Asia’s Informal Workers Need ‘New Deal’ of Protections, IMF Says

(Bloomberg) --

Governments across Asia should do more to prop up informal workers whose weaker savings and safety nets make them particularly vulnerable in virus-stricken economies, according to the International Monetary Fund.

These workers make up about 60% of non-farm employment across the Asia-Pacific region, higher than in Eastern Europe or Latin America, Era Dabla-Norris and Changyong Rhee from the IMF's Asia-Pacific Department wrote in a blog post published Thursday.

Many are in part-time or temporary jobs that lack benefits, or in roles that are neither taxed nor regulated by the government. They are also twice as likely as formal workers to belong to poor households, the IMF officials said.

As governments worldwide open the spigots to pump trillions of dollars into their economies, workers with little or no formal attachment to the labor force are being targeted for special aid.

Several economies have already expanded existing social assistance programs, according to the IMF, including Vietnam, Nepal, Bangladesh, India, and Indonesia. The IMF highlighted Thailand and Vietnam as examples of countries introducing new ways of providing cash transfers, and the Philippines for using a public works program employing informal workers as medical assistants amid the outbreak. Malaysia was cited for providing grants to micro-enterprises.

Some of the ‘new deal' measures proposed by the IMF include: getting the health basics right; tapping multilateral funding as necessary; making clean water a priority; expanding safety nets, including by investing in the digital economy to draw in more recipients of public aid; and improving the business environment by reducing regulation and making the tax system more efficient.