1. Decent Work for All ASIAN DECENT WORK DECADE 2006-2015 An overview of Labour Markets in A sia, and challenges in Cambodia Sukti Dasgupta ILO

2. Asia – in transition…many paradoxes… Asia the assumed new global power – yet also the region of extreme poverty, hunger, war, violence and discriminations – and also natural disasters.. Still largely rural/agricultural – but share of agri shrinking, and services growing rapidly.. Most still labour surplus though some, such as Japan, Korea, Malaysia, Singapore facing labour shortages Still largely young, but aging becoming an issue in some countries. Working age population growing in some countries but falling in others Sends as well as receives migrants. Asia growing, remarkably, but most employment being generated in the low income/ low productivity sectors. Growth not producing adequate good quality employment.

3. The economic crisis has sharpened the employment challenge As exports and growth declined, employment quantity and quality affected –Already high youth employment reached record levels –Vulnerable employment rising But macro economic stability pre crisis. Allowed swift policy action in many countries. However, raised questions about the sustainability of the export- led model of development

4. But economic (GDP) recovery strong in developing Asia… Source: ILO, Asia-Pacific Labour Market Update (October 2010), based on OECD and official national sources. Growth in GDP (%)

5. Employment growth has also picked up… Source: ILO, Asia-Pacific Labour Market Update (October 2010), based on national statistical offices. Growth in employment (%)

6. However, much of the employment is likely in the informal economy, with poor working condtions… Note: Vulnerable employment is defined as own-account workers and contributing family workers. Source: ILO, Asia-Pacific Labour Market Update (October 2010), based on national statistical offices. Change in wage and vulnerable employment, most recent period in 2010 (%, year-on-year)

7. Share of employment in services has risen… Source: ILO, Labour and Social Trends in ASEAN 2010: Sustaining recovery and development through decent work (2010). Share of employment in industry and services (%) …most likely in less productive (lower paid) services jobs

8. Manufacturing employment has also not returned to pre-crisis levels in most Asian countries Source: ILO, Regional Office for Asia and the Pacific, based on national official sources. Change in manufacturing employment (%, year-on-year)

9. So labour market challenges still remain Wages in particular have not recovered Developing countries - unemployment has fallen but issues about quality of jobs remains:  850 million working poor (US$2/Day), accounting for 70% of world’s working poor  1.1 billion workers in vulnerable employment (60% of region’s workers) …and not necessarily in direction that would support rebalancing

10. Policy implication (I): Growth in productive jobs key to balanced growth… …renewed commitment to full and productive employment as core macroeconomic goal Annual average growth in GDP and employment (%) GDP growth (2001-08) Employment growth (2001-08) China10.50.9 India7.02.4 Indonesia5.41.7 Japan1.4-0.1 Korea, Rep. of4.41.4 Malaysia5.71.8 Mongolia8.23.2 Pakistan5.33.7 Philippines5.32.8 Sri Lanka6.01.7 Thailand5.21.7 Viet Nam7.62.0 Sources: IMF: World Economic Outlook database; ILO, LABORSTA.

11. Policy implication (II): Growth in incomes/wages needed for balanced growth… Change in wage share in GDP (%) Source: IILS, World of Work Report 2010: From one crisis to the next? (ILO, 2010).

12. Policy implication (III): Strengthening the social protection floor crucial… Source: ILO SECSOC estimates …access to healthcare, income security for elderly and persons with disabilities, child benefits and social assistance for poor and unemployed

13. Policy implication (IV): Sustaining/improving labour productivity critical… Annual growth in output per worker (%) 16.8% 10.4% 12.7% 16.6% 83.3% Subregion as share of North America and EU Source: ILO, Trends Econometric Models, April 2010. …particularly given possible shifts into services

14. …education, skills and on-the-job training are important drivers of productivity growth Source: ILO, Key Indicators of the Labour Market (KILM), 6 th Edition. …as are working conditions, rights at work and social dialogue

15. Rebalancing in Asia… Greater emphasis on domestic consumption or investment Greater emphasis on intra-regional trade / integration Greater emphasis on labour productivity …all will require growth in jobs and incomes

16. Highlights of Cambodia’s labour market Since no LFS since 2001, data used from Population census 2008, (NIS 2010)

17. Socio Economic Trends- many significant achievements, but remaining challenges Prior to economic crisis, robust economic growth, significant developments on many quarters. Poverty rates declining but inequality rising. Women in LF increased – gender gap in LF declining Employment growth rate 3.6 percent, and open unemployment low (1.6%), but most jobs (82.5 % own account work and unpaid family work). Concern with ‘quality’ of employment. Economic crisis highlights the need for comprehensive social protection, as informal coping mechanisms used not adequate

18. Garments have been the leading sector, but most affected by economic crisis

19. Poverty declining but high, especially in rural areas

20. Employment structure changing, but agriculture still largest employer Share of agriculture in employment falling but still significant – 73.3 %. Seems more difficult for women(77.8) to leave agriculture than for men (68.7)

21. Working age population expanding fastest Decreasing age dependency About 22.3 percent of population between 15 – 24 years age YOUTH. A third below 14 – will soon join labour market. Population more literate than before- but gender gap in education CHALLENGES FOR (DECENT) JOB CREATION FOR EXPANDING LABOUR FORCE Demographic characteristics imply greater need for good jobs

22. Cambodia- pre-crisis labour market challenges enhanced by crisis Rebalancing growth – between export orientation and domestic market – structural change, narrow economic base Centralising employment outcomes in macroeconomic policies. the ‘economic’ and the ‘social’ still lack policy coherence. limited fiscal space Improve education and skills - move away from low-productivity production Tackle labour market discriminations – women’s unemployment higher and more women in vulnerable employment Large share in vulnerable employment but no social protection mechanisms Weak labour market information systems Weak Institutions for effective social dialogue

23. Need for an Employment Strategy MOLVT has requested ILO support for developing an Employment Strategy to address these concerns, within the framework of the NSDP. The ES would need to take care of issues on the DEMAND SIDE of the labour market – create more quality jobs – broad based development SUPPLY SIDE – improve quality of jobs and workers, and access to social protection MATCHING DEMAND AND SUPPLY Setting up appropriate INSTITUTIONS

24. Thank you For more information, please contact Sukti Dasgupta at dasgupta@ilo.org ASIAN DECENT WORK DECADE 2006-2015 Decent Work for All