Accessibility links

Outlook Seen As Grim For World Growth, Unemployment

  • Kathleen Moore

Unemployed migrant workers leaving Moscow last month.

Unemployed migrant workers leaving Moscow last month.

The International Labor Organization (ILO) says the world is facing a jobs crisis.

Even the agency's most optimistic forecast is bleak -- at least 18 million jobs lost by the end of 2009.

But that's only if the raft of measures taken by governments around the world -- including economic stimulus packages -- help revive growth.

If not, the picture could be a whole lot worse -- 51 million jobs lost worldwide by the end of 2009.

"We have been looking at estimates from 1991 forward, when we've been able to have relatively comparable measurements of employment, and this is by far the largest increase that we've seen in the number of unemployed," says Lawrence Johnson, the lead author of the ILO report "Global Employment Trends.

"It actually takes the global rate of around 5.7 percent in 2007 -- if all things align in the wrong direction -- it could take that rate globally up to excess of 7.1 percent," he says.

Swollen By Migrant Workers


In the region that includes Central and Southeastern Europe and the CIS countries, the ILO sees unemployment rising to as high as 9.8 percent.

[Seeing] unemployment move in the region from 8.5 to 9.8 percent is quite alarming. That basically translates into unemployment moving from 15 million up to 18 million.
Their ranks are likely to be swollen by migrant workers returning home after losing jobs abroad.

"We know that as individuals may lose their jobs in other parts of Europe, they may seek to return back home in order to save money, live with families," Johnson says. "[Seeing] unemployment move in the region from 8.5 to 9.8 percent is quite alarming. That basically translates into unemployment moving from 15 million up to 18 million."

That's only part of the picture, of course.

Figures can be unreliable. In Tajikistan, for instance, the official jobless rate is lower than 3 percent, but it's believed to be many times higher.

Officials figures also might not reveal the extent of the "hidden" economy or seasonal jobs.

And data, of course, does not convey what it means to be unemployed.

In developed countries, many job seekers can get temporary financial support. No such luxury for those losing work in poorer countries.

That's why the ILO also tracks likely numbers of working poor and the "vulnerably employed." It says that by the end of this year, nearly one in four workers in the Eastern Europe-CIS region will be in these jobs that are unsafe or insecure.

But one thing is clear -- the wave of layoffs is spreading east.

Shrinking Demand

Neil Shearing, an emerging Europe economist at Capital Economics in London, says unemployment in the Baltic countries could spike to more than 15 percent, and that Bulgaria, Romania, and Ukraine are looking vulnerable.

"In the first instance, construction and manufacturing will be hardest hit," Shearing says. "Industry has absolutely collapsed in recent months on the back of shrinking demand in Western Europe. But eventually I think the recession will essentially engulf the entire economy of the region."

Underscoring that gloomy picture, the International Monetary Fund on January 28 said the global economy would likely grind to a halt this year.

The fund forecast growth of just 0.5 percent -- down from an estimated 3.4 percent last year.

And it said the economies of Central and Eastern Europe and the CIS would go into negative territory this year, contracting 0.4 percent.

With Russia, the contrast was even more severe -- from 6.0 percent growth last year to a contraction of 0.7 percent in 2009.
XS
SM
MD
LG