Financial crisis could cost 20 million jobs

By Jonathan Lynn

GENEVA (Reuters) - Twenty million jobs will disappear by the end of next year as a result of the impact of the financial crisis on the global economy, a United Nations agency said on Monday.

Construction, real estate, financial services, and the auto sector are most likely to be hit, according to the International Labour Organisation's (ILO) estimate, which is based on International Monetary Fund projections for the world economy.

The toll on jobs could be even higher if IMF economic projections are cut, said ILO Director-General Juan Somavia.

"We have to talk about the financial crisis in terms of what happens to people and what happens to jobs and enterprises," he told reporters.

Somavia said the ILO, which brings together governments, employers and workers, wanted to steer discussions about the resolving the crisis towards job creation and other steps to promote the "real economy."

"It would be tragic to respond to a sub-prime crisis with sub-prime policies," he said.

The ILO does not yet have a regional breakdown of projected job losses, which Somavia said would take global unemployment to 210 million in late 2009 from 190 million last year, the first time it has topped 200 million.

But countries with large domestic markets that do not depend heavily on exports would be able to weather the crisis better, he said, citing as an example China, where exports make up only 11 percent of the economy.