Improving productivity key challenge

Ramani KANGARAARACHCHI in Bangkok

Improving productivity is a key challenge in Asia and the Pacific. Therefore it is necessary to ensure that productivity leads to higher wages and better working conditions to overcome this challenge, World Bank Economist Kee Beom Kim said.

Addressing Asian region journalists on international labour standards and economic social outcomes" at the Bangkok ILO office, he said according to World Bank Development Indicators, the growth in output per worker, average annual change between 2000-2009 in East Asia stands at 7.8 percent while it is only 4 percent in Asia and the Pacific.

He said higher wages and working time standards can translate into better and more satisfied workers and lower turnover of staff.

Another challenge is that most workers work under poor quality conditions in low paid jobs with inadequate social protection and voice. The percentage of vulnerable employment in 2008 in the Asia Pacific stood around 60 percent.

Social protection can encourage innovation while facilitating labour market flexibility but relatively little is spent on social protection in Asia and the Pacific. When the Western Europe spends 26.7 percent of its GDP on total public social protection, Asia and the Pacific spends only 5.6 percent of its GDP on the same, he said.

Kim said that investment in vocational training and on the job training leads to a better trained work force , higher productivity and higher employment levels.

He said that effective markets and institutions are critical to maximize their economic and social outcome however, the central problem in less developed economies is not that standards are unaffordable but rather than institutional weaknesses make it difficult to enforce them.