Vol.4, June 1998

ASEAN responds to the social impact
of the financial and economic crisis

Before the Asian financial and economic crisis broke out in mid-1997 and intensified throughout the first half of 1998, the ASEAN functional committees on social development and poverty eradication had already several projects in place that could help mitigate the impact of the crisis. At the same time, on the request of the 12th ASEAN Labour Ministers' Meeting in Hanoi last April and with partial use of funding assistance from the United Nations Development Programme partial use of funding assistance from the United Nations Development Programme,(UNDP), the ASEAN Secretariat is preparing a work programme to address the, (UNDP), the ASEAN Secretariat is preparing a work programme to address the, labour and unemployment pact of the crisis as the crisis a comprehensive Plan of Action to respond to the social fall-out of the crisis.

The Plan of Action will cover the areas of youth, women, education, health and nutrition, children, rural development and poverty eradication among others. Special attention however, will be given to the labour aspect of the social impact of the crisis, considering that an International Labour Organization (ILO) study has cited unemployment as a major consequence of the current economic turmoil.

Millions of jobs lost

According to the ILO study, "Social Impact of the Asian Financial Crisis," as the affected economies suffered near zero or negative GDP growth, retrenchments would be substantial in the construction, financial services and manufacturing sectors and that a contraction in the hiring of new workers would lead to at least a "doubling of open employment rates."

As it has turned out, millions of workers in the once dynamic economies of the ASEAN region lost their jobs as corporations retrenched, stopped operations or went out of business for good. In turn, millions of children have left school, many of them in order to seek employment and help their families cope with the economic crunch. In general, the quality of life in many households in the region has suffered a significant reduction.

Help from the ADB, UNDP The Labour Ministers therefore requested that the Secretariat explore with the Asian Development Bank (ADB) and the United Nations Development Programme (UNDP) a possible ASEAN regional programme that would respond to the effects of the crisis. Such a programme would include the following:

Regular consultations among the social partners in relation to economic restructuring;
Strengthening of the reconciliation and mediation machinery;
Promotion of human resources development; and
Dissemination of information and sharing of best practices.

Collaborative projects

While preparing the Plan of Action to address the social impact of the crisis, the ASEAN Secretariat will also explore with the ADB a number of possible collaborative projects on this concern, taking into account the recommendations of the address Labour Ministers.

Among the projects already being implemented to respond to crisis is the ASEAN Regional Project on Human Resources Development. The project, which has received funding assistance from the UNDP, aims to ensure the availability of skilled manpower in the region and will help ASEAN member countries devise appropriate human resources development planning strategies. It will also strengthen labour market monitoring and analysis and establish a regional network of HRD planning and training institutes.

Ministers on labour sizes

During their meeting in hanoi, the Labour Ministers also emphasized that ASEAN does not condone child labour and welcomed the ILO initiative that would address the issue of intolerable forms of child labour through a new instrument.

They also said that not sanctions-based measures would not solve the problem since the root cause of child labour is poverty.

The best solution, they said, would generate through a gainful employment and provide education and training for those who would otherwise prematurely join the labour force.

The Labour Ministers also agreed to encourage ratification and observance of the even fundamental conventions on labour and ,the ILO Declaration on the Fundamental Rights of Workers. They maintained the ASEAN position that ratification of the ILO Conventions should be achieved through promotional means, based on the development of each member state and that the follow up mechanism should not impose new obligations on member states or create double scrutiny but should build on established procedures.