ILO calls for balanced response to address debt crisis
International Labour Organization (ILO) Director-General Juan Somavia
has called for a “balanced” policy strategy aimed at securing a
“jobs-rich” economic recovery in the face of new threats to the global
economy from the sovereign debt crisis and fiscal retrenchment.
Speaking at the opening of the ILO’s 99th International Labour
Conference, Somavia warned that the recent debt crisis and deficit
reduction measures, mainly in social spending, could “directly affect
jobs and salaries” at a time of weak economic recovery and continued
high levels of unemployment.
Somavia called for a “balanced policy convergence strategy” based on
three elements: securing a job-rich recovery, moving onto a path of
strong, sustainable and balanced growth, and addressing the structural
imbalances of the global economy that existed before the crisis.
“We need to act on all three objectives together in a harmonious way
within a short, medium and longer-term perspective,” Somavia said. “They
are all interconnected. So we don’t have ‘either or’ options”.
“The immediate danger of a simultaneous fiscal retrenchment in a
significant number of countries is to slow down Europe’s weak recovery
even more,” Somavia said. “In turn, this would damage in different ways
growth prospects around the world. A contagion effect cannot be ruled
out.”
“There is no doubt that the public debt and public deficit problems
of many countries are real and need to be dealt with, as both a national
and a global stability issue,” he said. “The question is how and in what
time frame.”
Somavia addressed the opening of the Conference against a backdrop of
new concern over the continuing global jobs crisis, that had elevated
global unemployment to more than 210 million, or its highest level ever
recorded, according to his report “Recovery and Growth with Decent
Work,”
Somavia noted that the ILO had seen no indications of a reduction in
the global rate of unemployment this year, despite signs of an economic
recovery.
The Conference was expected to discuss progress on a Global Jobs Pact
adopted last year during a Global Summit of heads of state and
government in response to the crisis. The Pact has been endorsed by the
international community, including the G20 Leaders’ Summit in
Pittsburgh, and formed the basis of recommendations adopted by G20
ministers of employment and labour in Washington in April.
“The tripartite ILO has a responsibility to play its full part in
finding a way forward. We bring two essential ingredients to the
process: balance and dialogue.”
He called on governments’, workers’ and employers’ delegates from the
ILO’s 183 member States to set in motion “a coordinated, orderly,
balanced and credible long-term process to deal with the public debt and
deficits according to each country’s situation and within a convergent
international pattern.”
Somavia warned that “too much, too fast, will damage job prospects
and the real economy, make it much harder to stabilize public finances
and risk a double dip recession”.
Noting that more people in work with rising earnings would translate
into more tax revenue, less unemployment-related spending and a
narrowing of deficits, he called for an “employment-oriented framework
for strong, sustainable and balanced growth.” “This will also require
tackling a number of deep structural imbalances within and between
countries which will impede sustainable development in the longer term.”
“Social tensions continue to rise,” he said. “There was already much
anger and frustration over a ‘job weak’ recovery,” he said.
“Today, our culture of social dialogue founded on respect for
workers’ rights is needed more than ever.”
In addition to the Global Jobs Pact follow-up, the Conference is to
discuss the contribution of employment policies to social justice for a
fair globalization, as part of an integrated approach to decent work.
Delegates will seek to identify priorities for the future work of the
ILO.
“In the critical period ahead, many public and private policy options
will involve choosing between human values and market values; between
the interests of the financial sector and those of the productive
economy; between what sections of society bear the brunt of the costs of
the crisis, and how the most vulnerable can be better protected and
empowered,” Somavia said.
Geneva (ILO News)
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