No.156 19 November 2001 Essential Information on an Essential Issue


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“ The biggest security risk, affecting the largest numbers of people worldwide, is unemployment and the resulting poverty. This is the chronic social ill of our age. It is felt more acutely since 11 September, but it was there before. Too many people feel they have lost control of their own destiny.”
“ Whether in government or business, in politics or civil society, those with the capacity to make things happen and to make things better, are under scrutiny. They are asked to be responsible, to deliver solutions … to use their power for the common good.”

Juan Somavia, ILO Director-General

" Just over a month ago, tragic events brought home to us that our complex world has become even more uncertain, and that the need for the international community to work together in confronting new threats is greater than ever before. The impact of 11 September is now reverberating around the world. We know millions of people will become more vulnerable to poverty than before. A sense of vulnerability, and a search for appropriate responses, are reshaping international relations. Our mission to improve the lives of peoples everywhere has become more important and urgent than ever …"

Kofi Annan, UN Secretary-General and 2001 Nobel Peace Prize laureat

" This is a delicate moment. Inappropriate policies will test millions of families beyond the limits of human endurance. They will deepen poverty and endanger the fundamentals of democracy. Avoiding these dangers is as much a matter of self-interest for the North as of solidarity with the South ..."

Juan Somavia ILO Director-General

" We are living in a divided world where 1.5 billion people live under poverty with an income of US$1 per day. Employment is instrumental in the fight against exclusion."

Poul Nyrup Rasmussen, Prime Minister of Denmark

"September 11 has been the end of business-as-usual in the world, and there is a compelling need to respond to the loss of jobs due to the attacks. I call for new initiatives in developing and developed countries alike designed to put people back to work."

Bill Jordan, General Secretary of the International Confederation of Free Trade Unions

" Governments and their social partners can no longer see problems of employment in an exclusively national context. The interdependence of our economies obligates us to work in common and in solidarity. There is no true social development without vigorous policies leading to full employment and without offering the possibility for all men and women to satisfy their want through work."

Laurette Onkelink, Deputy Prime Minister and Minister of Labour of Belgium

"With a population of 1.26 billion and one fifth of the world labour force, my country is confronted with the pressing task of employment promotion. It is especially difficult for the developing countries to meet the pressing challenge brought by the new circumstances both in terms of overall national strength and quality of the working population. We should take more effective measures to address this issue with extraordinary courage so as to attain greater achievement."

Zhang Zouji, China's Minister of Labour

" The fear of a lack of jobs has surfaced due to trade with countries using cheap labour. The unequal divisions of wealth in the world are another cause for concern. In light of the anti-globalisation protests in Seattle, Götenborg and Genoa, it is necessary to provide a response to these challenges."

Pascal Couchepin, Minister for Economic Affairs of Switzerland

"Today, globalisation has become a scapegoat. In many societies, transparency, clear decisions and the lack of participation of citizens do not exist. In order that a market economy become effective, potential benefits should be maximized and risks minimized. We should be aware of the traditional view of employment, and it should be approached from a different angle ..."

François Perigot, President of the International Organization of Employers

" Today's globalisation did not invent mass unemployment or inequality. However, it has certainly failed to overcome these problems and has even added further dimensions to them — an increase in job insecurity and in the precariousness of employment.
" Until the current recession struck, the US was in the midst of demonstrating that mass unemployment can be reversed through a combination of productive investment, sustained high growth and technological innovation. As the world economy slows down in the wake of the terrorist attacks and the US recession, it is more important than ever for the leading economies to coordinate a bold and vigorous programme of monetary and fiscal expansion and job creation ... People will not accept insecurity and anxiety in their lives. "

Rubens Ricupero, Secretary-General of UNCTAD (United Nations Conference on Trade and Development)

" Employers see decent work to be the mechanism to focus the ILO's activities on supporting the creation of productive employment _ not make-work schemes _ but on jobs that make sense to the employer, are affordable and contribute to that business's viability.
" What is needed is the right national response in order for decent work to be made real. The right environment needs to be created by governments to encourage business start-ups, a regulatory environment which is fair and not a barrier to job creation, an education system producing the right skills for the market which can be accessed by all, sound governance procedures which enable certainty of legal rights and obligations, and an overarching recognition that it is private sector employers who create employment opportunities ..."

Anne Knowles, Executive Director Business New Zealand

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Global Employment Forum
  • ILO Warning: A Tidal Wave
  • Robert Reich: The Global Economy is Teetering
  • Juan Somavia: On Decent Work
  • Voices from the Global Forum

  • kofianansomav.jpg - 13625 Bytes
    UN Secretary General Kofi Annan and ILO Director General Juan Somavia at the Geneva Global Employment Forum


  • The Global Employment Forum, held in Geneva at the beginning of this month, warns of an urgent crisis in the global jobs market, in which millions of people will lose their jobs unless measures are taken to safeguard them. The ILO predicts that 24 million jobs — more than the population of Australia — will disappear by the end of 2002 because of the global economic slowdown. The World Bank estimates that 15 million more people could find themselves living in poverty next year.

    ILO Director-General Juan Somavia says that we are "staring into the face of the first synchronized world recession of the globalization era." ILO employer vice-president, Daniel Funes de Rioja, told the Forum: "We are losing production, sales, enterprises and jobs…" ILO worker vice-president Lord Bill Brett also warns: "The loss of nearly half a million jobs in the United States in the past month shows that the tidal wave has started to move and will end up on everyone's shores…"

    The ILO has called for a global stimulus package to combat the crisis. It is asking the United Nations and its agencies, the Bretton Woods institutions (the World Bank and the International Monetary Fund) and the World Trade Organization, to work together and forge "a global alliance for employment".

  • The three-day Forum brought together more than 700 world politicians, corporate and labour leaders, including the 2001 Nobel economics laureate Joseph Stiglitz and Danish Prime Minister Poul Rasmussen.

    On the final day of the Forum, delegates launched a 10-point plan aimed at reversing the trend of job losses. The plan seeks to marshal such forces as international trade, information technology, entrepreneurship, environmental sustainability, monetary and fiscal policy, education and training, health and safety, labour market policies, social protection and social dialogue to create jobs and alleviate poverty.

  • New Zealand representatives sent to the Global Forum were Anne Knowles, Executive Director of Business NZ (formerly NZ Employer's Federation) and Paul Barker and Julian Woods from the Department of Labour.

  • Internet Bookmarks.
    Global Employment Forum homepage http://www.ilo.org/public/english/employment/geforum/index.htm
    report image

    "A Global Agenda For Employment "
    — Discussion Paper


    download full document
    PDF file ( 374 KB)

  • Juan Somavia says that a major economic downturn was already under way before the terrorist events of September 11. But the attacks on America has made the situation much worse as "fear and insecurity" drive the economic downturn much deeper.

    He says that the estimates of job losses and declining growth since September 11, though dire, could still be "conservative". The airline industry, in particular, will take years to recover after more 200,000 of its 4 million global employees lost their jobs after the attacks. Another 9 million jobs could be lost in the hotel and tourism industry if the economic downturn continues.

  • U.N. Secretary General Kofi Annan told the Forum that the aftermath of the September 11 attacks on the United States went "far beyond peace and security concerns", and he warns of "severe and multiple" effects on the job market and the poor.

    Annan, who is this year's Nobel Peace Prize laureate, says: "Nobody can forecast with precision the economic and social consequences. We may never be able to say exactly how much worse the global economic outlook has become because of the September 11 tragedy. But we can say that the consequences of these events — in terms of falling commodity prices, political tension, lower oil prices, lower investment, loss of tourism revenues, escalating trade costs and movements of refugees — will take their toll on many of those who can least afford it. We know that poor economies will pay the highest price, and that millions of people will become more vulnerable to poverty than ever before…"

  • Former US Secretary of Labour Robert Reich was a keynote speaker at the Forum. He says that just as the United States is working with other nations to fight global terrorism, it should also be working with them to stave off a global economic meltdown. Reich: "A worldwide recession isn't as violently destructive as terrorism, but it can cause much hardship. Preventing it requires no less of a commitment to a global strategy…"

  • ILO documents released at the Forum show:
    — 1 billion people globally who are either unemployed, underemployed or "working poor" and living on less than one dollar a day.
    — the 1.7% average annual growth of the world's workforce over the past decade had outstripped the 1.4% annual rise in global employment. This means that the global economy has only created about 40 million jobs a year for the 48 million annual new entrants to the labour force.
    — the global economy will need to accommodate half a billion more people in the labour forces of developing countries over the coming decade.
    — over 97% of new job seekers in the next decade will come from these developing countries, with 65% of them in Asia.
    — there are an estimated 66 million unemployed young people in the world today
    — an increase of nearly 10 million since 1995
    — and these young people make up more than 40 percent of the world's total unemployed.

  • Many participants at the conference were concerned that the US recession and the worldwide economic slowdown were having a detrimental impact on globalisation. During recent months, the rate of direct foreign investment has dropped by 40 per cent, mainly in the industrialized nations.

    Daniel Funes de Rioja stresses that more countries and people need to benefit from globalisation. But he adds: "If developed countries apply protectionist measures based on their political, economic or social needs to avoid or reduce their unemployment rate or to balance their national budgets, how can developing countries believe in globalisation and free trade?"

  • The ILO Director-General argues that international organisations must confront the fact today that globalisation is facing a crisis of legitimacy. Juan Somavia: " It is sad that the policy debate on globalisation has so frequently become blocked in polemics. It would be interesting just to ponder on what the results of a world referendum on today's model of globalisation might be. It could cast light on the silent sense of powerlessness felt in so many families around the world. That is at the heart of the legitimacy question."

    " International organizations have a responsibility to deal creatively with this reality. It is in times of crisis that we are given the opportunity to think differently. If this means daring to step out of the cage of our orthodoxies, then let's dare. We must bring to bear the strength of our different mandates and the experience of our constituents…"

  • This year's Nobel economics laureate Joseph Stiglitz, of Columbia University, spoke to the Forum and called on the international community to push for decent work, for full employment and better working conditions. He says that labour policies in many countries have been "subsumed" under broader economic policies often dominated by commercial and financial interests.

    Stiglitz: "For too long, labour has acquiescent, sometimes becoming an even more effective advocate of the policies than those whose interests they serve. Let me be clear: what I am calling for is not the return to class warfare but a simple recognition of long standing principles — that there are trade-offs, that there is uncertainty, that different policies affect different groups differently, that the role of the economic adviser is to inform policymakers of the consequences of different decisions, and it is the role of the political process to make those decisions."

  • Later, at a special forum organised by the International Herald Trubune, Stiglitz outlined a broad five-point plan for economic revival and saving jobs in the United States:
    first, begin with the major source of uncertainty in unemployment, and extend unemployment coverage and benefits for workers.
    second, have a temporary investment tax credit ... temporary, because it would be designed to encourage people to invest now, when there is this real need.
    third, introduce tax rebates directed at investment. Specifically recommended are tax changes that allow companies to do more backward averaging. Firms that have paid a lot of taxes in the past, but are willing to invest now, can use some of that backward averaging if they are going to commit to investments.
    fourth, avoid making the economic downturn worse by austerity measures that require cutting spending at the very time we need to increase it. Stiglitz says this is being seen in the developing world, with the austerity measures imposed by the International Monetary Fund, and also seen in the US where almost all the states have "balanced budget amendments." Instead, he recommends a temporary, very large, revenue-sharing program as a way of getting money out into the economy.
    — and fifth, more public investment. Identify some areas of public expenditure that have been starved, such as schools and research, which are cyclically sensitive and where investments can be made quickly.

  • stiglitz.jpg - 12860 Bytes Stiglitz says that if you go back to when the IMF was established, it was under the influence of the economist John Maynard Keynes at the end of World War II, when there was a real fear of going back to a global depression. In this context, there was a recognition that there might be a need for an increase in global liquidity.

    Stiglitz: "The IMF created the idea of SDRs [Special Drawing Rights], which was like spending power that could be allocated to deal with insufficient aggregate demand in the world. I think now is a time in which it would be appropriate to restore the SDR — like a global money-supply increase that could be allocated to the developing countries. We have a framework to do it if the IMF, instead of trying to push these countries into deeper recession, would allow this money to go out into the poorest countries of the world. Then it could be a source of economic resurgence."

    Sources _ BBC News 4 November 2001 "Warning of job loss "tidal wave" by Imogen Foulkes (news.bbc.co.uk);BBC News 1 November 2001 "Job losses to hit 24 million" (news.bbc.co.uk);United Nations Foundation UNWIRE 1 November 2001 "Employment: Annan stresses plight of poor following terrorist attacks" (www.unfoundation.org);UN Global Compact "The Secretary General address to the Global Employment Forum" Kofi Annan 1 November 2001 (www.unglobalcompact.org); ILO Press Release 31 October 2001 "ILO to address global jobs crisis" (ILO/01/43); ILO Press Release 1 November 2001 "UN Secretary-General, ILO Chief urge global jobs alliance" (ILO/01/44); ILO Press Release 2 November 2001 "Nobel Laureate Calls for Decent Work, Basic Labour Rights" (ILO/01/45); ILO Press Release 3 November 2001 "ILO Employment Forum Calls for Global Jobs Rescue Packages" (ILO/01/46); Speech of the Director-General at the Opening Session of the Global Employment Forum 1 November 2001 "Promoting Decent Work in Times of Uncertainty"; International Herald Tribune 7 November 2001 "IHT Roundtable Advice for a recovery: Tax Cuts, and Layoff relief" edited by David Ignatius

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