BANGKOK (ILO News) - Warning that "sustained development cannot co-exist side-by-side with social inequalities and the deterioration of our human resource," Mr. Chuan Leekpai, Prime Minister of Thailand has called for equal importance to be given to national and international economic and social development policies.

Delivering the opening speech at a high-level meeting of Asian trade unions, employers' organizations and government representatives this morning in Bangkok ^{(Endnote 1)} , Mr. Leekpai stated that "one of my Government's main priorities has been the prevention and alleviation of the unemployment problem. Towards this end, I believe a comprehensive labour policy and employment schemes - focussing upon labour market information, skills training, job creation and placement, wages and social security systems, and industrial relations - are necessary, if we are to address effectively the unemployment situation, as well as to achieve economic growth and social justice in the long-term."

"National action however will not suffice," said the Prime Minister. It must "be completed by cooperation at the international level. I am therefore pleased," he added, "to see here today so many representatives from international financial institutions and regional organizations."

"The importance of international labour standards should be recognized," he also stressed. "Indeed, in an era of increasing globalization and market liberalization, I believe these concepts are all the more relevant and can support our national development strategies."

Convened by the International Labour Organization (ILO), the three-day meeting will examine the social dimension of the Asian financial crisis and review the reform policies adopted in its wake. Participants from 8 countries - China, Indonesia, the Republic of Korea, Malaysia, the Philippines, Singapore, Thailand, Viet Nam - plus the Hong Kong Special Administrative Region will formulate specific recommendations aimed at mitigating the suffering of the poor and of those thrown into unemployment and at laying the foundations of more equitable - and sustainable - patterns of development.

Also participating in the meeting are senior representatives of the Asian Development Bank, the International Monetary Fund and the World Bank.

According to the ILO, the unemployment rate in Thailand will rise to about 6 per cent in 1998 translating into 2 million unemployed. This compares with a pre-crisis level of 1.5 per cent, equivalent to some 400,000 unemployed. In Indonesia, the negative growth forecast for 1998 may lead to an additional 5 million unemployed workers, raising the unemployment rate to at least 10 per cent. In the Republic of Korea the unemployment rate is likely to increase from 2 per cent to an unprecedented 7 per cent, by the end of 1998.

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"Shifts in Gross Domestic Product of the order of 10 per cent in one year are very severe indeed," acknowledged Mr. Michel Hansenne, Director-General of the ILO, in a speech delivered earlier today. Pointing to massive lay-offs, the sharp rise in unemployment and the absence of meaningful social safety nets in the worst-affected countries, Mr. Hansenne predicted that the crisis "will reverse the impressive trends in poverty reduction achieved in recent years."

While "a sound and resilient financial system is an essential buffer against the continuing danger of economic crisis in a world of increasingly integrated financial markets," suggested Mr. Hansenne, policy and regulatory failures were not the sole causes of the crisis. "The contamination of market processes by politics was also a root cause," he said, underlining that "the strengthening of democratic institutions is central to the post-crisis economic model that is required."

"Full respect for basic labour standards and the fostering of a strong and free labour movement" are key elements on the road to recovery. "This will ensure constant democratic pressure to improve working conditions and levels of social protection."

"The ILO stands ready to assist governments and social partners of our member States in the region" to face up to the "vigorous structural reform" required, to enhance the necessary dialogue on economic and social policies between governments and the social partners and "to put in place social safety nets which not only soften the blows of crises but contribute to preventing them from occurring," said Mr. Hansenne.

"I trust that this meeting will be a turning point in shaping a new social contract in Asia," he added. "I have no doubt that economic growth will revive in the coming year or two but it is crucial that this new growth model should rest on much stronger social foundations than in the past."

"We are confident," Mr. Hansenne concluded, "that the path to prosperity and social justice can be found again in this region which has proven to possess a dynamism and a determination to move forward that is the envy of all."

Endnote 1:
High-Level Tripartite Meeting on Social Responses to the Financial Crisis in East and South-East Asian Countries, Bangkok, 22-24 April 1998.