22nd June 2009

Bridges Weekly | ILO Summit Inks ‘Global Jobs Pact’

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Heads of state, ministers, and labour specialists from over 160 countries discussed job creation strategies at the International Labour Organisation’s Summit on the Global Jobs Crisis, held 15-17 June in Geneva.

At the heart of the summit was the Global Jobs Pact, or GJP, an ILO proposal offering a multifaceted approach to creating and maintaining jobs. The Global Jobs Pact “is not an international legal obligation,” ILO Director-General Juan Somavia explained to reporters Monday. Instead, it is “based on a series of tried and tested policies which, if adopted in a comprehensive fashion, could reduce social tensions, protect people in the downturn and most importantly stimulate aggregate demand and prepare the growth of tomorrow.”

The GJP is “an open and evolving portfolio of policy options” available for governments, employers, and workers, according to a report submitted by Somavia to the International Labour Conference. The director-general’s proposed policy alternatives include credit flows for small and medium enterprises, unemployment benefits that promote job-seeking, and support mechanisms for disadvantaged youth. Conference participants discussed policy options and adopted the GJP at the meeting’s close. All nine heads of state that attended the Summit endorsed the Global Jobs Pact.

Another hot topic was the response - or lack thereof - from international financial institutions on the economic crisis. Speakers from around the world denounced the ‘Washington Consensus’, a term that loosely refers to the World Bank’s and the IMF’s policies toward developing countries and is associated with free-market economics.

Some criticisms were particularly direct. “Why should the IMF interfere in our social and development policies?” Alicia Barcena, the executive secretary of the Economic Commission for Latin America and the Caribbean, said to reporters. “The IMF is the lender of last resort and should not impose conditions that lead to problems in social systems, education and health. They must stop this prescriptive lending.”

Brazilian President Luiz Inacio Lula da Silva went off script during an address to the summit to bash the financial institutions, saying that the economic crisis will mark the end of the Washington Consensus. He observed that the IMF and World Bank have been offering ready-made solutions to poverty but argued that they had put forward no proposals to address the current crisis, a remark that brought loud applause from the audience. “We need to build a new world based on equitable distribution of wealth,” he said.

French President Nicolas Sarkozy stressed the need for long-term solutions to the crisis and called for greater regulation. “For those who think this is a temporary crisis, it’s a suicidal approach. We can’t wait … we have waited too long. We must act now,” he warned.

While the summit’s tone was not always negative, experts were under no illusion that job recovery would be easy. Raymond Torres, director of the ILO’s International Institute for Labor Studies, said in an interview before the meeting that recovery of the labour market may be slow, despite earlier signs of economic recovery elsewhere in the market.

“[W]e will still need to create at least 300 million jobs globally over the next five years just to maintain a pre-crisis level of unemployment,” he said.

The summit took place alongside the International Labour Conference, running 3-19 June and also sponsored by ILO.

ICTSD reporting; “ILO chief stresses need for adopting jobs pact, social protection,” TIMES OF INDIA, 16 June 2009; “Summit to make the future work,” THE NATIONAL, 16 June 2009, “ILO seeks Global Jobs Pact to abate crisis,” ABS-CBN NEWS, 15 June 2009.

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