Events in the international community

United Nations General Assembly

57th Session, New York, 2002

Statement by John Langmore,
Representative to the United Nations and Director, ILO Liaison Office, New York

Agenda Item 98: Social development, including questions relating to the world social situation and to youth, ageing, disabled persons and the family

In this discussion on social development I will concentrate on two crucial themes: the importance of integrating economic and social policy which was the principal theme of the Commission for Social Development this year, and the centrality of growth of opportunities for productive work - employment growth - as both a crucial example of that coherence of economic and social policy and as one of the principal requirements for effective poverty reduction.

The discussion is crucial because the traditional dichotomy between economic and social policies is a perverse basis for solving the major social and economic problems in the current era of globalization. This dichotomy between economic and social policies has often led to sub-optimal policy choices. For instance, it has contributed to the relative neglect of a rigorous prior analysis of the social impact of economic policies in spheres such as macroeconomic stabilization, structural adjustment, and the transition to a market economy. This has resulted not only in inflicting excessively high social costs but has also both undermined the economic effectiveness of the policies and also sowed the seeds for their failure through the social conflict and political instability that has been generated.

A narrow economic approach to macroeconomic, structural and microeconomic policies has resulted in inferior economic and social outcomes in instances such as the following:

These are all examples where the prevailing approach of giving primacy to narrowly focused neo-liberal economic policies, on the assumption that employment, distributional and other socio-economic goals can be dealt with subsequently, has proved to be illusory.

In contrast, more integrated approaches, which consider economic and non-economic factors simultaneously and equally, are likely to be more effective. A basic reason for this is that what are traditionally considered non-economic factors such as basic rights and participation, social and political institutions, and the degree of inequality and socioeconomic security, exert a strong influence on economic efficiency and outcomes. These socio-economic factors are in turn affected, for better or for worse, by the choice of economic policies. An integrated approach that considers economic and non-economic factors simultaneously is thus likely to yield both better economic and distributional outcomes.

A major advantage of an integrated approach is that it can reap the full benefits of policy complementarity. Simultaneous progress in achieving economic growth, reducing inequality, improving socioeconomic security, strengthening basic rights and democratic governance and developing sound institutions necessary for the efficient functioning of markets can all be made mutually supportive.

The central goal of growth in opportunities for decent work – employment – illustrates these points. Growth of employment is the goal that embodies most fully the integration of social and economic policy. Growth of employment has become the highest priority for national and international economic and social policy. Growth of employment will contribute more to increasing personal, social and national economic security, to reducing waste, to increasing efficiency, to improving equity, to reducing poverty and to strengthening social integration, than any other economic or social achievement. Income from employment in its widest sense, including self-employment and sustainable livelihoods, is the predominant determinant of the economic welfare of most of the population. Without access to productive work, poverty is insurmountable.

Yet in most countries unemployment and under-employment are disastrously high. Globally close to a billion people are either unemployed or under-employed, which is approximately 30 per cent of the world's entire workforce. One hundred and sixty million people are openly unemployed. Of every 100 workers worldwide, six are unemployed and another 16 are unable to earn enough to get their families over the most minimal poverty line of $1 per day.

The rate of growth of employment is in part a political choice, a question of the priority and strength of commitment which is given to expanding opportunities for earning a decent income. It is important to be clear about this fact of choice and not resign ourselves to believing that there are immutable laws of nature that dictate that particular rates of unemployment are inevitable. The first and principal requirement for finding a solution is adoption of the goal of full employment. The special session of the General Assembly on social development in Geneva reiterated the importance of promoting ‘the goal of full employment as a basic priority of our economic and social policies.’

When countries and the international community adopt that goal, all policies evolve. The four themes adopted by the Secretary-General’s Youth Employment Network as the basis for their recommendations illustrate major aspects: job creation; entrepreneurship; increasing employability and freedom from discrimination.

A national commitment to employment growth leads automatically to inclusion of a national employment strategy in the national economic and social plan. In 1997 the Commission for Social Development commended the setting of time-bound quantitative targets for employment growth as a means of expressing the priority to be given to employment growth in national strategy.

Employment growth automatically becomes a central element in macroeconomic policy. No longer can stabilization be considered simply in terms of reducing inflation. The even greater waste of lost human potential must become a central focus. Within limits set by a monetary policy aimed at maximizing access to credit and minimizing interest rates especially for small business, spending on education – basic, full primary, secondary and technical – would be maximized and support for training strengthened. Many countries might want to expand support for agriculture through improved infrastructure, extension services and marketing arrangements. Human services such as education, health and care for the young and the old are the most labour-intensive, and their expansion will contribute mightily to employment growth.

Small, local public works are an important means of employment creation. Other spending would be rigorously scrutinized for its social impact. Progressive tax policies contribute most to stimulating demand because of the higher propensity of lower income earners to consume. Improvements in access to financial services can contribute to increasing essential domestic savings. A policy instrument which combines equity with economic responsibility but which is sometimes forgotten is promoting consensual, equitable approaches to income determination through social dialogue.

It is vital that richer countries support such policies with greatly increased aid, debt cancellation, widening and deepening of global public goods, increased market access for developing country exports, and the more equitable participation of developing countries in global governance. In any case there is significantly greater scope for employment generating policies and practices through independent action by individual countries. The principal requirement is determined, sustained commitment to the goal of full employment. This is perhaps the most important requirement for the comprehensive integration of economic and social policies.