Exports and the Global Crisis: Still Alive, Though not Quite Kicking Yet

Niny Khor,Iva Sebastian

doi:10.2139/ssrn.1618164

Abstract

This paper describes the severity of the declines of Asian exports during the recent global crisis and provides more detailed information on the hardest hit manufacturing and exporting industries. To do this, we use various sources of data, including Industrial Statistics of the United Nations Industrial Development Organization as well as the latest monthly unemployment and exports data available from official sources. We find severe declines of exports across most product categories, and that the worst-hit sectors often consist of larger, more productive firms relative to other manufacturing sectors. Some of these sectors also employ higher percentages of women workers in countries such as Indonesia and Malaysia. Nonetheless, although official unemployment rose across developing Asia, the level has yet to reach that of OECD countries. In further contrast to the jobless recovery facing some OECD countries, employment shows recent signs of stabilizing and even increasing. Finally, we conclude with a discussion on the recent upward trends in exports. While we see cautious optimism in the revival of exports, data indicates that Asian workers are not clearly out of the woods yet.

Highlights

The current global economic crisis that began in 2008 has been dubbed as the “worst economic crisis” since the Great Depression
We find that smaller enterprises are less export-oriented, less likely to use imported inputs, and more likely to sell their output to other small firms or directly to consumers
We identified the percentage of women working in firms producing the major export products of selected countries namely: Malaysia, Korea, Japan, and Indonesia

Summary

Introduction

The current global economic crisis that began in 2008 has been dubbed as the “worst economic crisis” since the Great Depression. Even though the financial impact in Asia is not as severe as the correction in the United States (US) and in countries of the Organisation for Economic Co-operation and Development (OECD), the brunt of the crisis was prominently felt by most Asian countries in terms of the unprecedented and swift decline in exports. The initial wave of the impact, through the steep drop in real demand, posed a large challenge for exporting enterprises in developing Asian countries with large export sectors. As exports continued to decline due to weak demand especially from the developed countries, workers in developing Asia are greatly affected. Given that these exporting sectors hire a considerable portion of the total labor force, a decline in export demand translated into job losses, hours or wage cuts, and/or reduction of employment benefits

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