When eight South Asian nations meet here to forge trade ties against the backdrop of five years of high growth, a parallel meeting of their leaders and top economists will deliberate as to why this has not translated into more jobs in the region.
The second meeting, to be hosted by the International Labour Organization (ILO), will pit finance ministries and the planning commissions of six developing countries against representatives of the workforce and employers, as the United Nations’ body strives for answers to why employment and work standards are not going hand-in-hand with high growth.
ILO has timed its meeting to run concurrently with the South Asian Association for Regional Cooperation (Saarc) group meetings. Five Saarc members—Bangladesh, India, Nepal, Pakistan and Sri Lanka—are part of the ILO meet, apart from Afghanistan, which joins Saarc this week, and Iran, which is keen to sign up.
“These unusually disparate countries are meeting at Saarc to discuss ways to enhance their trade ties. We (at ILO) want them to sit next to each other at the same time and talk about making employment and decent work central to their growth-oriented economic policy-making,” said Duncan Campbell, director (policy integration department), ILO.
Each country has been asked to present its views, through experts, on whether they feel that growth and jobs are no longer closely related, and what this could mean for employment conditions, a key concern of the labour body.
A background note for participants has outlined some of the inconsistencies in growth and employment across the region. In Pakistan, for instance, the annual average rate of growth has been 7% over the last four years, while unemployment rate has come down to 6.2% from 8.3%.
But in Bangladesh, where the rate of growth has decelerated from 5.9% in 1990 to 5.3% in 2003, unemployment rose by 12%—an indication of jobless growth—a phrase economists use to describe the phenomenon of economic growth without an accompanying rise in employment. Yet another pattern is witnessed in India, where the economy is expected to grow by 9%-plus in 2006-07, the labour force has nearly doubled between 1999-2000 and 2004-05 (from 7.6% to 14.7%) and the rate of unemployment has risen.
Typically, ILO talks about such work conditions and employment issues with worker representatives, employers and government labour policy wings. In a significant shift this year, it has decided to dovetail planning commissions and economic ministries into discussions on these issues. The motive is to see if member countries are convinced that a high number and improved quality of jobs are not inimical to high growth rates.
In India, questions about the kind of employment being generated while the GDP (gross domestic product) growth rate increases are already getting economists and policy makers to think very hard. For instance, on the rise of self-employment: According to the latest National Sample Survey Organisation, self employment has zoomed in urban areas during 2004-05 to 449 persons per 1,000 “usually employed persons”, from 415 in 1999-2000.
Some economists, such as Arjun Sengupta, chairperson of the National Commission on Enterprises in the unorganized sector, maintain that the rise in self-employment could indicate a lack of job opportunities in the manufacturing sector, and problems in agricultural productivity. Others, however, claim that self-employment avenues are generated by long-term and well-distributed economic changes that are a result of increased economic activity. “This is like a trial balloon for us, getting the workers to ask questions to the planners and vice-versa. We’re getting back to the basic questions: Do the countries still believe in their planning models, and if they think their planning agencies are the best to ensure coherence in economic policy?” says Campbell.