Southeast Asia Facing Economic Crisis

As jobs dry up in Southeast Asia, a return to the safety of the countryside

After months of clinging to the hope that Southeast Asia might avoid the worst effects of the global economic crisis, layoffs across the region have gathered pace, governments are announcing sharp falls in economic growth and lawmakers are passing a raft of stimulus packages. Economic woes are high on the agenda at the summit meeting of the 10 countries of the Association of Southeast Asian Nations this weekend.

While the crisis in the West centers on insolvent banks, home foreclosures and swelling unemployment, in Southeast Asia economists predict that one hallmark of the downturn will be the exodus of workers back to the family farm.

Most countries in the region, including Indonesia, Malaysia, the Philippines, Cambodia and Laos, do not have a national system of unemployment benefits, according to Gyorgy Sziraczki, an economist at the International Labor Organization's regional office in Bangkok. Other countries, like Thailand, offer modest assistance to the jobless: a maximum of $200 a month for no longer than six months, provided they paid into a social security fund while they were still working.

Economists are predicting that millions of workers will be unemployed as the economies of Thailand, Singapore and Malaysia contract this year while the Philippines and Indonesia grow at sharply reduced levels. Thailand, which is highly dependent on exports, is among the worst hit in the region, with its economy shrinking 6 percent in the last quarter of 2008 alone.

February 27, 2009

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