Manila: Asian countries have a unique opportunity to use their new-found prosperity to make progress on social issues and promote fairness, the head of the International Labour Organisation said Sunday.
Director general Guy Ryder said Asian nations were turning away from reliance on cheap labour and exports to fuel growth, and had realised the value of higher wages and boosting domestic demand.
“It is time for Asia to turn its attention to matching its economic success with social progress. It has that margin open to it and now is the time to take those steps,” he told AFP in an interview.
Ryder, who is in the Philippines as part of his first visit to Asia after being elected in October, said social protections like higher wages and pensions could actually make economic growth more sustainable.
He said that between 2000-2011 real wages in Asia had doubled while in China, the region’s economic powerhouse, they had tripled.
In contrast, real wages worldwide had risen by 23 per cent in the same period and by just five per cent in developed industrialised countries.
“There is a lot going on in Asia and a lot to be optimistic about,” Ryder said, citing recent efforts to improve wages and benefits.
China was setting up pension schemes and “giving greater attention to the wage levels of people” instead of keeping salaries low to encourage exports, he said.
Thailand had recently put a minimum wage in place and was also setting up other social protection schemes, said Ryder.
“Countries are seeing that in the long term, low wages, competing on the bottom end of the market, is not the best way to go forward,” he said.
This would encourage other Asian countries like the Philippines also to let wages rise, he added.
He said the challenge in the Philippines was the large number of people in “vulnerable” sectors who could not rely on a regular income.
Ryder said the Geneva-based ILO was working with Manila to address this by attracting the right investment, improving education and reforming fiscal policies.
He warned that letting wage levels stagnate had contributed to such problems as the latest financial crisis.
Ryder said US real wages had remained virtually flat for the entire decade, forcing many Americans to go into debt to buy homes and creating the conditions for the crisis.
