Significant job losses in developing Asia in 2020, ADB data show

Article | 18 June 2021

As of early 2021, the number of global deaths due to coronavirus disease (COVID-19) has surpassed two million. In addition to the ongoing threat to health in developing Asia, the pandemic has led to an unprecedented economic crisis, with millions of jobs lost and companies closed. This devastating blow will reverse much of the region’s progress in reducing poverty, as well as adversely affect health and education prospects.

The effects on employment have been uneven, with significant job losses in hard-hit sectors such as tourism, retail, and construction and some job growth in higher skilled services sectors such as IT, insurance, finance, health, and pharmaceuticals. Data drawn from ADB’s Basic Statistics 2021, an ADB publication presenting relevant social and economic data, clearly show the jump in levels of unemployment in the region in 2020, as well as considerable variation across countries with regard to the severity of COVID-19’s impact on jobs.

The International Labor Organization (ILO) defines the unemployment rate as the number of people without paid work as a percentage of the labor force (i.e., the employed and the unemployed). The unemployed are defined as people of working age without paid work (not in paid employment or self-employment), people available for work, as well as people seeking work during the reference period.

South Asia has been particularly badly hit, India’s GDP growth fell by 8% in 2020, according to the data. Using data from the ILO, Basic Statistics 2021 shows that the unemployment rate in India rose from 5.2% for women and 5.3% for men in 2019 to 7.7% for both sexes in 2020. The government of India has been working to revive the economy by spending more than $412 billion on recovery, including fiscal stimulus, support to businesses and social protection to workers, according to ADB’s COVID-19 Policy Database.

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The unemployment rate in India is likely to rise further in 2021 as the country tries to contain a serious new surge in the pandemic. Neighboring Nepal also experienced a substantial rise in unemployment in 2020, rising to a total of 4.4% from 2.7% for women and 3.0% for men the previous year, according to the data.

The severe limitations of data collection during the pandemic mean that ILO unemployment figures disaggregated by sex for 2020 are not available. But given historically higher unemployment rates among women in much of developing Asia, it appears highly likely that working women have been disproportionately impacted by the pandemic.

“Basic Statistics 2021 reveals the devastating impact of the COVID-19 pandemic on employment and livelihoods in Asia and the Pacific, with the poor and vulnerable, including women, migrant workers, and daily wage laborers hit the hardest. The region was already making faltering progress towards the Sustainable Development Goals and the pandemic has been a huge setback, so we must redouble efforts to return to green, sustainable growth,” said ADB’s Chief Economist Yasuyuki Sawada.

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COVID-19 had a marked impact on GDP growth in Southeast Asia in 2020 also. This was led by a contraction of 9.6% in the Philippines, one of the biggest falls ever in the country, Basic Statistics 2021 shows. The pandemic and resulting lockdown in the first half of 2020 led to widespread unemployment. The data record a rise in unemployment in the Philippines in 2020 from 2.5% of the female labor force and 2.1% of male workers to 3.4% for both women and men.

This substantial increase in unemployment in the Philippines in 2020 is clearly related to the pandemic and resulting lockdown; unemployment levels have hovered at around 2.5% in the Philippines over the past five years, according to earlier editions of Basic Statistics. Government plans to strengthen labor market programs and help sectors badly affected by the pandemic, including agriculture and tourism, will support a pickup in the economy in 2021, assuming a successful national vaccination campaign can be rolled out.

Tourism-dependent Thailand’s was also hit hard, with GDP growth contracting by 6.1% in 2020 after growing by 2.3% in 2019, according to ADB figures. There was a commensurate rise in unemployment from 0.7% to 1.0% in 2020, Basic Statistics 2021 shows. Most of the job losses were in tourism, manufacturing and agriculture. The economy is expected to rebound in 2022, with the growth rate forecast to rise to 4.5%, according to ADB’s Asian Development Outlook (ADO) 2021, as vaccination rates, global trade. and tourism pick up.

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The data show similar rises in unemployment in Central and West Asia and the Pacific. It’s important to point out that the available data tell only part of the story. Unemployment rates do not include workers who experienced a reduction in hours, or who were forced into temporary, inappropriate or dangerous jobs by the pandemic. Clearly the impact on lives and livelihoods in developing Asia has been substantial.

Although unemployment rates are likely to reduce as Asian economies emerge from the worst of the pandemic in 2021 and 2022, many governments are prioritizing the need to reduce unemployment in their COVID-19 recovery programs through support to businesses and retraining workers.