South Asian productivity up 50%

The productivity of South Asia, including India, has risen by around 50 per cent in the last decade, the International Labour Organisation (ILO) has said in its report, "Key indicators of the labour market."

However, the productivity gap between the US and most other economies continued to widen during the period. In the US, the value added per person employed in 2006 was $63,885, while it was $6,587 in India.

The ILO report shows a rapid rise in productivity "" measured as output per person employed "" in South Asia, from $5,418 in 1996 to $7,998 in 2006. Despite this, the productivity of a South Asian worker is one-eighth of a developed economy's worker.

"Increases in productivity are mainly a result of companies combining capital, labour and technology better. A lack of investment in people (training and skills), equipment and technology can lead to an underutilisation of the productive potential of labour and so perpetuate poverty," said the report.

The report also found a positive trend in the level of working poverty in South Asia. This fell from 56.6 per cent in 1996 to 33.5 per cent in 2006.

However, the proportion of vulnerable employment "" when a worker is at a risk of falling back into poverty "" decreased slightly, from 81.4 per cent to 78.2 per cent. Often, these people work in the informal economy and carry a higher risk of being without social security or a voice at work, the report says.

According to the report, 1.5 billion people in the world, that is, one-third of the working-age population, are "potentially underutilised."

This comprises 195.7 million unemployed and nearly 1.3 billion working poor who live with their families on less than $2 per day per person. About one-third of the working-age population is not taking part in labour markets at all.