Session II: The Social Consequences

Summary

The Roundtable's second session focused on two topics:

• ASEAN's response mechanisms for labour and social protection: challenges in creating crisis-resilient economies; and

• What ASEAN could do to address rising poverty levels and social unrest?

ASEAN countries saw a substantial decline in economic activity only after the crisis had intensified in and ravaged its principal markets and sources of investment — the U.S., the EU and Japan. The decline had resulted in growing job losses with implications for future employment opportunities. The situation was aggravated in ASEAN countries with high population growth, and in those already facing youth employment challenges. The rising numbers of workers who have turned to informal and vulnerable employment, including the rural economy, are indicators of working poverty. Added to this is the fall in official aid flows from developed economies, as well as the decline in remittances from migrant workers (a source of income for poor households).

ASEAN members regularly share information on social protection at the regional level; however, there are no coherent regional policies or strategies to strengthen social protection. This can be seen in the outcome of the 14th ASEAN Summit held in February 2009 in Cha-am, Thailand, which placed more emphasis on economic and financial sector responses, rather than on regional poverty and the social impact of the crisis. At both national and regional levels, stimulus packages have given little attention to strengthen social safety nets and social protection programmes. There is no evidence of substantive efforts at formulating and implementing policies that systematically address the problem of rising poverty.

While in the short term macroeconomic policies can help to accelerate recovery and enhance resilience, governments will need to strengthen employment and social protection policies, as labour market recovery lags economic recovery by four or five years. Governments also need to provide support for the vulnerable groups in the labour market, as well as small and medium-sized enterprises, which are the “backbone of employment” and can bolster the growth of a dynamic private sector.

Social protection programmes should be incorporated into economic stimulus packages, which currently lack a social focus. This is important for ASEAN countries, as their social protection systems are in general at an early stage of development. Only Brunei Darussalam has a universal pension scheme. While public sector employees in ASEAN countries (except Cambodia) enjoy social insurance, the general public does not have similar coverage.