Growth will pick up despite global crisis - ILO Labour Economist
Ramani Kangaraarachchi
The impact of the global crisis will be severe this year in Asia and
the situation will be very uncertain in many aspects.
However, growth will pick up gradually as the fundamental strengths
still exist, Labour Economist, ILO Bangkok Steven Kapsos told a workshop
on “The Fallout in Asia : Assessing labour market impacts and national
policy responses to the global financial crisis,” organized by the ILO
Colombo.
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Tine Staermose and Steven Kapsos Pic by Saliya Rupasinghe |
He said that the role of social dialogue is vital in finding
negotiated solutions to the crisis as it has increased insecurities
regarding jobs, wages and working conditions where industrial disputes
are on the rise in some countries.
He said that strong tripartite cooperation is essential to ensure
that social progress is not undermined and many social partners have
expressed a desire to share good practices of dialogue at enterprise
level to address workplace disputes.
Kapsos said that there had been a dramatic drop in the GDP growth in
Singapore, Korea and Indonesia at the end of 2008 and the outlook for
2009 will be negative. The GDP growth in Sri Lanka will drop to 3.2
compared to 5.7 in the previous year, he said.
Referring to the declining demand in industrialized economies due to
the crisis, he said total world trade volumes are expected to contract
this year for the first time since 1982. Industrial production is
expected to drop sharply and tourism revenue is also expected to be at
risk.
The foreign direct investment to developing countries is projected to
shrink by more than 30 per cent in 2009. In Sri Lanka FDI accounts for
only around seven per cent of capital formation similar to China, India
and Indonesia.
Kapsos said that the labour market will be affected due to finance
sector job losses, and export oriented manufacturing such as
electronics, garments and automobile assembly will be hard hit,
resulting in reverse internal migration.
The most vulnerable groups are small and medium size enterprises.
Contract and migrant workers will be the first to be affected and
eventually women and youth. Increasing child labour is expected due to
the rising poverty line.
Elaborating on policy coherence needed to face the challenge, he said
that an effective response requires coherent policies across provincial
and national governments at national level.
ILO Director Colombo Tine Staermose chaired the workshop. |
