The Asian Development Bank has urged developing countries, including the Philippines, to pursue measures that will provide good-quality jobs for their respective labor forces.
Although developing Asian countries have driven global growth in the last few years, a sizeable number of workers from these economies suffer from poor quality of jobs, ADB said in its report titled “Key Indicators for Asia and the Pacific 2011.”
The institution said developing countries in the region should not only pursue overall growth of their economies, but also strategies that will provide better jobs for workers.
“Behind the rosy picture [respectable growth rates of most developing countries in the region] is the daunting fact that quality of jobs in Asia remains inadequate and that the region lags far behind more advanced economies in providing workers with higher-quality employment,” ADB said in the report it released Tuesday.
According to the development lender, there is an urgent need to address the problem of low-quality jobs in developing economies.
This is because high-income earners are the ones who get to benefit the most from an expanding economy, creating social tensions that threaten the sustainability of growth.
In the case of the Philippines, unemployment rate improved to 7.8 percent in April this year, from the 8 percent recorded in the same period last year.
Nonetheless, underemployment rate worsened to 19.4 percent from 17.8 percent over the same period.
Moreover, 11.9 percent of Filipinos with jobs belong to the category of “unpaid family workers,” which include those who work for family businesses without salaries.
ADB said one way to generate better quality jobs is to step up efforts at attracting foreign direct investments.
The entry of foreign capital usually paves the way for the creation of more jobs, thus giving workers more labor choices.
Countries should also promote the development of industries and the services sector, which normally provide wages higher than the agriculture sector, ADB said.
An essential complementary move is to channel investments in education to enhance human capital, the institution added.
“Moving up the value chain and into a more industrialized and service-oriented economy, however, will require a workforce that has increasingly flexible skills and that brings innovative thinking to the table. Thus, building human capital through general and higher quality secondary and tertiary education will become crucial,” Asian Development Bank said.
It likewise reiterated the need for some economies to ease rules on foreign ownership so that they could invite more multinational companies to do business in their countries.
Relaxing and reforming such legislation so that companies may enter the formal sector is “crucial” for a developing economy,” ADB said.
These countries may then gain “greater access to capital so they can grow and take advantage of economies of scale, thus creating greater growth of employment in the modern sector,” the institution added.
In the Philippines, foreigners may own a maximum of 40-percent equity in local companies.
The issue of amending the Philippines’ Charter to ease the provision on foreign ownership has been the subject of debate for years.
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By: Michelle V. Remo
Source: Philippine Daily Inquirer, Aug. 23, 2011
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