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ILO forecasts slow jobs recovery in ASEAN region

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Upward trend in COVID-19 cases and slow vaccine roll out likely to prolong the labour market crisis and hamper recovery.

Working hours in the ASEAN region are projected to only partially recover in 2021 and 2022 according to new research by the International Labour Organization (ILO).

COVID-19 and the ASEAN labour market: Impact and policy response highlights the heavy impact of the pandemic on ASEAN economies and looks at possible recovery scenarios. In none of the scenarios, taking into consideration mobility restrictions, progress on vaccinations and the pace of economy recovery, are working hours projected to fully recover by 2022. In 2021, ASEAN is expected to see losses in working hours of 7.4 per cent in the baseline scenario and 7.0 per cent and 7.9 per cent in the optimistic and pessimistic scenarios, respectively, compared to pre-pandemic levels.

The region recorded working-hour losses of 6.1 per cent in the first quarter of 2021 and 6.2 per cent in the second quarter. In the second half of 2021, labour market conditions are expected to deteriorate further due to the ongoing wave of the COVID-19 pandemic.

“The crisis has laid bare the vulnerabilities of the economies and labour markets in the region. With the situation likely to persist for some time, the urgency grows for ASEAN countries to accelerate the policies and programmes that will boost the resilience of enterprises, workers and households and set stronger foundations for decent work for all,” said Chihoko Asada-Miyakawa, ILO’s Assistant Director-General and Regional Director for Asia and the Pacific.

The brief highlights that in 2020, there were 10.6 million fewer workers in employment in the region than what would have been expected in the absence of the pandemic. The region recorded working-hour losses of 8.4 per cent in 2020, equivalent to the working time of about 24 million full-time workers while labour income fell by 7.8 per cent.

The Philippines saw the largest working-hour losses among ASEAN countries in 2020 with an annual decrease of 13.6 per cent. In contrast, working hours in countries like Brunei Darussalam, Lao People’s Democratic Republic and Thailand saw hours worked drop by 4.3 to 4.5 per cent. Women and young workers were among the groups of workers most impacted by job losses.

ASEAN economies and labour markets have been impacted through various channels by the pandemic, including lockdown measures implemented by authorities to curb the spread of the virus, the dramatic decline in tourism, the decrease in domestic consumption as well as impacts through global supply chains.

According to the brief, ASEAN countries have collectively allocated nearly 16 per cent of GDP on the fiscal stimulus response as of the end of May 2021. However, further policy action in the realm of social protection, enterprise support and labour protections will be needed to ensure a human-centred recovery from the crisis in the ASEAN region.

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