NEWS: ‘Urgent need’ to tackle informal employment in developing countries, warns ILO

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1.3 billion people in the Asia-Pacific region are working in the informal economy, the majority without decent working conditions, with India reporting one of the highest rates in Asia, according to a new ILO report.

The report found that two billion people around the world - more than 60 per cent of the world’s employed population - work in the informal economy. Most lack rights at work, social protection such as sickness benefits and decent working conditions, warns the International Labour Organization (ILO).

The vast majority (93 per cent) of the world’s informal employment is in emerging and developing countries, with 1.3 billion informal workers in the Asia-Pacific region alone.

India has the fifth-highest level of people working in the informal economy in southern and eastern Asia and the Pacific, the ILO report shows.

In Asia and the Pacific (excluding central and western Asian countries such as Turkey), India has the fifth-highest level of people working in the informal economy (88.2 per cent of the employed population), with only Bangladesh (89 per cent), Cambodia (93.1 per cent), Lao (93.6 per cent) and Nepal (94.3 per cent) reporting higher rates.

In contrast, developed Asian countries report much lower rates of informal employment, with Japan reporting that just 18.7 per cent of all employment takes place in the informal economy.

Commenting on the findings, Florence Bonnet, one of the report’s authors, said: “There is an urgent need to tackle informality. For hundreds of millions of workers, informality means a lack of social protection, rights at work and decent working conditions, and for enterprises it means low productivity and lack of access to finance. 

“Data on those issues are crucial for designing appropriate and integrated policies that are tailored to the diversity of situations and needs.”

The report states that while not all informal workers are poor, research shows workers in the informal economy face a higher risk of poverty than those in the formal economy. “Most people enter the informal economy not by choice, but as a consequence of a lack of opportunities in the formal economy and in the absence of other means of livelihood”, it adds.

As a result, the ILO is calling on all countries to make the transition from the informal to the formal economy – for example, by promoting the creation of decent jobs in the formal economy, and extending social security benefit schemes to cover people in informal employment, such as homeworkers and domestic workers.

“The high incidence of informality in all its forms has multiple adverse consequences for workers, enterprises and societies and is, in particular, a major challenge for the realisation of decent work for all and sustainable and inclusive development,” said Rafael Diez de Medina, director of ILO’s Department of Statistics.

“Having managed to measure this important dimension… this can be seen as an excellent step towards acting on it.”

The report, Women and men in the informal economy: A statistical picture, draws on statistical and survey information from more than 100 countries and can be found here.

The ILO is a United Nations agency that brings together governments, employers and worker representative bodies from over 180 ILO member States to set labour standards and promote decent work for all people around the world.


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