The Hindu Business Line : South Asian labour productivity up 50% in the last decade: ILO study

New Delhi, Sept. 3 Average labour productivity in South Asia has increased by about 50 per cent in the last decade and the share of working poverty has come down sharply. This has been possible mainly because companies have been able to combine capital, labour and technology more efficiently.

However, lack of investment in training and skill development programmes, excessive focus on equipment and technology can lead to underutilisation of the productive potential of labour and so perpetuate poverty, according to a report released by the International Labour Organisation (ILO).

The report titled ‘Key Indicators of the Labour Market’ shows a rapid increase in productivity levels (measured as output per person employed) in South Asia, from $5,418 in 1996 to $7,998 in 2006. However, despite this increase, South Asia’s workers produce only one-eighth of what a developed economy worker does, the report points out.

The report also highlights the low level of women’s participation in the workforce. For the last 10 years the inactivity rate has remained much higher for women than for men, with only two out of 10 men of working age inactive compared to five out of 10 women.

Within Asia the situation varies greatly. In South Asia the gender gap is more than 45 percentage points, while in East Asia it is less than 13 per cent, suggesting that the potential of the female labour force remains untapped.

Worldwide, the report shows that the productivity gap between the US and most other developed economies continued to widen.

With $63,885 of value addition per person employed in 2006, the US was followed at some distance in Asia by Hong Kong ($56,223), Australia ($48,694) and Singapore ($47,975), Pakistan ($8,247) and India ($6,587).

Vulnerable employment

The report also found a positive trend in the amount of working poverty in South Asia, which fell from 56.6 per cent in 1996 to 33.5 per cent in 2006. However the proportion of vulnerable employment — when a worker is at risk of falling back into poverty — only decreased marginally, from 81.4 per cent to 78.2 per cent.

Often these people work in the informal economy and carry a higher risk of being without social security or a voice at work.

“Hundreds of millions of women and men are working hard and long but without the conditions they need to lift themselves and their families out of poverty and have the risk of falling deeper into poverty. Releasing their underutilised capacities by raising their productive potential must be at the top of the international development agenda,” the Director-General of ILO, Mr Juan Somavia, said.

According to the report, 1.5 billion people in the world, that is one-third of the working-age population, are potentially underutilised.

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