violation of fundamental ILO Conventions, and a source of legitimate frustration and unhealthy disputes. It is unacceptable to present such ideas as being in the national interest.

The vast majority of workers in the region fall outside the formal industrial relations system. It is essential to find more effective ways to represent the interests of these workers. The ILO's tripartite constituents, and in particular the unions, have a special responsibility in this regard, and deserve to be strengthened in their role.

Especially when workers are poorly organized, labour legislation and labour administration must provide essential minimum guarantees. In many fields the need for state intervention is unchallenged -- for example, as concerns occupational safety and health -- but there is little evidence that resources available to labour administrations have followed the growth in the number of workers who need protection, the diversity of risks to which they are exposed, and the practical difficulties of both the supporting and enforcement roles of the inspectorates.

Although working conditions and occupational safety and health are regulated in many countries, implementation is frequently weak and most workers are not covered by legislation. There is a disparity between workers in large modern enterprises, where conditions generally exceed minimum standards, and the millions working long hours in small enterprises and the informal sector, with minimal facilities, and often in hazardous and unhealthy conditions. The result is unacceptable accident rates and levels of occupational diseases. Groups such as migrant workers, minorities and persons with disabilities are especially affected.

Minimum standards on wages and other conditions of employment are more controversial. The worsening distribution of income and the growing problems in the small-scale and informal sectors are indications that much needs to be done, but regulatory action is often seen as an impediment to employment and growth. Here the challenge is to find means to improve conditions that help the workers who are most in need, and that have no unintended impacts on employment or growth.

Social security in the region is generally undeveloped, except in the public sector and large enterprises in the formal sector. Now is the time to extend coverage to smaller enterprises, and to explore the possibilities of protection for informal sector workers and the self-employed. Economies in transition have experienced a reduction of social protection, especially for public sector employees who have been laid off. Replacement incomes in old age should be introduced and wider access to proper health care should be made available. All this calls for financial and administrative reform.

The situation regarding child labour is both disturbing and encouraging. While a decrease in poverty and better education in many countries have led to visible results in reducing its incidence, the region still has the largest concentration of child labour in the world. There has been an apparent increase in the number of children in abhorrent forms of work -- hazardous and unhealthy occupations, prostitution and trafficking, and slave-like practices. Yet some progress is being made. More commitment by governments to the elimination and reduction of child labour, a better legal framework and greater support from employers, trade unions and NGOs have meant a proliferation of policies and programmes to combat child labour, often with the support of IPEC. International pressure has played a large part, and more employers are coming to realize that economic development is hindered by the continuation of child labour.

The growing consensus that fundamental ILO Conventions should guide the action of member States meets an especially strong test in Asia, where ratification records are often poor. Many have argued that application of these standards should be strengthened in conjunction with a de-linking of trade and labour standards. This is an important argument, but it remains to be seen if there will be a stronger commitment to ratification and application.

The Asian Regional Meeting will provide an opportunity to continue the discussion of the issues raised in the Director-General's Report to the 85th Session of the International Labour Conference, in particular the universal ratification of the seven fundamental Conventions and the adoption of a solemn Declaration on fundamental rights.

The role of the ILO

The ILO's programme in Asia is carried out in the framework of the policies and priorities established for the ILO as a whole. Many of these policies are being reformed in ways that are important to action at the regional and national levels. Improvements in the standard-setting process and strengthening of the supervisory machinery, for example, will reinvigorate the ILO's role as a normative institution in all regions. Promotion of technical cooperation, for which there are major new global initiatives -- on child labour, on more and better jobs for women, on occupational safety and health -- has an obvious reverberation in all the developing regions, including Asia. Technical and policy work at ILO Headquarters will be an important part of providing better services in the field. While these developments are not covered in detail in this report, it is important to keep in mind the role of global policy and action, and in particular the leading role of the ILO's tripartite organs.

Since the Eleventh Asian Regional Conference in 1991, the ILO has introduced major structural reforms. We have launched the active partnership policy (APP), established multidisciplinary advisory teams, reinforced the role of ILO Offices, and begun the process of jointly deciding on priorities with our constituents through country objectives. The Asian Regional Meeting will provide an opportunity to review the implementation of the APP, and will thus make an important contribution to the evaluation currently being carried out by the Governing Body.

The ILO's efforts to make itself more relevant and more effective at the country level are echoed in a number of plans for the reform of the United Nations system. The ILO already faces a much more competitive environment for technical cooperation funding. Moreover, we are under increasing pressure to coordinate operational activities within a UNDP-led framework, and even to subordinate our activities to larger United Nations objectives. Since the ILO's tripartite structure is unique within the United Nations system, ILO concerns risk being marginalized unless there is a strong tripartite stand on the modalities for ILO work in the field.

While the ILO is a universal organization, with universal standards and a mandate that covers all labour issues, it must adapt its practical work to the realities found at the regional, subregional, national and even local level. The Asian Regional Meeting provides the most prominent opportunity to do so in Asia.

Suggested points for discussion

Updated by VC. Approved by RH. Last update: 26 January 2000.