“The global employment situation is grim, and getting grimmer," says Michel Hansenne, the ILO director-general, in the report. “The world financial crisis has put immense pressure on globalisation, and we fear that many governments may begin turning their back on much-needed economic reforms. But globalisation per se is not the problem."

The solution? The ILO speaks of the critical role of high quality, educated skilled labour force, as among the measures to increase competitiveness, growth and employment in a globalising world.

In the 1996 World Employment Report, the ILO had projected an optimistic picture of rising world employment, heralding a global economic revival that would cut unemployment under under-employment.

But the present report shows that the 1996 estimate of one billion unemployed or under-employed has largely remained unchanged.

At a press conference on September 23, 1998, in Geneva to release the report, Hansenne admitted that the ILO had taken an optimistic view of the globalisation and liberalisation process in the world economy, but that the financial crisis is responsible for the downturn.

After the financial crisis broke out first in Bangkok, and then spread across Asia, resulting in closures of enterprises and job losses, an ILO secretariat report for a regional conference in Bangkok attempted to the survey the differing views on the causes. But the ILO head himself, at the Bangkok meeting, took the IMF/Washington view of the crisis being due to `crony capitalism', and the need for reforms, labour standards and safety nets.

According to the present report, some 150 million workers are actually unemployed or seeking or available for work. Of this figure, 10 million have become unemployed in 1998 alone owing to the financial crisis.

Some 750-900 million people in the world, or 25-30 per cent of the population are under-employed, that is, working substantially less than full time, though wanting full-time employment. Some 60 million people, in the 15-24 age group, are actively seeking employment.

While some parts of the world saw economic growth in the first half of 1998, it has not spurred higher job growth in the world, but only cut unemployment and under-employment in the US, and to a lesser degree in the EU.

The persistence of unemployment and under-employment leads to social exclusion of the young and the old, less skilled disabled and entire ethnic minority groups - with a strong bias against women in all categories, says the ILO head.

But the report continues to cling to the liberal dogma, and points as solutions to investment by countries in skill development and training for the work force.

In Asia, the picture is particularly grim. Indonesia has been steep increases in unemployment and under-employment, accompanied by food shortages. Real wages in 1998 could well fall further than the 15 per cent drop in per capita GDP projected at present, and unemployment reach 9-12 per cent, against the 4 per cent in 1996. In Thailand, the unemployment rate could now rise to about 6 per cent of the labour force or almost two million jobless.

And the Thai reliance on the traditional extended family for safety net will trigger a four-to-five-fold increase in under-employment. The ripple effects will spread far from the urban centres. South Korean job losses have accelerated in the past year, nearly doubling between November 1997 and February 1998, reaching 7 per cent in June.

In Hong Kong, unemployment has risen to 4.5 per cent in the second quarter of 1998 - up from 2.9 per cent at end 1997. In China, some 3.5 million workers will be laid off, and unemployment will increase to 3-6 per cent.

The ILO also expects worsening labour market conditions in India, Pakistan and Bangladesh, countries which so far have escaped any significant impact from the crisis.

Latin America faces the danger of being caught up in the crisis, with investors withdrawing from emerging markets, thus pushing up regional unemployment and under-employment.

Argentina, with a successful stabilisation and structural adjustment programme, saw an average growth rate of 5.8 per cent during 1991-97. But the employment situation has deteriorated, with unemployment increasing from 6.3 per cent in 1991 to 17.5 per cent in 1995, and dropping to 15 per cent in 1997.

Unemployment in 1998 is estimated to be 7.9 per cent in Brazil, 11.3 per cent in Venezuela, 3.4 per cent in Mexico and 15.2 per cent in Colombia.

In sub-Saharan Africa, the prolonged period of poor growth and deteriorating labour market conditions has given way to a slight improvement. But while encouraging, there is no “cause for undue optimism,", says the ILO.

With a growth in the labour force of almost 3 per cent, there is little job creation in the formal sector, most jobs being created in the informal sector.

The economically active population is predicted to grow by 2.9 per cent a year between 1997 and 2010, and this means an estimated 8.7 million new job-seekers will enter the labour market. In Central and Eastern Europe, most people will continue to suffer dramatic and painful declines in living standards, accompanied by a rapid rise in employment, rise in income inequalities, and collapse of output.

In Russia, the economic turmoil has been accompanied by negative growth in real wages. But Poland in contrast has seen a slow upswing.

Growth in the industrial world has been encouraging but uneven. In the European Union, more than 18 million workers are unemployed this year, and this number does not take into account the `discouraged' workers who have given up hope of finding work and the involuntary part-time workers.

The long-term unemployed have poor prospects of finding work, even if the overall macro-economic environment improves.

The social dimensions of this problem are enormous and have to be tackled with policy measures and programmes for reintegrating the long-term unemployed into the labour market.

The long-term unemployment problem is particularly severe in the EU, where more than 60 per cent or nine million long-term employed in 1996 have been out of work for more than two years.