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ILO head says social protection is key for crisis-recovery

The head of the ILO says social protection measures are essential in battling the economic crisis as they create demand, while austerity, on the other hand, is taking a heavy toll.

Press release | 09 May 2012
GENEVA (ILO News) – ILO Director-General Juan Somavia has described social protection as “a very fundamental” tool for crisis-recovery efforts, while highlighting the “enormous” social costs and tensions created by hastily-adopted austerity plans.

“Social protection as a crisis instrument is a very fundamental tool because it actually increases economic demand,” he said at a meeting in Geneva. “Social protection measures are also essential for battling poverty, and the vision of social protection floors is rooted in the fact that 75 to 80 percent of people around the world do not have social security,” he added.

He underscored the “multidimensional” impact of social protection measures, saying that “they protect, they empower people enabling them to move into the labour market, they serve as economic stabilisers....”

"Under the pressure of financial markets, some governments are being forced to adopt austerity plans hastily, without consultation, with enormous social costs" says Juan Somavia.

Mr. Somavia stressed that social protection for the most vulnerable makes an immediate impact on people’s lives and the economy – contrary to tax cuts – which mainly benefit the wealthier and better off but do not create demand.

He described the growing polarization that could be observed in different contexts and called for new policy approaches and strengthened social dialogue in order to deliver new and more balanced solutions.

“The global crisis appears to have mutated into a new phase. Under the pressure of financial markets, some governments are being forced to adopt austerity plans hastily, without consultation, with enormous social costs”, he said. “We have already seen negative consequences for workplace relations through strikes, street protests, deteriorating social climates, and the growing spectre of societal conflict.”

“In Europe, austerity measures – adopted in a bid to slash unsustainable budget deficits – are taking their toll”, he added.

“There is a growing disconnect between citizens and governments. I believe that social protection floors will be indispensable in moving towards models of growth that are inclusive and just,” said Mr. Somavia while observing that developing countries that invested in social protection have emerged faster from the crisis than those that have not.

The upcoming International Labour Conference (ILC) in Geneva is expected to consider the adoption of a Recommendation on national social protection floors that will provide guidance to member States.

Somavia recalled that delegates to last year’s ILC agreed that social protection floor policies “should aim at facilitating effective access to essential goods and services, promote productive economic activity and be implemented in close coordination with other policies enhancing employability, reducing informality and precariousness, creating decent jobs and promoting entrepreneurship.”

“If adopted by our Conference (ILC), the Recommendation on Social Protection Floors will go a long way in helping to translate this concept into reality by establishing a common framework for its diversified national applications,” concluded Mr. Somavia.

The ILO Director-General was speaking at a meeting organized by the ILO in partnership with the International Association of Social and Economic Councils and Similar Institutions.