ILO is a specialized agency of the United Nations

273rd Session
Geneva, November 1998


Report of the Committee on Employment
and Social Policy

1. The Committee on Employment and Social Policy met on 9 November 1998 and was chaired by Ms. Sarmiento (Government, Philippines). The Employer and Worker Vice-Chairpersons were Mr. Katz and Mr. Ito respectively.

2. The Committee had the following agenda:

3. Following a proposal by the Officers of the Committee, who viewed the global financial crisis and the ILO's response to it as the Committee's foremost concern, the Committee decided that items 1, 4 and 6 should be discussed together. Owing to lack of time, the Committee was unable to consider agenda items 2, 3, 5 and 7.

4. Mr. Amjad (Chief of the Special Team for the World Employment Report) introduced the Office paper on agenda item 1(a). The major messages in the World Employment Report 1998-99 were the worsening open unemployment and underemployment in many parts of the world, accompanied by immense hardship, suffering and social tension; the unacceptable face of market-driven globalization and the neglect of institutions and social infrastructure that would ensure sustainable and equitable growth; the critical role played by an educated, skilled and adaptable workforce to ensure workers' employability and increased enterprise efficiency, and their ability to seize the opportunities offered by globalization and new technology; the equally important role of training in enhancing employability and reducing discrimination in access to training for vulnerable groups and in addressing the needs of informal sector workers. Education and skills development were essential but not sufficient conditions for employment-intensive growth. The best results were achieved in an overall growth-promoting environment and when training decisions were taken in close consultation between government, employers and workers. The ILO estimated that by the end of 1998, over 1 billion workers out of a total labour force of 3 billion were either unemployed or underemployed. Of these, 150 million were searching for work in vain. The major reasons for high and rising unemployment and underemployment were the East Asian crisis; far-reaching structural change and brutal restructuring in the transition economies which had been unable to sustain their demand for labour; the high growth of labour supply in a context of slow economic growth and few job opportunities in South Asia and Africa and jobless growth that had had limited impact on unemployment, e.g. in Latin America. The World Employment Report stressed the need for flexible and adaptable training systems through mutual cooperation and social partnership between employers, workers and government. Globalization and rapid technological and workplace changes raised the demand for skilled labour and called for different skills from those in the past, including multiple skills that enhanced workers adaptability in the workplace and required enterprise-level, lifelong learning. All training systems were under pressure. Paradoxically, the forces that led to higher demand for skilled labour also reduced opportunities for training as long-term employment relationships were undermined and low-skilled workers were excluded from employment. The report emphasized that excessive reliance on market forces would tend to lead to under-investment in skills due to poaching and other market failures and would result in a low-skill/low-wage equilibrium. In particular, small, medium and micro-enterprises were disadvantaged, yet they created most new jobs. The report identified the main features of well functioning training systems: social partnerships; co-financing; cost-effectiveness and market tests in training provision; and certification of skills and competencies for improved mobility in the labour market. In particular, a range of supporting measures was necessary for the socially excluded to assist them in finding a foothold in the labour market. Examples of such measures were affirmative action programmes to support lifelong learning for women and provide them with better access to on-the-job training; educational support; subsidized work and job-search assistance for young people looking for their first job; mutually supportive measures for the long-term unemployed; lifelong learning for older workers; improving the capacity of informal apprenticeship to provide upgraded skills for informal workers combined with improved access to credit and institutional support; and addressing the needs of the disabled through employment schemes and sheltered work.

5. Mr. Rodgers (Chief of the Training Policies and Systems Branch) presented the Office paper on agenda item 1(b). He emphasized the ILO's comparative advantage, built up over the years, in addressing training issues and using tripartism and social dialogue as the institutional framework for accommodating diverse interests in training policy and systems development. The World Employment Report could help the ILO reinforce its support to constituents at the national level, develop its operational capabilities in new areas, and promote ILO values in training policy work and training institutions. Possibilities for follow-up included using the report as valuable input to preparations for the general discussion on human resources development at the International Labour Conference in 2000. Building on the ideas in the report, the ILO hoped to advance on three fronts: promoting social dialogue and partnerships involving ILO constituents in training; reflecting regional concerns and priorities by holding preparatory regional meetings; and examining whether these training issues should be incorporated in a new Recommendation on training should the Conference wish to pursue the idea. Secondly, the report emphasized the need to strengthen links between training systems and enterprise needs. The ILO intended to compile information on successful training practices; pursue research on institutions that can effectively support lifelong learning for an increasingly mobile workforce; and identify ways and means of supporting and improving skill development in small enterprises and the informal sector. The ILO could also be influential in promoting international standards for competency-based training. Thirdly, the report stressed the role of training in promoting equal opportunities and social and economic inclusion. The ILO needed to promote policies that countered and compensated for gender discrimination in labour markets. The ILO could invest more in evaluating alternative school-to-work policies and institutions, notably apprenticeship systems involving workplace experience. The ILO could also contribute in designing packages of complementary policies for overcoming poverty and social exclusion. Finally, the ILO could develop better methods of collecting training data and compile internationally comparable training and employment information. Many of these ideas were incorporated in the draft Programme and Budget proposals for 2000-01, but could also guide the ILO's work in the medium term.

6. Mr. Radwan (Director of the Development Policies Department) presented the Office paper on agenda item 4(a). He recalled that the challenge of job creation was as acute as ever, and that it had even attained greater urgency in a context characterized by massive unemployment and underemployment and pervading poverty in so many countries. Such high levels of unemployment were associated with economic reforms that may have been necessary to stimulate economic growth, but which had also shown the inability of the formal sector to create sufficient jobs to productively absorb the supply of labour. Debt crises, economic and financial crises and crises in countries emerging from armed conflict had become the norm rather than the exception. The need for employment-intensive growth strategies was obvious, and the ILO had played a constructive role over the past two decades in promoting the use of employment-intensive methods, particularly in public investment programmes in the infrastructure and construction sector. This sector was indeed particularly important for job-creation policies --  in developing countries it accounted for some 2 to 8 per cent of GDP, and between 40 and 70 per cent of total public investment -- and lent itself to playing a catalytic role in promoting employment, linking employment policy more directly to investment policy; in stimulating the local construction industry, by improving their access to public markets; in ensuring that greater employment creation in the private sector was accompanied by improved working conditions and in developing social dialogue and transparency in the context of private sector execution of public works. The results of the programmes supported by the ILO over the last ten years had shown the remarkable economic and social advantages of labour-based approaches to public investment in infrastructure, in that they: were 10 to 30 per cent cheaper than more equipment-intensive approaches; they required 50 to 60 per cent less foreign exchange; and created two to four times more employment, without compromising on quality. In fact, this approach developed by the ILO's Employment Intensive Programme referred to in the Office paper had given the ILO a comparative advantage in that it had demonstrated successfully that it was indeed possible to link more directly employment promotion, poverty alleviation and private sector development on the one hand, with social progress, better working conditions and improved democratic processes, on the other. The ILO had operated major shifts in its policy advisory and technical cooperation programme in this area, including the shift from relief, emergency or "special" public works schemes to longer-term structural employment generation programmes linked to cost-effective investments and economic growth; the shift from government-executed public works to increased private sector execution of employment-based public works; better integration of economic and social objectives, and particularly of investment and employment policy; greater emphasis on the inclusion of the relevant labour standards in contract documents to protect workers in an increasingly competitive private sector environment and promotion of the principles of organization and negotiation between the social partners, including those working at the border between the formal and informal economy. The current portfolio of the ILO's extra-budgetary employment-intensive programme was of the order of 60 million dollars, with annual expenditure of approximately 10 million dollars, and requests from member States for technical assistance and advisory services in this area were growing.

7. Mr Henriques (Chief of the Entrepreneurship and Management Development Branch) presented the Office paper on agenda item 4(b). He stressed that small and medium-sized enterprises currently created 80 per cent of all new jobs, and generated 50 to 80 per cent of existing jobs in a large majority of countries. However, the overall quality of these jobs was often inadequate, particularly in developing countries and transition economies. In addition to low productivity, small and medium-sized enterprises in these countries often offered poor working conditions and their workers lacked basic social protection. Inadequate labour relations and the use of child labour also characterized such enterprises, particularly the micro-enterprises. Achieving the dual objective of creating more and higher-quality jobs was at the core of the ILO's mandate and fully justified the Office's involvement in this important area. To this effect, the improvement of job quality at all levels was part and parcel of the ILO's efforts relating to the development of small and medium-sized enterprises and cooperatives. In designing its programmes on the development of small and medium-sized enterprises and cooperatives, the ILO strived to promote cost-effective approaches which maximized outreach and impact, and paid special attention to the long-term sustainability of small and medium-sized enterprise support structures. While quantitative indicators of the results achieved to date were of interest, it should be emphasized that the main role of the ILO's small enterprise programme was to generate a multiplier effect by sharing best practices with the social partners and other decision-makers at the international and national levels. The cost per job created in ILO technical cooperation projects ranged between US$42 and US$848. Women had been the main beneficiaries of these projects in a large number of cases (20 per cent to 70 per cent of the target groups were women, and 60 per cent of the 120,000 entrepreneurs who benefited from the Start and Improve Your Business programme were women). The qualitative aspects of jobs created in small and medium-sized enterprises were taken into consideration in the large majority of ILO projects (working conditions, social protection, elimination of child labour). Some such projects focused exclusively on this important issue. This was the case with a subregional project in Asia (Work Improvement and Development of Entrepreneurship), the establishment of a health insurance scheme for informal sector workers in the United Republic of Tanzania, and the preparation of training modules to promote social protection schemes for the owners and workers of micro-enterprises in Africa. A pilot project in ten African countries (initiated by the Entrepreneurship and Management Development Branch and the Bureau for Workers' Activities) worked through local trade unions and focused on promoting the creation of productive and sustainable quality jobs among workers who had lost their employment as a result of economic restructuring measures. Through the Bureau for Employers' Activities, the programme has established close relations with employers' organizations in several countries to further build their capacity to provide support and services to small and medium-sized enterprises. The total ILO technical cooperation programme for the development of small and medium-sized enterprises and cooperatives amounted to around 25 million dollars per year. Over the past five years, it was estimated that this programme had generated 250,000 jobs. Although this number may seem small in the face of the current unemployment situation, it demonstrated that much can be achieved by the social partners if more resources were allocated to similar programmes. To this effect, the ILO attempted to play a leading role in identifying and disseminating best practices in this important area, and to establish itself as a centre of excellence. It currently played an important role in a number of international fora involved in small and medium-sized enterprise research and development programmes, including the Committee of Donor Agencies for Small Enterprise Development. An important milestone in the ILO's work in this area had been the recent adoption of the Job Creation in Small and Medium-Sized Enterprises Recommendation, 1998 (No. 189). Subsequently, the ILO had launched the International Small Enterprise Programme, which would be the main vehicle for assisting member States to apply the Recommendation. The key challenges faced by the Office in the future consisted in developing innovative approaches that would improve the outreach, impact, cost-effectiveness and sustainability of its development programmes for small and medium-sized enterprises and cooperatives so as to respond to the growing need for new jobs. To this effect, it would put greater emphasis on developing integrated approaches focusing on both the quantity and quality of jobs.

8. Ms. Hagen (Deputy Director-General), presenting the Office papers submitted under the sixth item on the agenda concerning relations with the Bretton Woods institutions, indicated that the subjects of ILO competence covered in the four preceding Office presentations -- training, job creation, labour-intensive public works and infrastructure, and enterprise development -- were the kinds of technical subjects on which the ILO had had long and extensive cooperation with the World Bank, as reflected in the reports presented to the Committee concerning relations with the Bretton Woods institutions over the past few years, including the two reports in the current year. The difference today was that the attempts by the international financial institutions over the past year or so to deal with the expanding financial crisis in mainly economic and financial terms had led many to recognize that such a response was inadequate and that, to find effective solutions, there needed to be a far broader approach involving the basic social fabric of each country and the building of a social structure to mobilize support for those solutions. This new approach, which extended well beyond the issues of training and job creation, had been the focus of Mr. Wolfensohn's address to the annual meetings of the Boards of Governors of the World Bank and the IMF in October, where he proposed that there should be a system of social accounting in parallel to the usual financial accounting. This represented a dramatic change in the nature of the dialogue with the ILO, and had occurred in the direction that the ILO itself had sought and requested from the Bank and the Fund over many years. It now made possible more in-depth discussions on social participation and the role of core labour standards in the process of global economic development. Thus, the high-level policy dialogue, which the ILO had proposed be held and which had in fact been held with the Bank on 28 October, as reported to the Committee in the addendum to the main paper, was reflective of this new approach. The outcome of this dialogue, which was very substantive, should serve as a better basis for convergence in institutional thinking between the Bank and the ILO concerning the fundamental role of social participation and core labour standards in achieving social stability and economic growth. The policy dialogue had been with the Bank and had not involved the Fund, as the scope of the dialogue had differed with respect to the Bank and the Fund. With the latter, dialogue had progressed harmoniously, since the invitation of the Director-General to the Interim Committee in October 1995 following the World Summit for Social Development, on the shared premise that core labour standards were relevant and to be taken into account. The dialogue with the Bank, however, had not progressed so easily: in the light of its economic mandate, the Bank had been able to address issues of child labour and discrimination, but had had more difficulty with freedom of association and the right to collective bargaining. These difficulties were addressed in the high-level policy dialogue. In the dialogue, the ILO highlighted the role and usefulness of the ILO Declaration on Fundamental Principles and Rights at Work and its Follow-up, especially as a promotional instrument, in addressing these difficulties. This discussion should now pave the way for greater convergence in the future, and it was agreed that further discussions would be held. Among other things, the meeting also resulted in a joint commitment for the ILO to be consulted in the Bank's work on developing a social framework for development, which the Bank had already begun in a few countries, and to proceed with cooperation on a study with respect to the interaction between economic development and core labour standards. Cooperation was also under way on specific technical assistance projects related to the financial crisis, particularly with respect to public works and infrastructure in Indonesia, as well as other possible initiatives concerning Thailand, the Republic of Korea and other countries, including the Russian Federation. Other joint research initiatives were covered in the main report before the Committee.

9. The Employer Vice-Chairperson found the documentation submitted to the Committee rich, well-balanced and illuminating. However, he referred to the magnitude of the current crisis, and urged that the discussion in the Governing Body should concentrate on the extent of the ILO's impact on efforts to cope with the crisis and what more could be done. He welcomed the refreshing reference in the report on many things that the Employers had often reiterated, for example the repeated references to the need for flexibility. However, the report still contained remnants of the old thinking, for example in asserting that growth was sufficient for full employment. These old issues concerned mainly the developed countries of Europe and North America. The focus should be on the current crisis, which had brought misery and poverty to millions in developing countries. As the Workers had often pointed out, no amount of training could be a panacea if jobs were absent. It was not by focusing on the training issue that the ILO could expect to solve the crisis. The high-level dialogue with the World Bank and the IMF was welcome, but in the face of the real misery that prevailed in affected countries, the ILO should examine what impact its policy had on the people on the ground, particularly on those who had already been below the poverty level before the crisis. According to information available from employers from Asia, Africa and Latin America, the situation was desperate and the reversal of poverty trends was the major priority, together with employment creation. A comprehensive programme was needed comprising a range of policies to solve the problem, such as further trade liberalization, investment, macro- and micro-economic policy reform bringing labour-market reform and productivity gains.

10. Nevertheless, the World Employment Report provided some important insights: for example, that training should be based on a sound educational base and offer lifelong learning opportunities. He applauded its emphasis on demand-led approaches to training, but said that supply-led approaches should not be ruled out: foreign investment had often gone to countries that had offered a supply of well-trained people. The skills of Israel's Russian immigrant population had been a major factor in attracting Intel to invest there. The ILO had only limited resources compared to the Bretton Woods institutions. The Office could cooperate with those institutions and use its experience of job creation in small enterprises in order to ensure that social aspects were duly taken into consideration and that greater impact was achieved. Labour-intensive job creation in infrastructure investments and enterprise-based job creation were exactly areas where the comparative advantage of the ILO was significant as evidenced by the 250,000 jobs created through the ILO's small enterprise development programmes, although those figures represent a small fraction of the millions of unemployed people in the world. The ILO should take steps to move from experimental projects, which had been tested and had established appropriate policies and approaches, towards advising on the implementation of large-scale programmes. The Bretton Woods institutions were financing the macro-level reforms with millions of dollars, but could the ILO now move quickly to address the social issues on the ground in order to make a much greater difference than it had so far? The ILO should become involved in the social aspects of reconstruction programmes on the ground. There should be an outside evaluation of whether the ILO's activities had made a difference.

11. The Worker Vice-Chairperson emphasized the importance of training and of maintaining a balance between training demand and supply. It was important always to keep in mind that without job creation training was useless. He welcomed the well-prepared reports and their presentation which had involved an overhead projector. One area of concern, however, was that Office papers repeatedly referred to non-governmental international organizations and citizens' organizations, whereas for the ILO trade unions were traditionally at the core of social dialogue. The dialogue with the Bretton Woods institutions was very important, but what had it proved? A turning point had come, and it was hence now time for the ILO to make its views heard. This was the opportunity to reform those institutions, and there should be an appeal to governments and international institutions to see how to achieve this. The Workers' group was not happy that the report had not adequately analysed the economic crisis or evaluated the role of the Bretton Woods institutions in bringing about the current situation. There should have been more emphasis on the global economy and how it should be in relation to employment creation, and the ILO's view on the reform of those institutions should have been included. The Workers' group supported the expansion of government services to upgrade skills and the plans to supplement apprenticeship with training. He welcomed the opportunity to discuss, at the International Labour Conference in 2000, the much-needed fundamental reforms of basic education to ease young people's transition to work. The report rightly pointed out that consultations with trade unions and employers were appropriate in order to implement effective training systems. In discussing the ILO's activities to reform training systems, tripartite consultation was essential. The World Employment Report had failed to mention that structural adjustment programmes had reduced government expenditure on education.

12. He emphasized the importance of tripartite collaboration in training and the role of skill certification in ensuring its quality. However, it was important to avoid discrimination against workers who lacked certified skills. He emphasized that training was the main instrument to combat unemployment, provided that two conditions were met: economic growth and employment growth. The report had greatly underestimated the levels of unemployment and underemployment generated by the crisis: the global economy was on the verge of collapse. The measures taken by the IMF in the Asian crisis showed that the problems could not be dealt with by conventional means, but rather by the lowering of interest rates and large-scale employment planning with a focus on social development rather than economic policies and based on the outcome of the World Summit for Social Development. The emphasis now being placed on the reform of regulations governing the international financial system to promote greater transparency were welcome, but this would not stop the selfish speculative movements of capital seeking short-term profits. Further consideration of measures to limit short-term speculative capital flows, including, for example, the so-called Tobin tax, would be helpful in this regard. A collapse in one of the Latin American economies would have a domino effect throughout the region, and many gains would be lost. The same was true for Africa. The Heavily Indebted Poor Countries initiative (HIPC) was ineffective and should be replaced. The Bretton Woods institutions now faced unprecedented criticism, and the ILO now had a unique opportunity to seek appropriate reforms and to reassert itself as the highest authority on labour and employment issues. The Asian crisis had raised many questions concerning the methods of the IMF, and the ILO should put forward its own recommendations for the reform of the Bretton Woods institutions.

13. He recalled that the Committee had been debating relations with the Bretton Woods institutions since the High-level Meeting of 1987, but the Office paper seemed to exaggerate the importance of the dialogue and was too optimistic. It was essential to remind the IMF of the need to take into account core labour standards and the need for social dialogue based on Conventions Nos. 87 and 98 at the outset of the reform process. Many facts were listed in the paper, but no results, and a monitoring system was needed. The Office's efforts at dialogue on the financial crisis were praiseworthy, but the social havoc in Indonesia indicated that the IMF had not been effective, had merely paid lip-service to certain principles, had made mistakes, had taken employment issues lightly, and had not addressed the need for a safety net adequately. During times of economic success, Asian countries had paid no attention to developing adequate systems of social protection. Paragraph 13 of the paper clearly reflected the priority those institutions placed on economic growth rather than core labour standards, and the ILO must continue to stress the importance of freedom of association and the right to collective bargaining and the other core standards. At the Conference in 1997 Mr. Wolfensohn had stressed that economic growth must go along with human rights, but this message had not penetrated to his staff. The ILO Declaration needed to be used forcefully in the dialogue. Many donor governments had recently moved towards social democracy, and this might prove positive. In conclusion he reiterated that, in the light of the questions concerning the methods of the IMF raised by the Asian financial crisis, the ILO should now put forward its recommendations for reform of the Bretton Woods institutions.

14. The representative of the Government of Italy drew attention to the two essential conditions for recovery, which were interconnected: economic growth and employment. Training was essential to employment, and should be directed to areas where skills were needed. However, those areas kept changing, and in view of the expansion and pace of change of technology, training could not be left exclusively to the market, and should enable workers to move between sectors. Large enterprises were more likely to organize training than smaller ones, although the job-creation potential of the latter was greater. International institutions hence had a role to play. He recalled Mr. Wolfensohn's address to the 1997 International Labour Conference, but stressed that it was important for the ILO to be at the forefront of developments. Vocational training should also be more closely integrated in both primary and secondary schools, and it should also be offered to adults who needed to reshape their skills. Social dialogue was an important tool in reducing unemployment in general, especially among young people.

15. A representative of the Government of France referred to the role of the World Summit for Social Development in endorsing the core labour standards. He highlighted the roles played by Mr. Somavía and Mr. Chotard in this. Those standards were now providing input into the work of the IMF, and the Bretton Woods institutions were finally becoming aware of the need to address the entire social fabric. The reaction of the Employer Vice-Chairperson was hence surprising. The success of the ILO's dialogue with the Fund had been demonstrated. The application of the principles of freedom of association should not affect any country's comparative advantage, and should not prevent any country from seeking or obtaining it; conversely, failure to apply the principles of freedom of association had its costs, most evidently in cases where labour leaders were imprisoned. The report would also prove extremely useful in introducing reforms in the French training system.

16. A second representative of the Government of France emphasized a number of key issues contained in the World Employment Report, stressing the need for continuous training that built on a good education; the importance of certifying competencies in employment and ensuring their transferability when workers moved to new jobs and enterprises; the importance of the quality of training; the need to cater to the training of staff in small and micro-enterprises, which were major creators of employment; and the need for training for the informal sector. The report provided a good base for discussing human resources development at the International Labour Conference in 2000, and she welcomed the opportunity to dwell on the relationship between education and training.

17. The representative of the Government of Argentina considered that the report had underestimated the number of unemployed workers, but appreciated its conclusion that training and workers' skills today were decisive in determining countries' competitiveness in the global economy, and also its call for a flexible training system that can adjust quickly to today's rapidly changing labour market needs. He expressed concern that there was no reference to any causal relationship between the extent of training and the drop in unemployment. He emphasized the importance of the two levels of training: basic education to prepare young people for the labour market, and ongoing vocational training to help people stay in employment. He further appreciated the report's conclusion that basic education should promote the development of analytical, cognitive and behavioural skills. Closer relations between the ILO and UNESCO may be called for to promote ways and means of ensuring a smoother transition from school to the world of work. With the right incentives for the private sector, the market could retrain those who had lost jobs, but for more marginal sectors with more vulnerable workers, the government had to take responsibility. Here macroeconomic balances took priority, and funding might not be available for relevant education projects. In this regard the ILO could help in providing appropriate information to the international financing organizations and in encouraging tripartite consultation. With respect to agenda item 6, increased dialogue with the IMF was welcome to heighten awareness of, and to stimulate policies relating to employment, labour standards and tripartite participation. Highlighting such relevant social and economic issues should not lead to institutional conflict.

18. The representative of the Government of Finland expressed his appreciation of the report, but felt that it could have achieved more. He again stressed the report's conclusion about the importance of education and training in raising workers' skills in the global economy and the opportunity that higher skills offered for higher value-added production in technologically advanced sectors. This was well-known; he had expected additional proof in the report of how effective training actually was in raising workers' skills and generating employment. The report should have provided a more detailed analysis of the actual learning process and the basic features of a good learning situation. How should work be organized to meet the needs for lifelong learning and skills development? What kind of work was most conducive to raising workers' skills? What were the implications of teamwork for learning? How much time should be devoted to training at the workplace? What were the implications of the information society for skills requirements? These were some of the questions that needed to be addressed more thoroughly. In terms of the implications for the ILO's work, he stressed that work organization could influence learning positively. If that potential was neglected, which often happened with temporary and part-time work, resources invested in basic education may be wasted. The real challenge was in turning work itself into an important tool for vocational training. Those enterprises and nations that had succeeded in this endeavour had created a competitive advantage that would generate not only more jobs but also better ones.

19. The representative of the Government of Sweden questioned what contribution or impact the report would have in general, and in particular on decision-makers around the world. The report represented an important tool for the ILO, and should be used by the ILO to set the international agenda for the economic and social debate. In order to do so, the report must address current problems in the world in a way that both challenged and gave ideas and arguments to the decision-makers that addressed and affected those problems. The framework was after all decided in other fora, which had a great influence on the ILO's agenda and resources. The ILO should be selective and politically bold in its choice of topics, and should use the analytical tools and economic arguments invoked in other fora.

20. The representative of the Government of the United Kingdom recalled that her Government had made it clear at the 1998 annual meetings of the Bank and Fund that sound economic policies were the responsibility of national governments, but that international financial institutions had a vital role to play by setting and monitoring standards in relation to economic policy. The United Kingdom Government had proposed a reshaping of the international financial institutions around codes of conduct or general principles that would be agreed by each country and monitored internationally. These included the IMF's Code of Good Practice on Fiscal Transparency, and its work on a code for monetary and financial transparency; the OECD's work on a Code of Good Practice on Corporate Governance, and the general principles of good practice on social policy to be developed by the World Bank.

21. These were a key part of the international effort to strengthen the financial architecture, manage the risks and secure the benefits of globalization, and to provide for sustainable development leading to economic growth and a way out of poverty. The general principles of good practice on social policy to be developed by the World Bank should include three dimensions: basic social services, social protection and core labour standards. They should not aim at the creation of entirely new standards: many of the standards and obligations to be covered were already contained in existing human rights instruments, such as the International Covenant on Economic, Social and Cultural Rights, which were the outcome of various world conferences, such as the World Summit for Social Development, to which most countries had already committed themselves. Basic social services were intended to ensure that all people -- women and men -- had access to clean water, decent sanitary conditions, an acceptable level of health care and primary education. Social safety nets were an important part of social protection, together with training and employment programmes to enable people who had lost their jobs to return to work. Her Government was aware that the lack of such social protection arrangements could hinder countries in their response to the financial crisis, but implementing social arrangements may be a long-term goal for many countries.

22. The principles enshrined in the ILO Declaration on Fundamental Principles and Rights at Work and its Follow-up should be incorporated into any international general principles on social policy, but it should be clear that it was for the ILO to set and address those standards. The G7 Leaders' Statement on the World Economy had agreed that there was a need for general principles of good practice in social policy so as to protect the most vulnerable groups in society and that these should be drawn upon in developing adjustment programmes in response to crises. G7 ministers of finance had endorsed a proposal by the United Kingdom Government for general principles of good practice on social policy. The Development Committee had agreed that the World Bank should take the initiative in developing these principles, which naturally must apply to all countries, and the World Bank should work with the UN system, including the ILO and other agencies, to develop those principles. The purpose of the principles were as set out in the speech by the United Kingdom Chancellor at the G7 meeting. Her Government had made it clear that the code should not be used in any way for protectionist purposes or as a condition for aid or technical assistance, and that it would oppose any attempts to use it in that way: no sensible policy-maker wished to turn the clock back to protectionism and insularity.

23. The representative of the Government of Austria commended the Office for producing a well-balanced account on the availability of work and the effect on work of education and training. Training could raise the quantity of employment and cooperation between workers and employers was important in developing training policy and providing training. However, education and training could not produce a miracle; employment policies had to rely on macroeconomic stability combined with micro-economic interventions. He emphasized the role of apprenticeship in ensuring a smooth transition of young people into stable employment, referred to the unfavourable situation that women faced with regard to training, and acknowledged the emphasis in the report on the training of older workers. The path to growth was through higher productivity. Austria was opposed to a strategy of growth through lower wages. Government's role in influencing enterprise training was inadequately covered. Enterprise-based training would be insufficient in the long term in the absence of a foundation of lifelong education. In view of budgetary restrictions in the public sector, enterprises should be encouraged to develop their own training programmes by offering them special incentives.

24. The representative of the Government of Poland considered the report to be a useful tool for adapting training strategies to the needs of the labour market. His Government had arranged for the report to be translated into Polish. The report did not cover a World Bank-financed adult training project implemented with the assistance of ILO Turin Centre, which had been much appreciated. The report's analysis of Eastern European employment data was on the whole inadequate; it would have been useful to engage a specialist from the region.

25. The representative of the Government of India considered that with one- third of the world's workforce either unemployed or underemployed, the world employment situation was a matter of great concern. The report was important, as it addressed the twin problems of employability in the fast changing global economy and the role played by training. Although in India almost 92 per cent of workers were engaged in the non-organized and agricultural sectors, the report did not adequately address their concerns. Training programmes were needed that met the requirements of the changing global environment while also assisting local production that made use of local manpower and resources. The report gave a somewhat rosy picture of the employment situation. The premise of the World Summit for Social Development had been that globalization and trade liberalization would generate more and more employment opportunities in the global economy. However, these expectations had not materialized. The macroeconomic policies of governments and multilateral institutions had led to recession, an increase in poverty, and jobless growth, in so far as there had been any growth at all. National economic and social policies were influenced by external factors. Large-scale unemployment and underemployment needed suitable macroeconomic policies at the national and international levels to promote employment and prevent job losses and social exclusion. The ILO and the Bretton Woods institutions were pursuing different approaches and objectives, and seeking support for these from each other rather than attempting to agree on a suitable set of objectives. World Bank policies had led to jobless growth, insecurity and loss of social protection. Multinationals had been advocating employment exit policies and deregulation, while the ILO continued to maintain a rigid policy on labour standards. National governments were receiving conflicting advice, which could be intentional or inadvertent, but it had serious implications. The objective of the dialogue should be to establish cohesive and uniform policy guidelines, rather than to address fragmentary issues and provide conflicting advice. In order to address unemployment and underemployment it was essential to consult those affected and to engage trade unions and employers in training and retraining programmes. His Government was currently depositing the ratification of the Employment Policy Convention, 1964 (No. 122) which provided a framework for such consultation.

26. The representative of the Government of China found the report comprehensive, and suggested that it be translated into other languages. Stable economic growth was a prerequisite for job growth. As unemployment rose, a host of social problems ensued, and they could only be tackled by concerted national policies that were essential in preventing symptoms from spreading to other countries. He emphasized the importance of targeted training policies, strengthening the quality and flexibility of technical training programmes and their link with employment and counselling services. He called for an expansion of institutions that provided unemployment insurance and social security. The ILO should target its assistance on economically vulnerable groups; arrange for sufficient financial resources to back its technical cooperation activities in employment and training; undertake employment and training research; and examine the employment and training implications of the Asian financial crisis.

27. A representative of the Government of Egypt said that the report highlighted well the effects of technological and organizational innovations on the growing demand for skilled labour; the problems of adjusting training programmes to demand; and the search for new sources of financing training, including private sector financing. With some 60 million young people looking for jobs, most of whom had no skills, it was essential to provide them with adequate skills training, complemented by education policies to ensure their adequate insertion into employment. High priority should be given to policies that promoted employment opportunities for women. In Egypt, the Government, in collaboration with the ILO, was endeavouring to make better use of its human resources by adjusting its training supply to employment needs based on employment data. The ILO should concentrate its activities on training requirements in countries affected by employment restructuring, promote training for self-employment there, and investigate the changing role of the State in training. The report's findings were important. Concrete programmes were now needed.

28. Another representative of the Government of Egypt, referring to relations with the Bretton Woods institutions, highlighted the profound international developments that went beyond economic issues and were affecting the lives of so many people. Addressing only the economic aspects was impractical, as the serious social aspects arising out of narrow economic policies had to be addressed. The crisis in Asia had now spread and had taken hold in the Russian Federation. It was a spectre looming over many other economies. It was necessary for the Bretton Woods institutions to take better account of the social dimension of their policies: they should be more flexible and understanding of the differences between countries, without trying to impose standard prescriptions on all countries. They should promote development policies which stemmed from the countries themselves, with an appropriate balance between the economic, social and cultural aspects. Coordination with the ILO and other UN agencies was essential for a global vision according to the plan of action and follow-up on the Social Summit. The promotion of labour standards was an objective that could not be achieved without an effort to build economic efficiency in cooperation with the Bretton Woods institutions. Such cooperation should not mean adding labour standards as an additional element of conditionality, which would not contribute to job creation, economic efficiency or the appropriate development of the labour market. The ILO should not push these institutions to go beyond their mandates, and no pressure should be applied by either side. The issue of core labour standards was for the ILO alone, not for other organizations. The dialogue should focus on issues such as job creation. ILO cooperation should depend more on its presence in the field, where credibility depended on a readiness to provide assistance.

29. The representative of the Government of Japan appreciated the quality of the report. Although not necessarily leading to jobs, training was an important part of workers' endeavours to equip themselves with industrial skills to produce higher value-added products in an environment of keen international competition. It was important to adjust human resource development efforts to the demands of new economic structures. The public sector's role in training was adequately covered in the report but more importance should have been given to the workers' role in promoting their own training and skill upgrading, and also to the enterprise's role in offering on- and off -the-job training for its workers. It was important to expose the worker to continuous, lifelong training. The role of the public sector was to complement enterprise training and to provide a supportive environment for HRD and labour market and training information to enterprises and individuals. The ILO should endeavour to raise its expertise in technical cooperation in the area of education and training.

30. The representative of the Government of the United States found the report rich, illuminating and balanced. It balanced the need to develop strong institutions with the need for market-driven training. He gave the example of introducing skill grants, or vouchers, in an effort to limit the role of the US Government in training while making training consumer-driven, complemented by timely and accurate labour market information. The ILO had an important role to play in ensuring workers' protection in the context of globalization, but it had to be more practical. Citing the need for vigorous promotion of fundamental labour policies, he urged greater engagement with the Bretton Woods institutions, which had made a good start to systematically incorporate core labour standards into their work, but serious action was required. The ILO was promoting fundamental rights, but the World Bank was insisting on an economic justification. His Government's position was that such justification had already been demonstrated by their work and by the work of others. Efficiency promoted competitiveness, but equity, where everyone would benefit through the trickle-down effect, was also important. This was where core labour standards contributed: freedom of association and the right to collective bargaining gave workers a voice to help capture some of the fruits of growth.

31. The representative of the Government of Bangladesh considered the report valuable, but at the country level the ILO provided little assistance beyond advisory services and technical assistance and tended to be too intellectual to have visible impact. It had no resources for infrastructure or training facility development. It should move quickly to undertake projects in these areas that would attract donor financing.

32. Ms. Sasso-Mazzufferi (Employer member) expressed her appreciation for the documents prepared by the ILO. Referring to paragraphs 32 and 34 of the World Employment Report, regarding women, she agreed on the importance of basic education as well as training for women. However, this was not sufficient. Funds should also be put at their disposal, for instance through credits at reduced rates, to encourage enterprise creation by women. Entrepreneurship and self-employment was taking on increased importance for women. Therefore, a conducive legal framework for women's entrepreneurship development should be promoted in member States. This was an area where the ILO could play a role. She also stressed the need to increase the competitiveness of enterprises so that they could achieve their job-creation potential and take advantage of globalization. To this effect, it was important to take into consideration a number of factors, such as the requirements of trade liberalization for the enterprise, the need to improve productivity and labour market flexibility, etc. It was very important to avoid policies that would increase costs and reduce the capacity of enterprises to create new jobs. In Italy, small and medium enterprises were the main job creators. She agreed with the part of the report emphasizing the importance of enterprise culture and the need for a conducive business environment, which were essential to the growth and competitiveness of enterprises. She referred to the papers on job creation and enterprise development, stressing that the reduction of public deficits and a wise fiscal policy could attract new productive investment, reducing the social costs of unemployment and underemployment. Finally, she underlined the need for an integrated approach on the part of the international organizations that would be conducive to the creation of more and better jobs for men and women.

33. The Worker Vice-Chairperson welcomed the paper on employment-intensive programmes and observed that public works projects of this type should be increased in developing countries. Drawing a parallel with public works in history, he noted that in contrast to these experiences, the approach advocated today by the ILO was directly benefiting the people and small entrepreneurs through job creation and income distribution. He welcomed in particular the work by the ILO that had led to the inclusion in contract documents of provisions relating to freedom of association, minimum wages, equal employment opportunities for men and women, and measures to combat child labour and forced labour. He further supported the proposed policy to improve the access of small and medium enterprises to public works contracts. Small and medium enterprises should apply labour-based technologies and respect the relevant labour clauses included in their contracts. The ILO should provide guidelines to employers and workers, as well as to governments, who should recognize the advantages of the labour-based approach, particularly in times of crisis: lower unit costs, fewer foreign exchange requirements and a two- to fourfold increase in job creation. However, he drew attention to the difficulty faced by developing countries in promoting labour-based technology, since globalization made it very easy for enterprises and governments to buy more sophisticated technology on the international market. He therefore suggested that a dialogue be promoted in the countries on these policy options, and that appropriate guidance be provided by the ILO. He confirmed the trade unions' interest in such a dialogue and appealed to governments and employers to collaborate. He also noted the opportunities provided by labour-based investment policies to create jobs for women, and asked that greater attention be given to training and to child-care facilities for female workers. The Worker members also found the community-based approaches described in the document very appropriate. They supported in particular paragraph 35, which referred to Convention No. 29, with a view to prohibiting compulsory labour in works of community interest. The Workers' group noted that, despite the very positive achievements of this programme, ILO regular budget resources for these activities had been drastically reduced. There were now fewer than ten staff members now working on these activities, and this had been reduced from over 20 a decade earlier. As a result, the number of countries in which the ILO was actively promoting labour-based infrastructure programmes had declined significantly. The Workers' group called for a substantial increase in resources for the programme. Commenting on the paper on Job Creation in SMEs, he pointed out that an important share of the Enterprise and Cooperative Development Department's budget had recently been spent on enterprise creation without regard for the quality of the jobs being generated. He regretted that there was not enough emphasis on job quality. Nor was there any mention of the target group: enterprises should be created for the benefit of the people. The ILO document lacked this perspective. The unbalanced allocation of resources in the Department was also reflected in the background paper, which contained only four minor references to job quality, although this issue was an important aspect of the Job Creation in Small and Medium-Sized Enterprises Recommendation, 1998 (No. 189) adopted at the Conference in June. He pointed out that quality employment stimulated consumption, which in turn contributed to economic development and enterprise creation. The Enterprise and Cooperative Development Department should increase its efforts to fully reflect the principles of the Declaration and of Recommendation No. 189 in all its activities for job creation in SMEs. In the past, an excessive amount of the Department's budget has been spent on SME promotion and only little was left for improving job quality. If the programme and budget of the Department for 2000-01 were to allocate resources in the same proportions, it would be difficult for the Workers' group to approve it. At least 50 per cent of the Department's budget should be allocated to improving job quality. Similarly, the promotion of job quality by enterprises should be emphasized in technical cooperation projects. It was difficult to measure the impact of the current SME development programmes. Therefore, it was important to develop and apply effective methodologies for this purpose.

34. Mr. Mansfield (Worker member) reiterated the Workers' clear understanding of the magnitude of the financial crisis which had wiped away decades of growth in Asia, Eastern Europe and Latin America. The ILO's response to this was now its highest priority, raising issues of how to recreate higher economic growth, a more even distribution of the benefits, and what specifically the ILO could do. The ILO had to reconsider its priorities, stressing employment and economic development and influencing policy prescriptions to overcome the crisis, including getting other institutions to support core labour standards so that adjustment would be equitable. The Office paper on relations with the Bretton Woods institutions was strong on the quantity of interactions, but weak on the quality of the outcomes. The addendum made it clear that these institutions maintained their reservations regarding freedom of association and the right to collective bargaining, which they saw as inconsistent with their economic objectives. It was for the ILO to obtain a clear commitment to ILO fundamental standards from their executive heads. The ILO's focus must be on advice and assistance in social protection and safety nets. Workers without protection would resist change. The report was comprehensive and well-written, particularly in the sections on training, but current employment issues should have been given more attention than the present 20 pages. Future issues of the report must pay more attention to employment issues. Retired workers needed decent pension systems; national health systems must ensure access to medical care. The ILO had a clear mandate to act in these areas, and the Governing Body should emphasize its role in relation to social safety nets. The paper on Country Employment Policy reviews in countries like the Netherlands and Ireland illustrated the crucial role of the social partners in economic and social policy development and implementation. The ILO should continue promoting appropriate national institutions at all levels in this area of social dialogue. The labour-based infrastructure investment programme was clearly a successful initiative which had demonstrated that it was possible to combine economic growth policy, employment generation and poverty alleviation on the one hand, with social progress and improved conditions of work, on the other. The labour-based investment option was less costly, required less foreign exchange and created several times more employment. These advantages were especially relevant in the present crisis. He emphasized the need to promote effective social safety nets and use acquired experience to promote sustainable employment. A serious tripartite dialogue would contribute significantly to establishing high-quality employment and fair working conditions. He expressed concern about the decline in staff resources allocated to the labour-based works programme over the last few years, and confirmed that the Workers' group was favourable to restoring its resource base to the level of a decade previously. The Conference agenda for the year 2000 would give the ILO an opportunity to comprehensively examine the role of the social partners in training policy development and provision. In the meantime the Office should step up its advisory services to alert its constituents to the significance of a properly structured vocational education and training (VET) system for future competitiveness and economic growth. The ILO must regard overcoming the economic crisis as its highest priority. It must take an active role in the broader policy debates to identify solutions that ensured that the crisis did not recur. ILO activities were required in the areas of macroeconomic policy responses and regulation of international investment flows. The ILO must review its priorities in order to make the maximum possible impact, and needed to build up and not reduce its resources. The ILO must respond effectively so that it could be seen to make a difference and to add value to the response needed to help tens of millions of workers regain a decent quality of life. The report had dealt in a comprehensive manner with the complex issue of training and offered practical suggestions for training reforms.

35. The representative of the Government of Spain stressed that basic training assisted in ensuring young people their first access to the labour market, while continuing training was an insurance against job loss. His Government was about to sign an agreement on joint training activities with Spanish-speaking American countries, involving the International Training Centre of the ILO in Turin.

36. The representative of the Government of Germany agreed that labour and social policy must be given more significance in the process of globalization and the reform of the international financial system. The Bretton Woods institutions should give greater importance to social policy, but it should be verified whether these and other institutions such as the WTO and the OECD were in conformity with the ILO or were developing their own sets of labour policies and institutions, as this would be bad for the ILO and counter-productive. In the tasks entrusted to these organizations in the financial and social sectors they should make use of what had already been developed in the ILO.

37. The representative of the Government of Malaysia welcomed the report's strong focus on education and training, but pointed out that most TVET systems had been increasingly affected by the crisis. With increasing unemployment there had been a need for massive retraining of retrenched workers. He welcomed technical cooperation activities in education and training, on the training of trainers, skills standards, curriculum development, and training of the disabled, and hoped that there would be team efforts to match skill demand and supply. Malaysia's experience had proven effective in these areas.

38. The representative of the Government of the Republic of Korea said that the ILO needed to pay close attention to the financial crisis and its effect on unemployment and other social problems in developing countries, and prepare technical assistance projects to address them. It should intensify its Active Partnership Policy in order to improve its responsiveness to countries' needs and allocate sufficient resources in the area of employment. It should proceed with practical cooperation projects, e.g. in linking vocational training with job placements.

39. The representative of the Government of Hungary said that the report provided important conclusions on training systems development, in particular at the level of the enterprise and with regard to the training and education interface. In the latter area he called for a common approach between UNESCO and the ILO. He stressed that SMEs had little support from the training system, thus implying a vast domain of work for the ILO.

40. Mr. Anand (Employer member) highlighted a number of shortcomings of developing countries' training systems, e.g. poor equipment standards, no institutional linkage between education and training, and vested interests preventing such linkages and hence innovation. He called for greater involvement of the social partners in training and for institutional linkages between training centres. He recommended that the next issue of the report should be more action-oriented and exhaustive. The dialogue with the World Bank should be accelerated and results-oriented, but not in a bargaining spirit. This was not the time to impose preconditions based on protecting outmoded ideals when it was so urgent and imperative to protect and save the poor in Asia and Africa and thus relieve their continued suffering.

41. Ms. France (Employer member), speaking on behalf of the Employer Vice-Chairperson, stressed the need to promote an enterprise culture, foster entrepreneurship and remove barriers to enterprise creation. She regretted that time constraints had not allowed for more in-depth discussion and endorsement of the report on job creation. She hoped that this issue would be discussed further at a future session. The World Employment Report should lead to a wide debate, as this was the key to its usefulness. Technical and vocational education and training (TVET) was a key element in any employment strategy but should not be considered in isolation from other policies. She emphasized collaboration between all the different partners in delivering training, called for a flexible training environment, and stressed the importance of lifelong learning. Social security provision should provide safety nets, but must not provide disincentives to work. Promoting entrepreneurship and best practices in training -- i.e. what had and had not worked -- were all issues that could be discussed in the Governing Body in its consideration of the portfolio of proposals for the Conference agenda. She agreed with Mr. Mansfield that the ILO needed to examine these issues in the context of the world economic environment and the reforms of the international financial system, and in its relations with the Bretton Woods institutions it needed to pursue the ongoing debate in a spirit of cooperation so that concern for social issues would be fully integrated with financial and economic issues.

42. Mr. Owuor (Employer member) said the report had rightly proposed new training strategies, especially the need for flexible training. He feared, however, that it had come too late to save training institutions in many countries undergoing structural adjustment. In enforcing fiscal discipline, many developing countries had not been able to increase training investments. Training facilities had fallen into disrepair, dropout rates had increased and many countries had found quality training aimed at meeting international competitiveness, e.g. for the telecommunications sector, to be beyond their reach. With the informal sector accounting for more that 60 per cent of employment, there was a need for greater community-based training, an area in which the International Training Centre of the ILO in Turin had recently been engaged. He called for donors to ensure that all their projects had built-in programmes to strengthen institutional capacity in order to ensure their sustainability. The ILO should develop distance learning approaches to education and training for greater outreach, especially in developing countries.

43. The representative of the Government of Brazil stated that his Government was implementing a national training programme that benefited 5 million workers. Vocational training was not enough. He highlighted the importance of economic stability to the growth and maintenance of employment; there was a role here for the ILO, and this should also be part of its dialogue and cooperation with the Bretton Woods institutions. He stressed the ILO's role in the development of job creation schemes and training programmes.

44. The representative of the Government of Colombia, referring to the importance of training to combat unemployment and underemployment which had been exacerbated by the Asian crisis, stressed the need also for requisite economic policies and investment in infrastructure. With global unemployment growing, the Bretton Woods institutions should see that the labour component was an essential part of any economic development policy. Education and training could contribute in lowering unemployment but needed to be complemented by growth-oriented economic policies. He had hoped that vocational rehabilitation would have been discussed at the Committee at the present session. Since many people in Colombia were afflicted by anti-personnel mines, the vocational rehabilitation programme should be expanded. He called for a labour component to be added to programmes that assisted countries emerging from armed conflict.

45. Mr. Taqi (Assistant Director-General) thanked the members of the Committee for a rich and substantive discussion and for their appreciation of the documentation. Mr. Amjad and his team in particular would be gratified by the comments made. Many members had found the report excellent. It offered a great deal of food for thought; criticisms were mostly directed at its omissions. He stressed the importance of follow-up, as suggested by many members. In particular, he referred to the suggestion by the Government of Argentina about the need to examine to what extent the supply of skills and training would raise investment in the economy and hence its capacity to generate employment. He regretted that the Committee had been unable to discuss vocational rehabilitation during the meeting. This was a very important area of work, where the ILO really made a difference, and it should figure prominently at the Committee's next meeting. Finally, he emphasized the need to improve the ILO's ability to undertake economic analysis and to disseminate the results in a timely way.

46. Ms. Hagen thanked the members of the Committee for their observations, and concluded the discussion of the issues concerning relations with the Bretton Woods institutions by emphasizing three points. First, it was very important to note that the IMF, which by virtue of the centrality of its role in financial stabilization was facing heavy criticism as a result of the financial crisis, had actually maintained a very positive relationship with the ILO and had consulted it on the issues of core labour standards and social dialogue, both of which the Fund was trying to support in its policy dialogue throughout. There had been close cooperation concerning the Republic of Korea, where the IMF had played an instrumental role in the establishment of a formal mechanism for tripartite dialogue. This was also true with respect to the Fund's work in Indonesia, where its policy dialogue had included respect for core labour standards and the ratification of ILO Conventions. Secondly, the ILO had been very active with the Bretton Woods and other international financial institutions in trying to identify specific programmes to address the crisis. The policy dialogue was not detracting from this effort. As an example, the World Bank had coordinated a US$2 billion programme to create 1 million jobs through public works over two years in Indonesia, and the ILO was playing a role in the design of this programme and in assessing ways to increase income transfers. Nevertheless, the employment problem was far vaster than a public works programme could possibly address, and it had to be seen as only a part of the solution, along with programmes to provide food subsidies, health care, and other essential programmes for basic survival. The larger part of the solution, however, had to be seen as stimulating these economies to grow again and to create the environment for growth in jobs through stable economic growth. Finally, in the ILO's view, this more comprehensive solution necessarily involved respect for core labour standards as the best way to create a framework for social dialogue, whether in countries facing crisis or countries undergoing a normal process of development. The new ILO Declaration had created fresh impetus and greater respect and support for the ILO and for the legitimacy of core labour standards, and provided a more credible basis on which to move ahead in the dialogue with the Bretton Woods institutions. The World Bank had been experiencing some difficulty in supporting Conventions Nos. 87 and 98, and had sometimes given advice not fully in accordance with them, but the dialogue on this was being intensified. The issue was not one of conditionality but rather consistency. The difficulty was that the Bank defined for itself the standards which it would support, particularly in relation to child labour and gender discrimination, relying also on its own interpretation of the economic justification for its actions. Should the Bank begin work on a code of general principles of good practice in social policy, it would, of course, have to include core labour standards, and it would be up to the ILO to ensure that these standards were the same as its own, taking into account the strength of their having been derived through appropriate normative processes and tripartite deliberations.

47. The Worker Vice-Chairperson expressed his group's view that the work of the IMF and the World Bank had not yet been of a nature that they could fully trust. If they were going to prepare a code of good practice, it should agree with the ILO's positions, and on freedom of association and collective bargaining it must recognize the principles endorsed by the ILO Declaration.

Geneva, 13 November 1998.

(Signed)  R.I.P. Sarmiento,

Updated by VC. Approved by RH. Last update: 26 January 2000.