2013 Jun 03
June 3, 2013

Youth unemployment in ASEAN

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MINISTER of Culture, Youth and Sports Yang Berhormat Pehin Orang Kaya Pekerma Laila Diraja Dato Seri Setia Hj Hazair Hj Abdullah recently reminded the “urgent need” to tackle youth unemployment in ASEAN, and justifiably so.

Inside Investor took a look at the unemployment rates in the ten ASEAN nations, and seen as a whole of the working population, it turned out that the numbers are not that bad. The ASEAN country with the highest (official) unemployment rate is currently Cambodia at 7.9 per cent as per the first quarter of 2013, followed by the Philippines with 7.1 per cent and Indonesia with 6.3 per cent. On the lower end of the scale there are Vietnam with 2.29 per cent, Singapore 2.1 per cent and Thailand with a low of 0.63. Brunei, with 2.7 per cent is in the middle of the field.

At first sight, these unemployment figures are actually flattering for ASEAN, compared to the jobless population in certain European countries such as Spain and Greece with around 27 per cent, which is actually more than the US jobless count during the Great Depression.

However, official figures from ASEAN job markets should be treated with caution.

A number of ASEAN countries do not have the proper mechanisms to create comprehensive statistics, and officially communicated figures do not reflect reality between the employed, the underemployed and the non-employed, especially among the youth.

For example, the Myanmar Ministry of Labour officially set the latest unemployment rate for the country at 5.4 per cent, while an internal survey by Myanmar’s parliamentary planning and finance development committee in January 2013 revealed that the unemployment rate is actually as high as 37 per cent. This huge gap can be explained with the high number of undocumented jobless people and the large amount of day labourers and irregularly self-employed, mainly among the young.

Youth unemployment in this region is in fact multiple times higher than the official numbers, the International Labour Organisation (ILO) of the United Nations noted in its 2012 report Youth Unemployment in ASEAN. According to the ILO, close to 25 per cent of youth are jobless in Indonesia, followed by 17 per cent in the Philippines. Interestingly, according to the ILO statistic, Singapore has the third highest youth unemployment rate in ASEAN at around 13 per cent.

Overall, the ILO puts youth unemployment across ASEAN at 12.7 per cent, which means that around 75 million young people do not have a job.

How to tackle this problem?

YB Pehin Dato Haji Hazair suggests – apart from fostering pro-employment growth and decent job creation across ASEAN – unlocking entrepreneurial potential among the youth and the underemployed, promote self-employment through small and medium-sized enterprises and at the same time provide assistance and support to make young enterprises sustainable. To facilitate this, ASEAN nations would also need to build capabilities of young people by “investing wisely” in education and skills training.

Correct. And ASEAN nations will also have to embark on a better communication strategy to enlighten young people what the future priority sectors of the economy are.

Many young people in ASEAN are, no doubt, adventurous enough to explore emerging sectors such as creative industries and green businesses. Public organisations, with private help, could easily act as incubators and accelerators in many fields.

Our columnist Dr Arno Maierbrugger is Editor-in-Chief of www.investvine.com, a news portal owned by Inside Investor focusing on Southeast Asian economic topics as well as trade and investment relations between ASEAN and the GCC. The views expressed are his own.

Do you think ASEAN countries are doing enough to support entrepreneurship, especially among the youths? Respond through Twitter: @insideinvestor using hashtag #bruneitimes

The Brunei Times