HONG KONG (AP) -- Social instability will worsen unless governments in battered Asian nations provide long-term social safety nets for the unemployed, an official of the International Labor Organization says.
Unless jobless workers have access to a minimum income in the form of unemployment insurance, economic recovery "is unlikely to return any time soon, even under the most optimistic scenario.""The single biggest element in this crisis is the dramatic rise in unemployment," Eddy Lee, an ILO official, told reporters Tuesday.
Lee prepared the latest ILO report, which surveys the struggling economies of Indonesia, South Korea, and Thailand. The ILO monitors labor issues for the United Nations.
The absence of unemployment benefits "has inflicted unnecessary suffering and hardship" which can only be remedied with a "new and better social contract," said the report released Tuesday.
As a long-term social safety net, Lee suggested an unemployment insurance system tailored to the financial capacity of a country hit by crisis. Both employers and employees would provide money for the system, splitting a levy on wages equivalent to at least 1 percent of salaries.
Lee noted that among the three countries surveyed, only South Korea provided laid-off workers with unemployment benefits. Without any such relief, social unrest and instability "would have negative repercussions on the recovery process." he said.
In Indonesia, the ILO has estimated that by next year about 140 million people -- or two out of three Indonesians -- will be living in poverty. The Indonesian government has said that the number could grow even worse if the country's currency, the rupiah, falls further against the U.S. dollar.
The Thai government has predicted that by year's end, there will be 3 million jobless Thais, triple the number since the Asian crisis began last summer.
Critics of such international funding agencies say that economic reform packages by the International Monetary Fund and the World Bank call for financial restructuring, but they do little to dampen the social effects of economic belt-tightening.
Nevertheless, many analysts doubt that the hard-hit Asian economies will have much cash to spare for laid-off workers.
"To properly administer this program would need a fierce administrative system. I don't think those systems are in place and I don't think you can build them overnight," said John P. Sevilla, a vice president at Salomon Smith Barney who focuses on debt research in Indonesia and South Korea.