Sri Lanka Business News | Online edition of Daily News

Asia-Pacific countries discuss responses to global economic crisis

The Ministries of labour and finance, senior UN, World Bank and government officials, workers and employers representatives from more than 10 Asia and the Pacific countries met in Manila to discuss effective responses to the current economic crisis.

Forum delegates reviewed a new International Labour Organization (ILO) report that gives a preliminary assessment of the impact of the crisis in Asia and the Pacific, reviews countries' responses, highlights policy options for effectively tackling the crisis and creating a sustainable development path for the future.

The High-level regional forum, "Responding to the Economic Crisis - Coherent Policies for Growth, Employment and Decent Work in Asia and the Pacific", was convened by the ILO in collaboration with the Asian Development Bank and the Department of Labour and Employment of the Philippines.

The topics discussed included the impact of the crisis on economies, vulnerable people, and societies. Gender issues, social protection, the creation of a social floor to cushion the impact, strengthening policy coherence and lessons from the previous crisis, will also be discussed.

"There is an urgent need to focus on how this crisis is affecting ordinary working people," said ILO Regional Director for Asia and the Pacific, Sachiko Yamamoto. "If policies are to be effective then job creation and protection must be at the core of national crisis response plans and the potential rise in working poverty must be addressed. This forum is an important opportunity to review the effects of different crisis-response policies and consider which ones will position countries best for a swift, sustainable and equitable recovery." The report, The fallout in Asia: Assessing labour market impacts and national policy responses to the global financial crisis, has been prepared by the ILO's Regional Office for Asia and the Pacific, which is based in Bangkok.

In reviewing existing crisis response measures the report said that just as important as the size of national rescue packages is the need to focus fiscal measures on areas that have the largest potential multiplier effect.

Another important consideration is whether they enhance economies' medium-term growth potential - so that increased fiscal spending now will be covered by higher future revenues, without the need for prohibitive tax increases.

Maximizing the employment impact of stimulus packages and maintaining household incomes and purchasing power should be a central goal, the report said. Packages should be capable of being rolled out rapidly and have a significant impact on employment almost immediately.

Measures that are likely to meet these criteria and have a strong multiplier effect include:

* Expanding already-approved public spending projects (e.g. infrastructure, housing, health, education).

* Scaling up existing social transfers (e.g. unemployment benefit systems, welfare payments to low income families, other poverty reduction programs) will help protect the poor and most vulnerable.

* Programs to help poor families keep their children in school.

* Fiscal measures that target credit-constrained businesses; particularly SMEs, labour-intensive industries or those that don't rely on imports.

While job insecurity is clearly on the rise the report also said there are some grounds for optimism in the region. Many countries enjoy considerable fiscal room for countercyclical policy measures to address the crisis.

Asia's developing economies, which are faring far better than the region's industrialized economies, are expected to grow by 5.5 per cent in 2009. When the recovery begins many Asian economies may bounce back quickly, due to their policies and solid underlying fundamentals.