Finance

Home page

Finance

World economy poised to lose up to 51 million jobs

03 February 2009 11:02 (UTC +04:00)

Baku- APA-Economics. Up to 51 million jobs worldwide could disappear by the end of this year as a result of the economic slowdown that has turned into a global employment crisis, a United Nations agency said on Wednesday.
The International Labor Organization (ILO) said that under its most optimistic scenario, this year would finish with 18 million more unemployed people than at the end of 2007, with a global unemployment rate of 6.1.
More realistically, it said 30 million more people could lose their jobs if financial turmoil persists through 2009, pushing up the worldâ€™s unemployment to 6.5 percent, compared to 6.0 percent in 2008 and 5.7 percent in 2007, Reuters reports.
In the worst-case economic scenario, the Global Employment Trends report said 51 million more jobs could be lost by the end of this year, creating a 7.1 percent global unemployment rate.
â€œIf the recession deepens in 2009, as many forecasters expect, the global jobs crisis will worsen sharply,â€ it said. â€œWe can expect that for many of those who manage to keep a job, earnings and other conditions of employment will deteriorate.â€
Caterpillar, Sprint, Philips, Texas Instruments and ING are among the companies that have cut thousands of jobs in response to the financial crisis and economic downturn that has spread around the world.
The ILOâ€™s previous employment estimate, released in October, was that 20 million jobs would disappear by the end of 2009 as a result of the financial crisis.
Developing countries will suffer most from additional job losses, according to the ILO, whose governing structure includes governments, employers and workers groups.
â€œSub-Saharan Africa and South Asia stand out as regions with extremely harsh labor market conditions and with the highest shares of working poor of all regions,â€ the report said.
According to ILO estimates, North Africa and the Middle East had the highest unemployment rate at the end of 2008, at 10.3 percent and 9.4 percent respectively.
Central and southeastern Europe and the former Soviet states ended last year with a jobless rate of 8.8 percent, sub-Saharan Africaâ€™s was 7.9 percent and Latin Americaâ€™s was 7.3 percent. East Asia fared best of the worldâ€™s regions at 3.8 percent.
Most job creation in 2008 came from South Asia, Southeast Asia, and East Asia, while developed economies and the European Union lost some 900,000 jobs on a net basis.
The ILO said that government works projects, like those recently announced in Argentina, could help create and sustain jobs until the private sector starts to rebound.
Construction and rehabilitation of public infrastructure such as roads, bridges, schools, hospitals and public buildings could be especially helpful in poorer countries with high levels of joblessness, the report found.
â€œWhile major capital-intensive new infrastructure projects take time to translate into increased employment, labor-based approaches can generate jobs and much-needed infrastructure quite quickly,â€ it said, also noting the World Bank has launched an infrastructure crisis facility that could support this work.
The ILO also urged governments to extend unemployment and health insurance programs to help people endure the crisis.