G20 and the real economy: What’s at stake
GENEVA - The G20 Leaders Summit in Toronto was again held at a
critical juncture.
Despite a fragile economic recovery, global unemployment is at its
highest level ever, at more than 210 million and we will need to create
470 million new jobs in the next 10 years to absorb new entrants into
the labour markets.
Youth unemployment has reached unacceptable levels. Gains in reducing
the number of working poor living on less than $1.25 per person per day
are being reversed. The informal economy and vulnerable work are
swelling.
Perceptions of social injustice - once seen as mainly a problem of
the developing world -are spreading fast in many developed countries.
Tensions and social unrest are increasing in the form of public
protests against austerity measures and for jobs.
There is still time to turn this situation around. But we must make
the right choices. Up until eight weeks ago the “Pittsburgh Consensus”-
decisions taken by the G20 at their summit in that city last September -
was on track as the right approach to the crisis: putting quality jobs
at the heart of the recovery and gradually withdrawing stimulus measures
as the economic and jobs recovery took strong hold.
Suddenly, however, the agreement on this economic and social approach
has come under pressure. Concerns over the sovereign debt crisis and
growing deficits in Europe have prompted decisions to cut social
spending, moves to raise taxes and the pursuit of significant austerity
measures.
History shows that doing this can jeopardize the very recovery we are
trying to achieve. And we also know that such measures will certainly
slow down jobs recovery in the short run.
These concerns dominated the discussions at the just-concluded
International Labour Conference, the annual meeting of the ILO.
The Conference is a unique gathering of more than 4,000 Government,
employer and worker representatives - representatives of the “real
economy.”
Their voices expressed concern, fear and frustration over the
evolution of the crisis response, and the possibility that even meagre
gains made so far in economic recovery may be lost in terms of creating
jobs, sustaining enterprises and supporting the unemployed.
Their expectations can be summarized in the following points:
First, we need a balanced policy convergence strategy that protects
and promotes productive investments and job-rich growth in a fiscally
responsible manner.
Second, we need growth that generates decent jobs. That means
building further on the Pittsburgh commitments to “put quality jobs at
the heart of the recovery.”
Third, we must make sure that people - especially young workers -
have the necessary skills to fill the jobs that are created.
Fourth, job creation must be a targeted goal for Governments
alongside low inflation, sound fiscal policies and other macroeconomic
objectives.
Fifth, and very importantly, we need a financial system that works
for the real economy, not the other way around.
Global growth is expected to reach around 4 percent this year, but
what does that matter to a worker who cannot get a job or has weak
social protection in times of crisis? And what about the small
enterprises that have difficult access to credit and cannot benefit from
the mild economic recovery that is underway? These are questions we
should be answering.
The bottom line is that the only sustainable way out of the crisis is
by reactivating the real economy, creating more jobs and thus increasing
Government revenues.
At the same time we certainly have to address the issue of fiscal
deficits and sovereign debt which requires medium and long-term
sustainable solutions. But we must start now. Countries, according to
their own circumstances, can formulate balanced, gradual and credible
exit strategies from the stimulus measures that rescued the global
economy from an ever deeper recession, and that have saved or created
tens of millions of jobs since the start of the crisis.
I must express the strong support of ILO constituents for the
responsibilities that the G20 have decided to take on and consequently
the difficult tasks ahead.
The message coming from them is the importance of political and
social dialogue, nationally and internationally, to find the right
balance of policies to deal with all these issues. What is at stake is
the future of the real economy.
(ILO News) |