"2009 will be a turnaround year"

Posted: Sunday, Feb 08, 2009 at 2336 hrs IST
Updated: Sunday, Feb 08, 2009 at 2336 hrs IST

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: With the largest ever global job loss prediction in human history, 51 million to reiterate, the International Labour Organization is definitely not the poster boy for anyone — governments, businesses or individuals. But not all is gloom and doom for India, explains Duncan Campbell, Director, Economic and Labour Market Analysis Department, ILO, Geneva to Sarika Malhotra during a visit to India earlier this week.

How is India placed in the Global Employment Report?

Our estimates are regional aggregates and do not deal with individual countries. India will not be as hard hit —it has grown in leaps and bounds recently, with a good growth rate. Regions that are most open to the world economy and dependent on trade are the worst affected—like the developed economies, followed by East Asia, SE Asia, Central and South Eastern Europe, Latin America and Sub Saharan Africa. Only two regions will be less affected than South Asia, West Asia and North Africa. India is not too dependent on the global economy and has a huge domestic economy, which acts as a buffer. However India will be hit by the return of migrant workers and decline of remittances.

What do the unemployment trends look like? What do you expect the magnitude of the fallout to be?

New entrants who cannot find a job will be reflected in the huge youth unemployment. It is always two to three times higher than adult unemployment and the numbers would increase as companies do not hire. Earlier, the banks and financial sectors were only affected. Now there will be hardly a sheltered sector.

The behavioural component to economic activity is immense. When the transition from Communism in the Soviet Union happened, the average life span of Soviet men declined by 20 years. The toll is physical and mental, suicides and depression all add on. Crime rates increase, especially related to economic crime and forgery.

Are there viable alternates to layoffs?

There are alternatives to layoffs that we believe should be tried before a layoff. They can alter from downward wages, though it is not the way out of recession, as it reduces consumption demands. Eg Malaysia considers a variety of steps before laying off an employee, including an across the board cut in salaries. The French government has the partial unemployment scheme by which a worker receives half the wage from the company and the rest from the state. In India,...

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