Manila: Rapid technological change that is driving economic growth could make many low-skilled jobs disappear, creating income inequality could undermine social cohesion and political stability, the Asian Development Bank (ADB) has warned.

Finance ministers, central bank governors and private sector players from the Asia-Pacific region will brainstorm the threat that technology poses to low-skilled jobs at ADB’s 51st annual board of governors meeting starting here Thursday.

At the three-day meeting, policymakers will try to find ways of mitigating the risk of labour displacement as well as steps to bring more people out of poverty that a draft blueprint called Strategy 2030 has called for. The draft strategy paper released in April for consultation seeks to meet the changing needs of the Asia-Pacific region, drawing lessons from the past.

ADB said in a statement that the annual meeting around the theme “linking people and economies for inclusive development", will examine “the effect of new technologies and globalization on jobs and how countries can prepare." ADB is expected to adopt the draft strategy document later this year.

“Putting in place a good education and vocational training system with easy access to young people is critically important so that they are ready for the changes that occur," ADB’s country director for the Philippines Kelly Bird said in response to a question from Mint at a pre-event briefing.

The draft strategy paper highlighted that although new technologies may create new jobs, these may require skills that many workers do not yet possess, which in turn may create unemployment and/or low wage growth for less-skilled workers. The challenge, it said, is to use the opportunities that technology brings, while preparing for and mitigating the risks.

Experts said there could be significant changes in the labour market as the economy adjusts to new technology. “Certainly, there is a huge space for public policy to make sure that this adjustment is not painful," said N.R. Bhanumurthy, professor at the National Institute of Public Finance and Policy, a New Delhi-based think tank. Bhanumurthy said that there may be a substantial improvement in productivity in certain areas of the economy as a result of technology adoption as well as some labour displacement in certain areas.

The issue of job losses is of concern for ADB as despite Asia-Pacific’s contribution in global economy growing from 25% of $33.6 trillion in 2000 to 33% of $75.8 trillion in 2016, poverty persists in the region. In 2013, the region was home to 326 million people living in extreme poverty, or below the $1.90 a day poverty line and an additional 915 million people lived at $1.90-$3.20 a day, putting them at risk of being pushed back into extreme poverty during economic downturns, according to the strategy paper. To prepare for possible adverse impacts, governments must adapt their education, training and social protection systems, it said.

The draft strategy paper pointed out that systemic gender gaps in productivity and wages persist, particularly in households headed by women. “Growing inequality could undermine social cohesion, endanger social and political stability, and hamper the region’s economic prospects," it said.

Mint reported on 17 December, quoting the World Inequality Report 2018 published by the World Wealth and Income Database that income inequality in India has worsened over the past three-and-a-half decades, with the top 10% of earners cornered more than half the country’s national income in 2016.

India has been trying to reduce income inequality with a host of measures including direct transfer of entitlements to the intended beneficiaries, a drive against tax evasion and schemes to improve access to energy and finance by the poor.

At ADB’s annual meeting, policymakers will also discuss tackling gender gaps through women’s entrepreneurship, mobilizing private sector funds for infrastructure development and investing in community-led solutions for climate and disaster resilience, said the ADB.