ILO Predicts Job Growth Will Lag Behind Recovery

Youth unemployment in Southeast Asia and the Pacific is expected to peak in 2010, according a report from the International Labor Organization released today and an ILO economist said that job creation in Cambodia will lag behind economic recovery this year.

According to the report, unemployment in Southeast Asia and the Pacific of 15 to 25 year-olds will reach 14.8 percent. Kee Beom Kim, a labor economist based in Bangkok, said while Cambodia generally has low unemployment compared to neighboring countries, the economic crisis has caused more workers to take low-paying jobs, often with poor conditions, in order to survive. Now that the economy is improving, the affect will not be immediate, he said.

“We can also expect some sort of lag in the labor market. Just because the economy is supposed to recover strongly doesn’t mean there will be a equal recoverv in the labor market,” he said.

In June the World Bank predicted 4.8 percent GDP growth in 2010, while the Asian Development Bank predicted 4.4 percent growth in April.

Some Cambodian economists disagreed about job creation not matching growth this year in Cambodia.

Chan Sophal, president of the Cambodian Economic Association, said growth in the labor-intensive garment sector will help fuel job growth this year.

“There is a correlation between employment and economic growth and as long as the economy grows there will be more employment. This is common sense,” he said.

Mr Sophal said that there is a lack of accurate and up to date employment data in Cambodia as tracking employment tends to be difficult in Cambodia because tourism, agriculture and garments can all have seasonal highs and lows, and the much of the economy is informal.

Neou Seiha, a senior researcher for the Economic Institute of Cambodia, said growth in tourism, agriculture and garments will all increase employment, though for now construction appears to be stagnant.

Still he noted that the economic crisis did more to increase underemployment, meaning that more people worked part time on family farms making less money than formal sector jobs in tourism, construction and factories.

“We had less jobs demand but they can go back home and do the farm work,” he said.

Asked about the job market, Oum Mean, secretary of state for the Ministry of Labor, “In Cambodian, there is no crisis of unemployment. Right now there are some factories open and they don’t have enough workers.”

(Additional reporting by Chhorn Chansy)

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