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Sharp economic downturns and financial shocks wreak havoc on labour markets and incomes. In the most severe cases, they may also increase social tensions and weaken the legitimacy and hold of government institutions. In recent years, as globalisation has proceeded, national economies’ susceptibility to crises has seemed only to increase. The 1995 Tequila Crisis in Mexico, the 1997 financial crisis in Southeast Asia, the 1998 financial and economic shocks in Russia and Brazil, and the 2001 Argentine crisis have dramatically illustrated the vulnerability of economies to powerful global forces.
Dissatisfaction on the economic front has, in turn, put pressure on democratic transitions as well. It is now clear that growth, decent jobs and socio-economic progress cannot be seen as automatic products of liberalisation and stabilisation. Instead, these policies can have unpredictable, sometimes negative effects on employment. But through support and assistance from Argentina to Thailand, the ILO has proved the fundamental value of decent work and tripartism for economic recovery.
In severe downturns, the ILO aims to help countries pull out of recession and build a foundation for strong economic development. The organization encourages employment-intensive growth and seeks to put social protection at the core of economic policy. Fostering social dialogue and promoting the ILO’s comprehensive labour standards are also key elements. In countries experiencing difficult social and political transitions, the ILO can respond to several important concerns. These include social and employment discrimination, the exclusion of workers’ and employers’ organizations, socio-economic vulnerability, income inequality, unemployment and underemployment, unequal access to productive resources, difficulties meeting basic needs, and poor social protection.
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