Asia’s policymakers must take decisive steps to generate high quality, productive jobs if the region is to sustain and broaden the benefits of its economic expansion of the past two decades, says an Asian Development Bank (ADB) report.

In a special chapter of Key Indicators for Asia and the Pacific 2011, its flagship annual statistical publication, ADB says Asia has outstripped other regions in growth and employment creation since 1990. This has led to substantial improvements in living standards, but progress has been uneven in this heterogeneous region. Asia still remains home to most of the world’s poor with more than 40% of most countries’ populations living below the $2-a-day poverty line.

Lower-income countries are having difficulty meeting some of the Millennium Development Goal targets and where progress has lagged, social tensions may arise. Despite recent turmoil in financial markets, policymakers must keep focused on structural improvements.

As Asia grapples with globalization and changing demographics, including an expanding middle class and aging societies, it will face even more pressure to generate quality jobs that can satisfy public aspirations and support inclusive growth. Many of the new jobs that have been created in Asia are low-cost, low-wage manufacturing positions.

“The percentage of workers in informal employment in Asia remains sharply higher than in most other regions. Quality jobs are important for reducing poverty and income inequality, and for promoting social cohesion and political stability,” said ADB’s Chief Economist Changyong Rhee.

The special chapter, titled “Toward Higher Quality Employment in Asia,” says the pattern and rate of job creation across the region have been sharply mixed, and growth is not enough on its own to guarantee quality jobs with decent wages and conditions. The report says creating higher value-added jobs and increasing labor productivity are key to quality employment, and higher quality employment is the critical link between growth and poverty reduction. But there is no one-size-fits-all solution for the region, with economies at different stages of development.

Middle-income countries will need to promote trade and foreign direct investment, and develop human capital in order to move up the value chain of production, while diversifying the types of social protection measures. Low-income countries can benefit from increasing trade and facilitating smoother rural-urban migration. Productivity in rural areas needs to be improved, and technical and vocational training broadened. For these countries, informal workers need to be provided with a basic level of social protection.

“With appropriate demand and supply side policies and some levels of social protection, countries can make substantial progress towards developing higher quality employment in Asia that will enable it to continue its achievements in poverty reduction and inclusive growth,” Mr. Rhee said.