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Joint IMF-ILO conference on growth, employment and social cohesion

The International Monetary Fund (IMF) and the International Labour Organization (ILO) are in a downbeat mood ahead of their joint high-level conference on 13 September 2010 in Oslo, Norway. A discussion document has been prepared for the event in which the organisations issue a stark assessment of the outlook for employment in the wake of the global financial crisis, saying that the world faces major challenges in creating enough quality jobs to sustain growth and development.

The one-day conference, to be hosted by Norwegian Prime Minister Jens Stoltenberg, will focus on “The Challenges of Growth, Employment and Social Cohesion”. It will bring together political, labour and business leaders and leading academics from around the world to explore new ways of forging a sustainable, job-rich economic recovery. Lead speakers include President Ellen Johnson Sirleaf of Liberia; Prime Minister George Papandreou of Greece; Prime Minister José Luis Rodríguez Zapatero of Spain; Finance Minister Christine Lagarde of France; U.K. Secretary of State for Labour Iain Duncan Smith; and International Trade Union Confederation (ITUC) General Secretary Sharan Burrow. The conference will be chaired by IMF Managing Director Dominique Strauss-Kahn and ILO Director General Juan Somavia.

“The Great Recession has created a painful legacy of unemployment,” Mr. Strauss-Kahn said, “and this devastation threatens the livelihood, security, and dignity of millions of people across the world. The international community must rise to meet this challenge. Now is the time for our collective action.”

“We are now seeing signs of a fragile recovery, but for millions of people and enterprises around the world the crisis is far from over”, Mr Somavia said. “A jobs-centred growth strategy should be our number one priority. Otherwise, the economic recovery may take years to reach those who need it most, or it may not reach them at all. We must connect our policies with people’s legitimate aspirations for a fair chance at a decent job”.

Two years after the onset of the global economic crisis, unemployment remains at record levels in many countries – the ILO estimates that unemployment is up by more than 30 million worldwide since 2007 – with little sign of an early decline. As world leaders seek the appropriate short-term and longer-term policy responses, the IMF and ILO have come together to stimulate discussion on the international cooperation and policy innovation that can improve the capacity of economies to generate enough good jobs to strengthen social cohesion. The conference paper is intended to promote debate, with an online discussion forum simultaneously being launched on the conference website (

The IMF and ILO have different mandates and constituencies and, as a result, they bring different analytical approaches to the working paper, which contains a joint overview; an IMF section on the human cost of recessions, and how to assess and reduce that cost; and an ILO section on building an employment-oriented framework for strong, sustainable and balanced growth.

According to the discussion document, its objective “… is to improve the integration of employment and social policies with international and national macroeconomic policy strategies … [and] … focus thinking and action on how to ensure that policies have the same priorities as people – more and better jobs.” It also highlights the importance of improving policy coherence which “… is likely to play a big part in finding a better way to shape a fairer globalisation.”

The IMF reports that “if the effects of past recessions are a guide, the cost to those who become unemployed could be a persistent loss in earnings, reduced life expectancy, and lower academic achievement and earnings for their children. And unemployment is likely to affect attitudes in a manner that reduces social cohesion, a cost that all will bear.” The IMF states that in terms of health, layoffs “are associated with higher risk of heart attacks and other stress-related illnesses in the short run. In the long run, the mortality rate of laid-off workers is higher than that of comparable workers who kept their jobs.”

The IMF adds that “a recovery in aggregate demand is the single best cure for unemployment.” It states that “as a general strategy, most advanced economies should not tighten fiscal policies before 2011, because tightening sooner could undermine the recovery. The consolidation plans that these countries have for 2011 imply an average change in the structural balance of 1¼ percentage points of GDP. Clearly, however, the fiscal situation varies across countries, requiring adaptation of this general strategy to the available fiscal space.” Monetary policy can also remain supportive of aggregate demand as inflation pressures remain subdued.

The ILO also refers to public debt challenges many countries are facing in the working document, warning that “a premature fiscal retrenchment could damage growth and lead to even larger deficits and debts”. It also calls for “well-sequenced coordinated short-term exit strategies and deficit reduction policies”, adding that they are linked to “a progressive recovery of the real economy and jobs and are fair in the sharing of the benefits and burdens of adjustment, especially in the protection of the most vulnerable.”

The ILO goes on to explain that the pressures of globalization have increased the vulnerability of workers through increased intensity of work, a shift towards more flexible contracts, diminishing social protections, and decline in workers’ bargaining power and voice, adding: “Improving the quality of employment – more productive jobs offering better earnings – is also essential to sustain poverty reduction and development”.

Global March welcomes the presence of the ITUC General Secretary to strengthen the voice of the workers at the conference as there is a certain amount of irony in some of these statements from the IMF whose structural adjustment policies in the past have contributed to the erosion of social cohesion and increase in unemployment, particularly within the public sector which suffers most from austerity measures. The statements that unemployment leads to health problems among affected workers and will affect the academic achievement of their children are somewhat obvious and these issues are among the factors that push children into the world of work prematurely cited by many organisations, including the ILO itself.

In addition, the IMF and the ILO should be aware that several industrialised economies have already tightened their fiscal policies and the burden of taxation will continue to erode consumer confidence in these countries. The above statements by the IMF and the ILO would therefore appear to be a case of “shutting the stable door after the horse has bolted”. It will be vital through the ITUC to have the voices of workers, their families and vulnerable communities heard at this conference and that strong, practical and achievable policy and programme recommendations emerge.

“Governments all over the world are struggling with the impact of the economic crisis,” said Global March Chairperson Kailash Satyarthi, speaking following the announcement of the IMF-ILO conference. “We hope that in the light of the references from the IMF in particular to the devastating impact of unemployment on workers and their families that this might be an indication of its intention to pay closer attention to the need for a fairer globalised economy. We also hope that this means that people, their needs, aspirations and expectations will be put at the heart of economic recovery. People, and children in particular, must be the main priority, otherwise this crisis could set back human development years.”

To download the conference paper, click here

To visit the conference web site, click here

Source: ILO

Global March Against Child Labour - From Exploitation to Education

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