South Asia faces five major employment challenges, says the recent report published by the Mahbub ul Haq Development Centre, Human Development in South Asia 2003 - The Employment Challenge. First, South Asia is a hugely populated region with 1.4 billion people, 60 per cent of whom are in the working age group. Second, labour force participation is only about 66 per cent of the working age population. Third, employment growth rates are lower than both GDP and labour force growth rates. Fourth, agriculture is the predominant employer, although this sector has been suffering from lack of investment and low productivity since the green revolution during the 60s. Fifth, one-third of South Asia is in poverty; and, about half of the population - in four large countries - is illiterate.

South Asia currently accounts for about 22 per cent of the world's population. Except for Sri Lanka, which has completed the demographic transition, the other countries are still in the midst of a population explosion. Recently, Bangladesh and India have entered the fertility-declining phase of demographic transition.

In South Asia, children (10-14 years) and senior citizens (65 years) and over are also engaged in economic activities. Due to this structure of the population in which the youth dominates, the working-age population growth rate will be higher than the overall population growth rate. Thus, the growth rate of the labour force may not decline perceptibly in the near future, though the population growth rate is projected to come down.

South Asia's labour market is characterized by pervasive unemployment and underemployment, especially among the youth and the educated, working poor who do not get adequate wages to get out of poverty, and among women who face discrimination across the labour market, reflecting prevailing social attitudes.

In South Asia, open unemployment is generally recorded to be low, due to the absence of social protection plans for the unemployed, and non-existence of employment agencies often used for identifying the unemployed. Furthermore, the pervasive nature of the household enterprise system in South Asia acts as a labour market sponge. Also, the financial difficulty faced by an unemployed person forces him/her to engage in any kind of activity that may not be regarded as fully productive use of time. It is in this context that underemployment and non-productive use of labour become the real employment issues in South Asia.

Unemployment among the youth accounts for a major portion of the total unemployment. During 1997, youth accounted for 70 per cent of the total unemployed in Sri Lanka, 53 per cent in India and 45 per cent in Pakistan.

Employment prospects of the educated youth have worsened during the past decade or so because of low or negative growth in public sector employment that was the major employer of educated youth.

Failure to have jobs appears to have led the educated youth towards either inactivity or further involvement in education. Data on Pakistan and India reflect these tendencies. For instance, according to the 1998-99 Labour Force Survey of Pakistan, 20 per cent of the post-graduate degree holders were out of the labour force, who were neither working nor looking for work. Almost 50 per cent of female doctors and 35 per cent of graduates in different disciplines were reported to be out of the labour force.

The report claims, WTO has failed to generate employment in the region. South Asia's unemployment level has increased from 2.9 per cent in 1995 to 3.4 per cent in 2001 and annual employment growth rate has also come down during the second half of the 1990s as compared to the first half. Data from the Asian Development Bank [ADB] shows that unemployment has increased in Pakistan, Bangladesh and Maldives. The figures reveal that in most South Asian countries the employment scenario has worsened in the post-WTO period.

The employment challenge in South Asia is highly discriminatory against women. Two-thirds of South Asian women are employed in agriculture or agriculture-related activities. They work in various roles such as agricultural labourers, manager of homesteads, and sometimes even as landowners. However, they are not allowed equal opportunities in this sector in access to credit and inputs, and face discrimination in wages.

In the informal sector, women form the majority of the workers as the migration of men to urban centres or abroad has provided opportunities for more female involvement in small enterprises in the rural areas. In the urban areas, the demand for cheap low-skilled labour has increased over the years owing to export-oriented manufacturing. This trend has been instrumental in providing employment to an increasing number of women. However, women are often hired on exploitative terms - working in difficult conditions for long periods for low wages. As women become more active in the labour market, their bargaining power also improves. But as women's work gets more recognition, there is a fear that this might negatively impact on the future employment opportunities for them.

The report leads to three main conclusions about the South Asian employment challenge:

* The persistent inability of the workplace to absorb workers productively can be attributed to the failure of governments in the region which do not adopt job creation as an explicit policy commitment and fail to improve the quality of life of the majority of people.

* The multilateral organizations working in the region do not back their plans with adequate financial resources, and their overall country development policy framework focuses more on GDP growth and balancing budgets rather than reduction of poverty.

* Finally, some blame for persistent problems of unemployment and underemployment in the developing world has to be placed at the door of the developed world. The rich countries have failed in their promises of assisting development in the poorer countries. They have not delivered on their global commitment to allocate 0.7 per cent of their GNP for providing assistance to developing countries, and have not encouraged true liberalization of the world economy.

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