Growth in jobless a problem for export-led Asia

Asia's economic boom may have generated formidable wealth in the region's most robust economies in recent years, but the surge in exports has resulted in a rise in inequality, higher unemployment and persistent food insecurity, according to the United Nations.

The UN development programme's report says that trade liberalisation has resulted in "jobless growth" in some parts, particularly in east Asia, and has had a severe impact on agriculture.

The report found that despite formidable growth rates in China and the surge in exports from the region, young people still face chronic unemployment. Fewer jobs were created in the Asia-Pacific region in the 1990s - 176m - compared with 337m in the 1980s, the report found. As a result, overall unemployment in the region shot up from 3.9% to 6.3%, even though manufacturing output went up by almost 180%.

The main burden of unemployment has fallen on the young: in 2004, while those aged 15-24 made up one-fifth of the labour force, they constituted nearly half the unemployed.

Women too have lost out: in most countries their unemployment rates are higher than men's. "The fact that Asian agriculture has not performed well is at the heart of the story," UNDP's Asia-Pacific director, Hafiz Pasha, told journalists in New Delhi in advance of the release of the report, Trade on Human Terms, which assesses the impact of Asia's phenomenal export-led growth on people's lives. "Over half a billion people still go hungry in our region, more than in any other part of the world."

At the same time, the problem of jobless growth has been acute in the booming economies of east Asia, with the worst scenario in high-trade countries such as China and Singapore, where unemployment rates have increased substantially. The principal cause has been the shift in manufacturing from low-tech, labour-intensive industries, such as garments, to hi-tech and more capital-intensive ones, such as electronics.

"China's economy grows at 10%; its employment grows at 1%," said Mr Pasha.

Another disturbing outcome of the rapid increase in trade, says the report, has been the rise in income inequality. "Countries which have grown faster have become unequal faster," said Mr Pasha. "And in China, the rural-urban gap has increased phenomenally. In this context, the redistribution policies of governments become extremely important, but we have not seen the kind of concern that is needed," he added.

Nevertheless the report shows a substantial decline in poverty. Between 1990 and 2001 the number of people living on less than $1 a day dropped by nearly a quarter of a billion. But less developed countries such as Laos or Nepal have had less success. Thirty-eight per cent of the population in these countries lives below the poverty line, compared with 22% in the more developed ones.

The UNDP human development report calls for greater investment in rural development.