South Asia shows significant progress in productivity
Tuesday, 4 September 2007
BANGKOK, Sept 3 (ILO News): South Asia's productivity levels have risen by around 50 per cent in the last decade and the share of working poverty has "decreased tremendously", the International Labour Office (ILO) said in a new report published today.
The ILO report, "Key Indicators of the Labour Market (KILM), fifth Edition" shows a rapid increase of productivity - measured as output per person employed - in South Asia, from US$5,418 in 1996 to US$7,998 in 2006. However, despite this South Asia's workers still only produce one eighth of what a developed economy worker does.
The United States still leads the world by far in labour productivity. Elsewhere in the Asian region, East Asia's workers now produce twice as much as they did 10 years ago, the most considerable productivity increases in the world. But this is still only one fifth of what a worker in the developed economies produces. In South-East Asia and the Pacific labour productivity "was stagnant and much slower than other regions" with an average annual increase of only 1.6 per cent between 1996 and 2006 and workers in the region produced only a seventh of their developed economy counterparts.
Increases in productivity are mainly the result of companies combining capital, labour and technology better. A lack of investment in people (training and skills), equipment and technology can lead to an underutilization of the productive potential of labour and so perpetuate poverty. The report found a positive trend in the amount of working poverty in South Asia, which fell from 56.6 per cent in 1996 to 33.5 per cent in 2006. However the proportion of vulnerable employment - when a worker is at risk of falling back into poverty - only decreased slightly, from 81.4 per cent to 78.2 per cent. Often these people work in the informal economy and carry a higher risk of being without social security or a voice at work.
The report also found that half the workers in South Asia and South East Asia and the Pacific still work in agriculture. Many work long hours - Bangladesh and Sri Lanka are among six Asian countries where annual hours worked surpassed 2,200.
"Hundreds of millions of women and men are working hard and long but without the conditions they need to lift themselves and their families out of poverty; they risk falling deeper into poverty. Releasing their underutilized capacities by raising their productive potential must be at the top of the international development agenda," said ILO Director-General Juan Somavia.
According to the KILM, 1.5 billion people in the world - or one-third of the working-age population - are "potentially underutilized". This new estimate of labour underutilization is comprised of the 195.7 million unemployed people in the world and nearly 1.3 billion working poor who live with their families on less than US$ 2 per day per person. Whereas the unemployed want to work but lack the opportunity to do so, the working poor work but do not earn enough to escape poverty.
In addition to the underutilized labour force a large number of people - about one-third of the working-age population worldwide - are not participating in labour markets at all. For the last 10 years this inactivity rate has remained much higher for women than for men, with only two out of ten men of working age inactive compared to five out of 10 women. Within Asia the situation varies greatly; in South Asia the gender gap is more than 45 percentage points while in East Asia it is less than 13 per cent. This shows that the potential of the female labour force remains untapped.
The ILO report, "Key Indicators of the Labour Market (KILM), fifth Edition" shows a rapid increase of productivity - measured as output per person employed - in South Asia, from US$5,418 in 1996 to US$7,998 in 2006. However, despite this South Asia's workers still only produce one eighth of what a developed economy worker does.
The United States still leads the world by far in labour productivity. Elsewhere in the Asian region, East Asia's workers now produce twice as much as they did 10 years ago, the most considerable productivity increases in the world. But this is still only one fifth of what a worker in the developed economies produces. In South-East Asia and the Pacific labour productivity "was stagnant and much slower than other regions" with an average annual increase of only 1.6 per cent between 1996 and 2006 and workers in the region produced only a seventh of their developed economy counterparts.
Increases in productivity are mainly the result of companies combining capital, labour and technology better. A lack of investment in people (training and skills), equipment and technology can lead to an underutilization of the productive potential of labour and so perpetuate poverty. The report found a positive trend in the amount of working poverty in South Asia, which fell from 56.6 per cent in 1996 to 33.5 per cent in 2006. However the proportion of vulnerable employment - when a worker is at risk of falling back into poverty - only decreased slightly, from 81.4 per cent to 78.2 per cent. Often these people work in the informal economy and carry a higher risk of being without social security or a voice at work.
The report also found that half the workers in South Asia and South East Asia and the Pacific still work in agriculture. Many work long hours - Bangladesh and Sri Lanka are among six Asian countries where annual hours worked surpassed 2,200.
"Hundreds of millions of women and men are working hard and long but without the conditions they need to lift themselves and their families out of poverty; they risk falling deeper into poverty. Releasing their underutilized capacities by raising their productive potential must be at the top of the international development agenda," said ILO Director-General Juan Somavia.
According to the KILM, 1.5 billion people in the world - or one-third of the working-age population - are "potentially underutilized". This new estimate of labour underutilization is comprised of the 195.7 million unemployed people in the world and nearly 1.3 billion working poor who live with their families on less than US$ 2 per day per person. Whereas the unemployed want to work but lack the opportunity to do so, the working poor work but do not earn enough to escape poverty.
In addition to the underutilized labour force a large number of people - about one-third of the working-age population worldwide - are not participating in labour markets at all. For the last 10 years this inactivity rate has remained much higher for women than for men, with only two out of ten men of working age inactive compared to five out of 10 women. Within Asia the situation varies greatly; in South Asia the gender gap is more than 45 percentage points while in East Asia it is less than 13 per cent. This shows that the potential of the female labour force remains untapped.