87th Session
Geneva, June 1999

This Report proposes a primary goal for the ILO in this period of global transition — securing decent work for women and men everywhere. It is the most widespread need, shared by people, families and communities in every society, and at all levels of development. Decent work is a global demand today, confronting political and business leadership worldwide. Much of our common future depends on how we meet this challenge.

The Report aims to focus the energies of the ILO on this major problem of our time. It seeks to create a unity of purpose among the three constituents — governments, workers and employers — which will send a clear and distinctive message about the Organization to public opinion at large.

It is also the second step in the process of reform and modernization in the ILO. The first was initiated last March with a budget proposal to begin the new century by moving from 39 major programmes to four strategic objectives: fundamental principles and rights at work; employment; social protection; and social dialogue.

The Report complements the Programme and Budget proposals for 2000-01 in three ways. First, it brings the four strategic objectives together so as to send a single message on what the ILO intends to do. Second, it translates this vision into the realities of programme priorities and capabilities. Third, it views the ILO's activities from the perspective of the various regions of the world, thus reflecting the developmental and institutional diversity of people who experience an increasingly common world of work in different ways.

The Report has been enriched by the contributions and views of many, including constituents, staff members and the academic community. It speaks to all those who are concerned with the future of the ILO, to those who share its values, and to those who are privileged to serve it.

Preface

1. The primary goal

Global adjustment

The policy response

The ILO Declaration on Fundamental Principles and Rights at Work
The new policy emphasis
Development policies
Gender policies
Enterprise promotion

2. The programme priorities

Human rights and work

Promoting the Declaration on Fundamental Principles and Rights at Work and its Follow-up

Progressive elimination of child labour
Renewing work on labour standards

Employment and incomes

The policy framework

Strengthening social protection and social security

Adjusting to social change
Extending social protection
Improving governance of social protection
Linking labour market and employment policies with social protection
Major social protection issues
Dynamic systems of social protection
Improving protection at the workplace
The challenge of global migration

Strengthening social dialogue

The rise of civil society
Strategies for employers' organizations
Strategies for workers' organizations
Strategies for governments
ILO support for balanced social dialogue
The regional dimensions of social dialogue

3. The regional perspectives

Responding to regional realities

Africa
The Americas
Arab States
Asia and the Pacific
Europe and Central Asia

A new approach to technical cooperation

The new framework
Focus and impact
Delivering quality
Effective support systems
Mobilizing resources
Partnerships

4. The institutional capabilities

The management implications of strategic objectives

Strategic budgeting

Monitoring and evaluation

Personnel policies

The knowledge function of the ILO

Research policy
Strengthening economic analysis
Strengthening statistical and data capability
Rapid response capacity
Media policy

External communications policy

Publications policy

Global partnerships

The International Institute for Labour Studies

The International Training Centre of the ILO

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The world and the ILO are going through times of turbulence. Yet, as is well known, these are the moments of opportunity.

The social framework

The ILO was established in 1919 in a world which was ravaged by war, threatened by revolution and haunted by the misery and poverty of working people. Its aim was to build a social framework for peace and stability within which economic processes could generate prosperity with social justice in the life of workers and in the world of work. Since its inception, it has sought to create this framework through a combination of normative action, institution building and public policies. Through many social and political struggles, the ILO's message has, in several respects, been embodied in the law and practice of what are today considered the developed societies. The test of time has shown that the ILO stands for values for which people care.

The global economy

In the last two decades, however, the traditional cornerstones of the ILO's activities have changed, shifted by the transformation of the economic and social environment brought about by the emerging global economy.

Policies of economic liberalization have altered the relationship between the State, labour and business. Economic outcomes are now influenced more by market forces than by mediation through social actors, legal norms or State intervention. International capital markets have moved out of alignment with national labour markets, creating asymmetrical risks and benefits for capital and labour. There is a feeling that the "real" economy and the financial systems have lost touch with each other.

Changes in employment patterns, labour markets and labour relations have had a profound impact on the ILO's constituents, particularly trade unions and employers' organizations.

Globalization has brought prosperity and inequalities, which are testing the limits of collective social responsibility.

For the ILO — whose vocation lies at the intersection between society, the economy and the lives of individual human beings — these are seismic changes. But they are also setting the stage for its future role. The very forces which transformed the old framework are creating new demands and new opportunities for social action.

Changing social consciousness

Changes in technology and production systems have led to changes in social consciousness, and to a new awareness of personal identity and human rights. Increasing consumer choice and access to knowledge and new means of communication have made individuals and social institutions not merely subjects but also potential actors in the process of globalization. Social preferences influence market outcomes and have an impact on corporate reputations. A good corporate social image is increasingly essential for business success.

Emerging political concerns: Insecurity and unemployment

The change is not only economic and social. Politically, many countries now find themselves under scrutiny — both by markets and by public opinion — without the benefit of the doubt and the financial subventions of the Cold War era.

Problems of human insecurity and unemployment have also returned to the top of the political agenda in most countries. The social dimension of globalization, and the problems and demands it brings to the world of work, are becoming public concerns. There is growing realization that markets do not function in isolation from their social and political contexts. Social protection and social dialogue, for example, are increasingly seen to be integral elements of the adjustment process itself. The experience of the transition economies; increasing social polarization; the exclusion of Africa; and the recent crisis in emerging markets, have all made evident the need for a strong social framework to underpin the search for a new financial architecture.

Giving a human face to the global economy

The call to give a human face to the global economy is coming from many — and very different — quarters. Pope John Paul II has emphasized the "need to establish who is responsible for guaranteeing the global common good and the exercise of economic and social rights. The free market by itself cannot do it, because in fact there are many human needs that have no place in the market". Significantly, this concern is now voiced by business itself. The convenor of the World Economic Forum at Davos, Klaus Schwab, has warned that "the forces of financial markets seem to be running amok, humbling governments, reducing the power of unions and other groups of civil society, creating a sense of extreme vulnerability for the individual confronted with forces and decision-making processes way beyond his reach".

At this juncture, the ILO therefore finds itself well positioned. Business, labour and governments sit at its table. Its instruments are social dialogue and policies to promote fundamental principles and rights at work, employment, and people's security.

The new relevance of the ILO

All this gives new public relevance to the facilities the ILO provides to the international community: the global reference point for knowledge on employment and labour issues; the centre for normative action in the world of work; a platform for international debate and negotiation on social policy; and a source of services for advocacy, information and policy formulation. It is a moment when the ILO must once again display its historic capacity for adaptation, renewal and change.

The moment of opportunity will not last indefinitely. To take advantage of it, however, the ILO has to overcome two persistent problems.

Moving forward: Setting priorities

The first is an institutional tendency to generate a widening range of programmes without a clear set of operational priorities to organize and integrate their activities. This has diluted the ILO's impact, blurred its image, reduced its efficiency and confused the sense of direction of its staff.. To some extent, the problem arises from the exceptional richness of the ILO's mandate itself.

That mandate, as eloquently expressed in the Declaration of Philadelphia, is to create the conditions of "freedom and dignity, of economic security and equal opportunity" in which "all human beings, irrespective of race, creed or sex, can pursue both their material well-being and their spiritual development". The pursuit of such a vision demands an array of programmes ranging from the promotion of rights at work to institutional development. It requires the scope of ILO activities to extend from the workplace — or the workspace — to the economy as a whole. It requires responding to changing needs which have to be accommodated within frozen budget levels, leading to activities which are inevitably small and often fragmented. It means that the ILO periodically has to refocus its programme, to restate its message in the idiom of contemporary needs, and to mobilize external partnerships for resources and expertise. It means that focus, excellence and effectiveness must guide the management culture of the house.

Moving forward: Creating a sense of common purpose

Secondly, the end of the Cold War weakened the sense of common purpose among the constituents. It was further eroded by the impact of globalization on all the social actors. The decline of ideology and class conflict, the multiplication of social interaction beyond the workplace, and the trend towards enterprise-level bargaining, have all led to a greater fragility of consensus among the ILO's tripartite membership. It has meant that, while constituents have strong interests in individual programmes, there are not many which attract active support and widespread commitment from all three groups. An ILO without internal consensus is an ILO without external influence.

The two problems are, of course, linked. The clearer the perception of a common purpose and a shared interest in what the ILO stands for, the stronger and wider the areas of consensus will be.

The definition of a clear, common purpose is the first step.

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The goal

The ILO's mission is to improve the situation of human beings in the world of work. Today, that mission finds resonance in the widespread preoccupation of people at times of great change: to find sustainable opportunities for decent work.

Securing decent work for people everywhere

The primary goal of the ILO today is to promote opportunities for women and men to obtain decent and productive work, in conditions of freedom, equity, security and human dignity.

This is the main purpose of the Organization today. Decent work is the converging focus of all its four strategic objectives: the promotion of rights at work; employment; social protection; and social dialogue. It must guide its policies and define its international role in the near future.

The policy implications

Such a goal has several important policy implications, all of which are implicit in the mandate of the Organization. They now need to be made explicit and to be pursued.

A concern for all workers

The ILO is concerned with all workers. Because of its origins, the ILO has paid most attention to the needs of wage workers — the majority of them men — in formal enterprises. But this is only part of its mandate, and only part of the world of work. Almost everyone works, but not everyone is employed. Moreover, the world is full of overworked and unemployed people. The ILO must be concerned with workers beyond the formal labour market — with unregulated wage workers, the self-employed, and homeworkers. The participation of the informal sector in total employment has reached almost 60 per cent in Latin America. In Africa the informal economy accounted for over 90 per cent of new urban jobs during the past decade.

Promoting rights at work

All those who work have rights at work. The ILO Constitution calls for the improvement of the "conditions of labour", whether organized or not, and wherever work might occur, whether in the formal or the informal economy, whether at home, in the community or in the voluntary sector.

Promoting opportunities for work

Employment promotion is a central objective. The defence of rights at work necessarily involves the obligation to promote the possibilities of work itself. The ILO's normative function carries with it the responsibility to promote the personal capabilities and to expand the opportunities for people to find productive work and earn a decent livelihood. The ILO seeks to enlarge the world of work, not just to benchmark it. It is, therefore, as much concerned with the unemployed, and with policies to overcome unemployment and underemployment, as it is with the promotion of rights at work. An enabling environment for enterprise development lies at the heart of this objective.

Ensuring decent work

The ILO is concerned with decent work. The goal is not just the creation of jobs, but the creation of jobs of acceptable quality. The quantity of employment cannot be divorced from its quality. All societies have a notion of decent work, but the quality of employment can mean many things. It could relate to different forms of work, and also to different conditions of work, as well as feelings of value and satisfaction. The need today is to devise social and economic systems which ensure basic security and employment while remaining capable of adaptation to rapidly changing circumstances in a highly competitive global market.

Protection against vulnerabilities in work

Protection against vulnerability and contingency. As it is concerned with the human condition of work, the ILO has the responsibility to address the vulnerabilities and contingencies which take people out of work, whether these arise from unemployment, loss of livelihood, sickness or old age.

Social dialogue as a means and an end

The promotion of social dialogue. Social dialogue requires participation and freedom of association, and is therefore an end in itself in democratic societies. It is also a means of ensuring conflict resolution, social equity and effective policy implementation. It is the means by which rights are defended, employment promoted and work secured. It is a source of stability at all levels, from the enterprise to society at large.

The way to decent work — the four strategic objectives

The goal of decent work therefore requires to be pursued through each of the four strategic objectives of the ILO, as well as through a balanced and integrated pursuit of these objectives in their totality. It challenges all the constituents of the ILO alike. Governments, employers and workers have to accommodate their different interests in creative ways to respond to the demand for decent work placed upon them by individuals, families and communities everywhere.

Before turning to the operational implications of this goal, it is necessary to consider the wider context in which all of the ILO's activities will be set in future.

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Global adjustment

The wider context

We are in a prolonged period of adjustment to an emerging global economy. The recent crisis in the emerging markets is only the latest in a series of adjustments which began with the oil shocks, followed by the debt crises of Africa and Latin America in the seventies and eighties and the European transitional crisis of the nineties, not to speak of the particular situation in which Japan and the countries of the European Union find themselves today.

Globalization and adjustment

Over the next decade the major issue will be the adaptation of national economies and national institutions to global change, as well as the adaptation of global change to human needs. The nature of the problem and the solutions will vary from region to region, but no country or region will remain untouched. Globalization has turned "adjustment" into a universal phenomenon for rich and poor countries alike. It is changing the pattern of development itself, shifting long-term growth paths and skewing patterns of income distribution. If present trends continue unchecked the greatest threat we face is instability arising from growing inequalities.

The ILO will be called upon to deal with these recurring crises of adjustment and development over the next decade. It must now organize itself for this purpose.

The policy response

The ILO must articulate a coherent policy response based on its own values and competencies and adapted to the diversity of regional needs. It must be capable of delivering multidisciplinary programmes which combine and integrate expertise from each of the four strategic areas of ILO action. It must have a voice in the international debate on the future systems of governance for economic stability and equitable development. All this calls for new organizational and knowledge capabilities, which are discussed in Chapters 3 and 4.

The conventional wisdom

The standard policy response was formulated by the Bretton Woods institutions in the 1980s at the time of the debt crisis, and subsequently applied in the transition economies. It was based on two fundamental assumptions: that free markets were sufficient for growth; and that they were very nearly sufficient for social stability and political democracy. The strategy for economic success basically consisted in transferring responsibilities for regulation from the State to the market. This required a combination of policies: privatization, the liberalization of capital and labour markets, and financial stabilization. Macroeconomic policy was to be used primarily to control inflation rather than to stimulate growth. Employment was a secondary derivative of these policies. The function of labour markets was limited to ensuring flexible adjustment to changes in the level of demand. Global governance consisted in the application of these policies by the international organizations responsible for financial stabilization and adjustment, trade liberalization and economic development.

These policies were influential because they were simple and universal. They brought necessary macroeconomic discipline and a new spirit of competition and creativity to the economy. They opened the way for the application of new technologies and new management practices. But they confused technical means of action — such as privatization and deregulation — with the social and economic ends of development. They became inflexible and did not take the social and political context of markets sufficiently into account. Their impact on people and their families was sometimes devastating. Increasing doubts about the efficacy of these prescriptions after a decade of experience in the transitional economies came to a head with the recent crisis in the emerging markets. That crisis marked a turning point in public opinion. The result has been both greater uncertainty and greater receptivity to a wider range of opinions, including the views of developing countries and of civil society.

The new debate

The solutions are still far from clear. There has been a call for a new "global financial architecture". A wide range of measures has been proposed. At the international level they include: changes in the working of the international financial organizations; better, and growth-oriented, coordination of national economic policies; early-warning systems; exchange rate policies; and measures to regulate the flow of speculative capital. At the national level, measures suggested range from improved financial supervision and regulation to better legal and accounting systems and better corporate governance. Most of these issues lie beyond the competence of the ILO. What the Organization can do is to emphasize the importance of employment and rights at work in whatever financial architecture is ultimately put in place, and to facilitate the exposure and voice of its constituents in the ongoing debate. A global economy without a sound social pillar will lack stability and political credibility.

The ILO contribution

A parallel debate has also begun on the need for a social framework for stabilization, adjustment and development policies, as part of the measures for strengthening the global financial system. The ILO has an obvious contribution to make to this debate. It must have proposals to make to deal with both the short-term and the longer term social consequences of financial and economic instability.

It needs to insist on, and demonstrate, the importance of employment policies and of institutions for social protection and social dialogue, in the interests not only of social equity but also of successful adjustment policies and long-term economic development. The need for institutions and systems for social protection and social dialogue was glaringly revealed by the crisis in Asia. Such institutions had too often been neglected in the era of rapid growth, and their weakness at the moment of crisis impeded adjustment and enterprise restructuring.

The ILO must also have a view on the design of macroeconomic policies over the medium term. In particular it needs to be able to advise on the relative merits of fiscal and monetary instruments in terms of their respective employment and social policy implications. It should focus on the complementarity between macroeconomic and labour market policies in promoting employment.

In short, the ILO needs to create and deliver portfolios of policies — covering employment, social protection and institutional development — which are appropriate to different regional situations. These ideas are explored further in Chapters 3 and 4 of the Report.

These policies must be supported by a global normative framework which is universally accepted, and which is realized at the national level through development, legislative systems and institutional structures.

The constitutional provisions

The ILO's constitutional provisions have ensured respect for its normative prescriptions and enabled the Organization to retain its political legitimacy and its universality through the conflicts of the twentieth century. They are based on the principle of voluntary obligations which, once accepted, are subject to systematic supervision and open discussion. They work through public opinion and institution-building, rather than through coercive or punitive measures. They are based on international consensus and national dialogue. Such an approach is essential to manage the social tensions of global transition.

The ILO must act consistently with its own constitutional provisions and insist on its normative mandate within the international community. Albert Thomas, the first Director-General of the ILO, made the point long ago in an address to this Conference: "There is only one means of being certain as to the outcome of our efforts — of being sure of reflecting the common will, and the hopes we all share — and that is for the International Labour Office to stand firmly by the terms of its constitutional charter, and to draw attention constantly to the letter and spirit of these provisions."

If the ILO's way is to guide the international community in future, it must be effective.

The best guarantee of credibility lies in the effectiveness of the ILO's normative activities and the integrity of its supervisory and control machinery. The point of departure must be a consensus among all constituents — governments, employers and workers — that nothing should be done to compromise its principles or weaken its functioning. What is necessary is to modernize the process in order to make its work more relevant to all constituents, more practical in its results and more widely known to public opinion. Improving the visibility, effectiveness and relevance of the ILO's standard-setting system must become a political priority. Detailed proposals are made in Chapter 2.

The ILO Declaration on Fundamental Principles and Rights at Work

The ILO Declaration

The Declaration was adopted as a promotional instrument. It must be realized in that spirit. To be effective, to be universal, and to retain legitimacy, there can be no question of conditionality attached to it. On this understanding, it should become a common objective of the multilateral system as a whole. But, to be credible, an effective and speedy follow-up is imperative.

Ensuring respect for fundamental rights at work must be accompanied by promoting their realization in economic and social practice. The Declaration has an important role to play in this respect. By calling on the ILO to assist Members, at their request, not merely to promote but to realize these fundamental principles, the Declaration provides the Organization with a clearer framework for development than it has had hitherto.

An agenda for development

Since the undertaking to realize the fundamental principles is independent of the ratification of the Conventions in question, the Declaration enables technical cooperation to develop its full potential within the ILO. The Declaration should therefore be viewed as a promotional instrument to translate the values of the Organization into programmes of integrated development. Respect for these rights is fundamental and requires no further justification, but respect for them will facilitate development itself. For example, the guarantee of rights at work enables people to claim freely a fair share of the wealth they have helped to generate, and to seek more and better work. The guarantee of those rights is therefore also a guarantee of a permanent process of translating economic growth into social equity and employment at all stages of the development path.

Technical cooperation

The Declaration should therefore strengthen and support the ILO's technical cooperation activities as a whole. Those activities must necessarily respond to a variety of constituent needs at the national level, and be guided by the four strategic objectives of the Organization. Since the objectives are interlinked, the realization of fundamental rights at work will facilitate, and be facilitated by, progress made in respect of the other strategic objectives.

The Follow-up to the Declaration also opens the way for a more substantive policy debate on development issues and rights at work within the ILO. This could lead to a better understanding of the problems and perspectives of different countries and regions, and suggest better ways of addressing them. The effectiveness of the Follow-up will be crucial in reducing the political tensions of global adjustment. Its transparency, the feedback to technical cooperation, the emphasis on promotion and development, integration of a gender perspective, and greater public awareness of social progress and successful development, these are all key elements in building public credibility in the ILO approach to social reform in an interdependent world.

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The new policy emphasis

Development, gender policy and enterprise perspectives

If the context of ILO activities in the future will be determined by the needs of adjustment in an interdependent world, three broad policy areas deserve particular emphasis. These are the mainstreaming of development and gender in all the ILO's activities, and making the enterprise a focus of ILO attention. Each of these is critical for the future relevance of the Organization.

Development policies

Integration of social and economic development

The ILO has consistently maintained that economic and social development are two aspects of the same process which sustain and reinforce each other. The linkages are well illustrated by the four strategic objectives of the ILO. Principles and rights at work provide the ground rules and the framework for development; employment and incomes are the way in which production and output are translated into effective demand and decent standards of living. Social protection ensures human security and civic inclusion, and enables economic reform. Social dialogue links production with distribution, and ensures equity and participation in the development process.

The Copenhagen Summit reaffirmed this integrated vision of development at the highest international level. It is time for the ILO to take the mandate forward.

Research capabilities

Major proposals to mainstream development policy in the ILO have already been made with reference to the Follow-up to the Declaration and the ILO's policy response to the challenges of global adjustment. But much remains to be done. The ILO has to back its advocacy of the complementarity of economic and social development with empirical evidence and theoretical justification. This requires an ILO research policy, as well as an enhanced capability within the Office for economic and financial analysis. The issues involved are discussed in Chapter 4.

Focusing on the working poor

Mainstreaming development in the ILO requires a specific focus on the problems of the working poor. It has long been apparent that the process of economic growth is inadequate to absorb surplus labour into the formal economy. On the contrary, uneven rates of growth and changes in the organization of production have led to pervasive informalization. It is among workers in the informal economy that the problems are the greatest. It is their rights which are the least respected. It is they who are underemployed and poorly remunerated, who have no social protection, and for whom social dialogue and participation have little meaning. The time has come to establish a coherent ILO policy for the working poor, specifically in the areas of employment generation, social protection and social organization, where their needs are most acute. The InFocus Programmes in Chapter 2 are a first step in this direction.

Institution-building

A major item of the ILO's development agenda also concerns institution- building, particularly institutions for participation, representation and voice, for social dialogue, and for social protection. This has long been an ILO concern, but it could benefit from recent advances in research in institutional economics, drawing upon organizational theory and practice referred to in Chapter 4.

Gender policies

Gender perspectives are defining labour markets

Women have transformed the labour markets of the world. In many countries the increasing labour force participation of women is driving employment trends. The activity rates of males are declining while those of females are increasing. The structural transformation of economies, demographic change, informalization and new notions of working time have redefined working and living conditions for both for women and men.

They have also modified gender roles in the labour market. In some cases, women have succeeded in obtaining greater opportunities and economic autonomy. But many have been victims of change. Globalization and economic restructuring favour flexible modes of employment, many of which lie beyond the reach of labour legislation and social protection and are characterized by low incomes and high levels of insecurity. While both men and women are affected by these trends, women are more vulnerable. The result is occupational segregation, with women finding themselves in the least protected sectors of the economy. The growth of female-headed households, due to migration, divorce, and abandonment, also means that the insecurity of women's employment directly affects children and other dependants.

Gender inequality is often built into labour institutions. Social security systems, for instance, frequently assume that the breadwinner of the family is male. Labour market segmentation along gender lines generates structural wage differences between men and women that are difficult to address through conventional labour market policy.

A gender perspective is therefore an imperative for the ILO, not merely for reasons of equity and fairness but also because it is part of the very substance of the ILO's work today. Although the vocabulary of gender has trickled into the programmes and activities of the ILO, it is still limited to statements on equality for women and women's rights and constrained by the absence of an integrated policy. For example, gender concerns have informed ILO research on labour markets and poverty, but the results have been fragmentary. They have not been given institutional priority or led to basic policy changes. The Director-General announced a new commitment to an integrated gender policy when he inaugurated a special celebration in the ILO on 8 March 1999 on the occasion of the International Women's Day.

A gender policy for the ILO

The ILO must articulate a gender perspective on the world of work. Building on current activities to promote equality of women, the aim will be to examine the economic and social roles of both women and men, and to identify the forces which lead to inequality in different domains. It will involve broadening the focus of attention from the de jure achievement of equality for women to the de facto results of economic policies, legislative measures and labour market outcomes for different groups of women and men.

One of the most important tools at the disposal of the ILO is gender mainstreaming. Although an established policy of the United Nations system and a methodology that is widely used in other organizations and programmes, gender mainstreaming is still at an incipient stage in the ILO.

An integrated gender policy requires action at three levels in the ILO: at the political level, within technical programmes, and at the institutional level.

First, political support for gender mainstreaming requires far greater representation of women in the tripartite decision-making structures of the Organization, within governments, and in employers' and workers' organizations. The constituents must redouble their efforts to ensure the presence of women within the structures of the Organization and within their own bodies.
Second, the Office will take systematic steps to mainstream gender considerations into ILO programmes and technical cooperation. This will require gender impact assessment, supported by empirical research on key issues such as gender aspects of globalization and the changing nature of work. Gender concerns will also have to be reflected much more systematically in ILO information systems and statistical databases.
Third, institutional mainstreaming within the ILO must include gender-sensitive programming and monitoring systems, a strategically located and strengthened focal point system, and appropriate training and personnel policies which enhance career opportunities for women.

Enterprise promotion

A focus on the enterprise

Enterprises are the key to growth and employment in open economies. Their activities have an impact on all the areas of ILO concern and have a crucial bearing on future patterns of industrial relations, skill development and employment. A focus on the enterprise is essential if the ILO's work is to be informed by workplace practices and realities. The importance of small enterprises in providing jobs and improving working conditions has already been reflected in the proposal to create an InFocus programme in this area.

In many ways, the ILO is uniquely placed to tap the potential of enterprises and the business community. They are directly represented in the Organization. There is a new emphasis in the ILO on business and employer concerns. The ILO's Enterprise Forum has begun to attract growing attention in the business community.

Enterprise development

The ILO has already developed a wide range of enterprise-related programmes, with particular emphasis on entrepreneurship development, management training and small enterprise promotion. These programmes should be developed further, taking into account the role of employers' organizations and the services they can provide to their constituents in these areas.

Transnational corporations

It is now necessary to go beyond the small enterprise sector and respond to the needs of transnational corporations — the main vehicles for transfers of capital, technology and new work practices in the global economy. A possible subject is the area of corporate social initiatives. Business is facing intensified social pressures for good corporate practices, which have a direct bearing on consumer demand and corporate reputations through the media. While communications technology has greatly enhanced the value of brand names and corporate image, it has also greatly increased their vulnerability to public opinion. The larger corporations are concerned about these pressures not merely in terms of their own markets, but because they may be a political threat to existing trade and regulatory regimes. These social pressures also come at a time when the markets within which the corporation operates are no longer easy to define or control. Many enterprises have adopted their own codes of conduct, but business is facing its own problems of monitoring and supervision because of the growth of supply chains and subcontracting practices. Under these conditions, markets could easily become minefields. The essence of the problem is to combine the need of enterprises for a recognized external source of reference, with international measures which provide a consistent framework to benchmark individual initiatives. The ILO has a unique expertise to move forward in this area, while remaining attentive to existing legal obligations and to business sensitivities. Other possibilities include training for multicultural management of social issues and for socially sensitive restructuring, which could both become important new areas of ILO activity.

The ILO's business profile

To many in the business world the ILO remains a remote and impenetrable Organization. It must improve its public profile and make a strong case with the business community through better communication and improved access to its training, services and databases. The ILO has to position itself as the international centre for expertise and data of interest to business, in such areas as standards and codes, national legislative and industrial relations systems, occupational safety and health, and the dissemination of good practice in a multicultural context.

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A shared endeavour

This Report presents an ambitious vision, but its intention is intensely practical. It is to provide the ILO with the political, technical and organizational orientation it needs to move forward with optimism and self-assurance into the twenty-first century.

None of these proposals is simple. All of them are necessary. They will take time to implement. They call for exceptional effort by all concerned: a strong sense of common purpose among the constituents, a renewed culture of excellence among the staff, and a vigorous outreach to people and the world at large by the Organization as a whole.

Above all, the proposals demand a common commitment and a shared endeavour by both the Office and the constituents, if they are to succeed. This Report is, therefore, a living document, a signpost rather than a blueprint, to be developed through consultation and dialogue. It is, ultimately, a statement of confidence in that partnership.

This chapter translates the strategic vision of the ILO into programmes for action. It indicates the immediate priorities, as well as new initiatives for the future. It thus provides the wider perspective within which these priorities will be developed in the years ahead.

Strategic objectives of the ILO

The first section below covers fundamental principles and rights at work. It calls for renewed attention to ILO standards, as well as a fresh look at complementary means and instruments for achieving this goal. The effective implementation of the Declaration can be a major step forward towards a truly global attainment of basic rights. The second section concerns the creation of greater employment and income opportunities for women and men. The new global economy has shown an enormous potential for job creation when the conditions are right, as well as many dangers. New options need to be explored to promote an employment- friendly orientation in macroeconomic strategies, in the transformation of production systems, and as a means of reducing poverty and inequality. The third section takes up the issue of social protection. In an increasingly volatile economic situation, the perceived need for security becomes ever more important. Existing systems are under pressure, and the coverage of social protection remains a major preoccupation. Finally, the fourth section explores the issue of social dialogue and tripartism, examining ways of strengthening the institutional capacity of ILO constituents as well as their contribution to the process of dialogue.

To promote decent work

These four objectives together define the ways in which the ILO can promote the primary goal of decent work. Decent work means productive work in which rights are protected, which generates an adequate income, with adequate social protection. It also means sufficient work, in the sense that all should have full access to income-earning opportunities. It marks the high road to economic and social development, a road in which employment, income and social protection can be achieved without compromising workers' rights and social standards. Tripartism and social dialogue are both objectives in their own right, guaranteeing participation and democratic process, and a means of achieving all the other strategic objectives of the ILO. The evolving global economy offers opportunities from which all can gain, but these have to be grounded in participatory social institutions if they are to confer legitimacy and sustainability on economic and social policies.

InFocus programmes

To achieve its objectives, the ILO must concentrate its efforts. It cannot do everything simultaneously, and so it must choose the areas in which to focus its resources. In the first instance, eight international focus (InFocus) programmes linked to the strategic objectives have been identified in the Programme and Budget proposals for 2000-01. Building on elements in the present work of the Office, they cut across existing departmental boundaries to concentrate a critical mass of research and technical cooperation in key areas. They will be developed in such a way as to complement and reinforce the work being done under each of the strategic objectives, and to bring greater coherence to the ILO's technical cooperation — as discussed in Chapter 3 of this Report.

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Human rights and work

ILO priorities in human rights

One of the hallmarks of the twentieth century has been the promotion of human rights. The ILO has made a major contribution to this process, but it needs to concentrate its efforts and to explore fresh approaches. It has three priorities. First, it will promote the Declaration on Fundamental Principles and Rights at Work and its Follow-up. Second, it will step up the struggle to eliminate child labour. Third, it will renew its work on ILO standards. In all cases, the aim is to promote development with human dignity and social justice.

Promoting the Declaration on Fundamental Principles and Rights at Work and its Follow-up

Declaration on Fundamental Principles and Rights at Work

In June 1998 the International Labour Conference reaffirmed its commitment to the founding ideals of the ILO when it adopted the Declaration on Fundamental Principles and Rights at Work and its Follow-up.

The Declaration is a pledge by all Members to respect, promote and realize in good faith the principles and rights relating to:

freedom of association and the effective recognition of the right to collective bargaining;
the elimination of all forms of forced or compulsory labour;
the effective abolition of child labour; and
the elimination of discrimination in respect of employment and occupation.

Application of the Declaration

Declarations are instruments that the ILO has used sparingly. Unlike an international labour Convention, which binds only Members that ratify it, the Declaration applies automatically to all countries that have accepted the ILO Constitution, whether or not they have ratified the fundamental Conventions of the ILO. All countries are encouraged, however, to move towards ratification of these Conventions.

Safeguarding and respecting basic workers' rights

The Declaration responds to a widespread concern that economic growth should be accompanied by social justice.

The World Summit for Social Development in Copenhagen in 1995 voiced this concern with a call to safeguard and respect workers' basic rights. The Ministerial Meeting of the World Trade Organization in Singapore in 1996 then reaffirmed the ILO's role as the competent body to set and deal with core labour standards. The ILO has taken up this challenge by adopting the Declaration, a central policy guidepost to development.

A point of reference for the global community

The Declaration also serves as a point of reference for the entire global community — for employers' and workers' organizations, lawmakers, NGOs, global companies and other international organizations. Indeed, the Declaration mandates the ILO to encourage other international organizations with which it has established relations to help create a climate for economic and social development that respects fundamental principles and rights at work.

InFocus programme on the Declaration

To promote the Declaration the ILO will launch an InFocus programme — to raise awareness, to deepen understanding, and to promote policies to implement its principles in ways that are gender-sensitive and development-oriented (box 2.1).
 

New information for technical cooperation and development

The Follow-up to the Declaration will provide the ILO with new channels of information. These will include annual reports for countries that have not ratified the relevant Conventions, as well as global reports covering both ratifying and non-ratifying States. They should aid in identifying areas for technical assistance to help countries realize the fundamental principles and rights. The Declaration will therefore inspire the ILO's technical cooperation and advisory services, offering practical assistance to governments, employers' organizations and trade unions. At the same time the Organization will utilize the information available to deepen understanding of the interactive processes between these principles and rights and social and economic development.

Progressive elimination of child labour

Child labour worldwide

Child labour is a pressing social, economic and human rights issue. As many as 250 million children worldwide are thought to be working, deprived of adequate education, good health and basic freedoms. Individual children pay the highest price, but their countries suffer as well. Sacrificing young people's potential forfeits a nation's capacity to grow and develop.

ILO standards on child labour

The principle of the effective abolition of child labour contained in the Declaration builds upon existing ILO standards, including the Minimum Age Convention, 1973 (No. 138). Existing standards would be strengthened by the adoption of new instruments on the elimination of the worst forms of child labour in June 1999. Such a progressive approach reflects the recognition that child labour is a complex problem rooted in poverty and lack of educational opportunities.

International Programme for the Elimination of Child Labour

It will also provide an agreed legislative framework for future ILO operational action through its International Programme for the Elimination of Child Labour (IPEC). The distinguishing characteristics of IPEC are partnership and complementarity. It involves many different groups, including governments, employers' and workers' organizations, NGOs and multilateral agencies such as UNICEF — a degree of institutional diversity that has lessons for other activities of the ILO.

IPEC's work

IPEC also complements several ILO programmes, such as those concerned with the informal economy, with small and medium-sized enterprises, and with gender. An important component of IPEC is data collection. Statistical work will be intensified by collecting time-series information, disaggregated by age and sex, that can be used to target programmes and projects and permit more precise monitoring of progress. This should include measurement of the extent of child labour as well as its impact on development.

Improving IPEC's operations

Success has brought its own problems. The rapid growth of IPEC has highlighted the need for an early review of its operations to ensure programme balance and coherence, adequate logistical support and interface with other ILO programmes, and improved dialogue between donors, recipients and constituents.

InFocus programme on the progressive elimination of child labour

The InFocus programme on the progressive elimination of child labour (box 2.2) goes beyond trying to stop children from working. It seeks to promote development by providing adequate educational alternatives for children and access to decent work, sufficient income and security for their parents. The programme will focus on the worst forms of child labour and will strengthen its gender dimension. It will pay special attention to priority target groups, including the girl-child labouring in intolerable conditions and hidden work situations such as in the sex trade and domestic service.
 

Development and the elimination of child labour

Ending child labour is a goal in itself; but it is also a powerful way of promoting economic and human development. Eliminating child labour will permit more investment in human capability, promote the ideals of decent and dignified work, and help alleviate poverty. Conversely, development increases household incomes, promotes better access to education and creates decent work for adult family members, thus in turn helping to eliminate child labour.

Renewing work on labour standards

Most ILO standards are not well known

ILO Conventions and Recommendations are a vital source of protection for working people all over the world. However, except for a handful of Conventions, most ILO standards are not well known. Ratification is also a growing problem because of treaty congestion. Of the 23 Conventions and two Protocols adopted in the 15 years from 1983 to 1998, only three have received at least 20 ratifications. Even when ratified, many Conventions are only weakly implemented.

The need to reinvigorate international labour standards

If the ILO is to ensure its continued relevance in this field and reassert the usefulness of international standards, it will need to reinvigorate its efforts and experiment with new approaches. Fortunately, the Constitution of the ILO offers a wide range of action and provides the necessary tools. This work is already under way, having started at the 1994 session of the Conference and continued at subsequent sessions and within the Governing Body, especially as concerns the revision of standards. This debate should be extended and deepened.

How to enhance ILO work on standards

A number of actions are necessary to raise the profile and increase the relevance of the ILO's work on standards:

preparing the ground for new standards more thoroughly;
exploring new methods of standard setting;
engaging in deeper analysis of existing standards, their synergy, lacunae, and impact on various groups;
accelerating the revision of outdated instruments to build on progress already made and promoting priority standards as problem-solving tools;
stepping up efforts to help countries implement ILO standards;
enhancing the impact of the supervision of standards; and
reasserting the role of ILO standards in the broader world context.

Re-evaluating standard setting

The process of standard setting itself needs to be re-examined. This requires closer consultations with ILO constituents, taking the concerns of all regions into account and making full use of developments in communications technology. But it will also require more broadly based technical work that analyses proposed standards in terms of their potential impact on economic and social policy, including gender concerns, and their complementarity with other international instruments.

Choice of suitable subjects for standards

At the outset, there is the question of choosing suitable subjects. International labour Conventions create binding obligations on countries that ratify them. They are powerful instruments. But not every problem can best be resolved by a legal response, so when considering potential new standards the Organization should also explore other ways of addressing problems.

Reassessing existing Conventions

Potential new standards must of course be considered in relation to existing instruments, whether in the ILO or elsewhere. Thus, long-standing ILO Conventions need to be reassessed to see how they cope with contemporary developments, such as the expansion of the informal economy and the trend towards more precarious forms of employment. New standards may then supplement them where warranted.

The example of social security

Changes in the labour market and in family life are posing a challenge to many ILO standards. An important case in point concerns the numerous instruments on social security. The Social Security (Minimum Standards) Convention, 1952 (No. 102), was adopted when most workers in industrial economies were in regular, full-time employment and there were fewer divorces, separations and single parents. Schemes based on this model continue to penalize women, who have often not been as long in continuous employment as men. With the increased precarity of jobs, such schemes also afford protection to fewer men. The challenge will be to find solutions that increase protection and embrace respect for the basic principles of social security.

Supplementing the framework Conventions

One approach to standard setting that deserves more thorough investigation is that of framework Conventions. These Conventions cover a subject's essential and unchanging principles. However, to deal with new circumstances such as changes in labour markets, demography, technology or work organization, framework Conventions can be supplemented with more specific instruments that can be updated more frequently. For instance, the guiding precepts in the Occupational Health and Safety Convention, 1981 (No. 155), are supplemented by consensus codes of practice specific to each sector. This approach could also take into account regional differences; experts from each region could identify universal elements that should be part of a framework Convention, while highlighting others that reflect regional traditions and should be embodied in supplementary non-binding instruments.

Flexibility

Other opportunities for flexibility, which the Organization might pursue in greater depth, are provided by the Constitution. Ideas outlined by the Director-General's Reports to the Conferences in 1994 and 1997 also merit careful attention. And the ILO might gain further inspiration for innovation from the standard-setting techniques used by other bodies.

Reconsidering the process for adopting standards

The ILO could also reconsider the process for adopting standards. At present this is highly stylized, often using procedures that are not conducive to compromise. In this case the Organization could draw on its experience of designing approaches to the prevention or resolution of labour disputes, using methods that respond to the divergent and convergent interests of stakeholders. The Night Work Convention, 1990 (No. 171), illustrated this potential, arriving at a compromise that took into account constituents' concerns for both gender equality and worker protection. A similar approach could be extended to other topics that have so far defied consensus, such as the revision of ILO instruments on working time.

The wider context of international law

New standards need to be considered in the wider context of international law, since many other organizations and international conferences have produced treaties on related issues such as the environment and human rights. The proposed new Convention on the worst forms of child labour, for example, has been developed in this way — taking into account not just ILO Conventions but also other instruments. A similar approach has been taken in the report on migrant workers submitted to this session of the Conference, as well as with respect to the proposed revision of some ILO Conventions relating to chemicals and hazardous substances.

Reinvigorating promotional efforts

Setting standards is of course only the start. The ILO needs to reinvigorate its promotional efforts to see that standards are ratified and applied. This means ensuring that Conventions and Recommendations are well understood, by producing clear and effective publications and by reaching out beyond labour ministries, employers' organizations and trade unions to other groups, including parliamentarians, law reform commissions, judges, business leaders, NGOs, women's groups, students, academics and the unemployed. It is especially important that governments understand that ILO Conventions have built-in mechanisms for flexibility — a potential that few of them explore.

Concentrating attention on high-impact standards

One major problem for ratification is that parliaments all over the world often have a long list of items awaiting attention — not just ILO standards but also many other bilateral and multilateral instruments. In this competitive environment it is important that the ILO concentrate its attention on high-impact standards to make them stand out from the pack. The Declaration on Fundamental Principles and Rights at Work and its Follow-up has performed an important role here by highlighting core labour standards. The Governing Body has further identified as priorities a handful of institutional standards, including those on tripartite consultation, on labour inspection and on employment policy. The social partners may wish to single out others for special attention, and the InFocus programmes may also be of assistance.

Assisting governments to implement Conventions

The ILO needs to be more proactive when it comes to implementation, assisting governments in giving effect to the Conventions they have chosen to ratify. At the formal level this could mean helping governments revise their labour legislation and improve their inspectorates. A key way to promote implementation is to ensure that everyone appreciates the value and use of standards. They should, for instance, understand that health and safety standards not only save lives but also increase productivity. When people realize that standards are not burdens but tools, they will be more willing to put them into practice and embed them in national development strategies.

Labour standards as part of a policy package

Standards shown to play a useful role in the labour market can be taken into account as part of a policy package that incorporates broad social concerns as natural complements to economic measures.

This message is reinforced when Conventions are seen to support successful solutions to problems — bringing parties together to achieve a shared goal. They can even inspire peacemaking efforts. In 1996, for example, the social partners rallied support for the United Nations peace negotiations in Guatemala on the basis of the Indigenous and Tribal Peoples Convention, 1989 (No. 169). An earlier example of conciliation was the successful use of the ILO's good offices with the Governments of Egypt, Libya and Tunisia in relation to the application of several Conventions to migrant workers. Now that the Organization has stronger field representation it should have further opportunities for this kind of conciliation.

Helping to implement non-ILO standards

In addition, the ILO should continue to help implement non-ILO standards. The ILO regularly contributes to work done under a wide range of instruments, including the Convention on the Elimination of All Forms of Discrimination Against Women, the United Nations Convention on the Rights of the Child and the International Covenant on Economic, Social and Cultural Rights. It has also provided valuable technical inputs in the labour aspects of trade arrangements such as MERCOSUR.

Enhancing supervision

Beyond promoting standards, one of the ILO's most important functions is to supervise them. Both inside and outside the Organization, the various supervisory mechanisms are generally perceived as independent, objective and impartial, but the system as a whole is increasingly bogged down under its own weight. Reporting under article 22 of the Constitution, for example, should be streamlined to make it easier for governments to handle, though without eroding its usefulness to employers' and workers' organizations. At times, the system is also too undifferentiated, giving equal weight to very serious issues and to those which are essentially matters of detail. The supervisory system would also be more valuable if it were able to move beyond an examination of legal texts.

Improving reporting

The presentation of reports could be further developed. The reports of the supervisory bodies would be even more helpful if they also reviewed the status of the standards situation in general, perhaps by region or by subject area. They would offer greater encouragement if they, and the supervisory system as a whole, highlighted more success stories and genuine efforts to improve.

Linking supervision with ILO technical cooperation and research

There should be greater opportunities to link supervision with other aspects of the ILO's work, particularly technical cooperation. Thus, well-substantiated representations and complaints under articles 24 and 26 of the Constitution, as well as serious violations found by the Committee on Freedom of Association, should prompt the Organization to reorient technical assistance to the problem areas, not in the sense of introducing conditionality but of offering better targeted support. The work of supervisory bodies would also have greater visibility and impact if it could be fed into readily accessible databases for use not just in technical cooperation but also in research. It could then be part of a general process of disseminating the work of the ILO's supervisory bodies to a wider public.

Codes of conduct

An important but distinct issue is the proliferation of "codes of conduct", voluntary initiatives that usually operate at the enterprise or sectoral level. These can complement, but do not replace, enforcement of national legislation and international standards. Voluntary codes could use ILO standards as points of reference and as sources of inspiration. This could include developing manuals for use with such codes, incorporating information on various Conventions, on the 1998 Declaration and on the 1977 Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy. Voluntary codes could then become complementary opportunities for the ILO to disseminate its principles and values.

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Employment and incomes

Employment is at the core of the ILO's mandate. Without productive employment, the goals of decent living standards, social and economic development and personal fulfilment remain illusory. While the ILO has the Employment Policy Convention, there is no consensus on the policies most likely to create jobs. For some the issue is one of growth. For others it is labour market flexibility. Some believe that the answer lies in human skills and capabilities, others in policies to share out available work.

Employment problems around the world

Employment problems are not easily summed up in bare figures. Global ILO estimates suggest that 150 million people are fully unemployed; but this is only the tip of the iceberg, for many more are forced to eke out a living in casual or occasional jobs, low-productivity self-employment or other forms of underemployment. Where open unemployment is low, closer examination often suggests that low-quality, low-income work takes its place, or that large numbers of workers — usually mainly women — are excluded from the statistics. Despite years of effort, this situation shows no sign of improving. On the contrary, many countries which could report success on the employment front a few years ago now face new problems. Unemployment has re-emerged in East Asia. Transition countries in Central and Eastern Europe face persistent labour market problems. In Latin America one can observe both rising unemployment and steady informalization. African employment problems remain intractable. Employment has grown in some OECD countries, notably the United States, but high unemployment persists in others.

Different causes

Persistent unemployment may reflect either a general problem of growth and development or a structural problem of labour market inequality. The current employment problems in East Asia derive in the first place from macroeconomic reversals, while sluggish employment growth in Europe over the last two decades can largely be traced to poor aggregate economic performance. But growth is only part of the story. Structural inequalities are just as significant. Even in the most successful economies, production systems include some and exclude others. Workers with the right qualifications and capabilities get access to productive, remunerative jobs, while others find that good jobs are permanently out of reach. So employment policy is important for income distribution.

Gender inequality in the labour market

Gender differences in the labour market are an important aspect of this inequality. Women tend to be concentrated in the lower-status and lower-paid jobs. They are also more likely to be out of work. Recent ILO figures (World Employment Report, 1998-99) show men's unemployment rates as being higher than women's in only 22 out of 70 countries for which sex-disaggregated figures are available. To overcome unemployment, it is necessary to pay attention to these basic structural problems. They will not disappear, because they are embedded in the way economic systems function.

Impact of globalization and technology on employment

Globalization and rapidly changing production systems create both major new opportunities and problems for employment. Businesses throughout the world have to respond ever more rapidly to new technology, new competitors, and erratic financial flows. This is often to the detriment of employment, especially in large enterprises, as work is reorganized to achieve productivity goals, or capital-intensive systems are introduced to meet the quality standards demanded on world markets. Rapid productivity growth, especially in industry, has led some observers to argue that the employment intensity of growth has declined permanently. ILO research does not support this contention, largely because of faster employment growth in other sectors, notably services. But there is increasing polarization of labour markets, as the demand for high levels of sophisticated skills increases, while pressures on costs simultaneously lead to a growth of low-paid, ill-protected and often transient workers. As a result, informalization has evolved in tandem with the growth of technologically sophisticated global production systems.

The policy framework

ILO work on employment policy

Employment policy is a field in which the ILO has a substantial capability for research and technical cooperation, built up over the last three decades. While resource constraints and organizational fragmentation have been limiting factors in recent years, major contributions continue to be made on the employment aspects of labour market policy, informal sector promotion, infrastructure development, training systems, gender policies, enterprise development and other domains. Recently, work on employment strategies undertaken as a follow-up to the World Summit for Social Development has brought these elements together in comprehensive reviews of national employment policy. These have highlighted the importance of developing employment policies through social dialogue.

New priorities in ILO employment policy

The new international environment calls for new priorities and a concentrated ILO effort to renew the combination of research and action in critical areas for the future development of employment policy, with full employment as the goal. There will be a specific concentration on three crucial determinants of employment: macroeconomic policy, the transformations of production systems and enterprise strategy, and equality of access to employment and to labour markets. In all cases the aim will be to mainstream employment objectives into national policies.

Macroeconomic policy and employment

Macroeconomic policy

Macroeconomic success is one of the primary determinants of employment growth. Both longer term growth and development and shorter term economic fluctuations have a major effect on the labour market. Making employment a core objective of macroeconomic policy is an essential ILO responsibility. Clearly the areas of macroeconomic policy reform needed for the fight against unemployment and poverty extend far beyond the ILO's immediate concerns and competencies. Nevertheless, macroeconomic policy is too important a determinant of employment to be ignored. Issues which require analysis by the ILO include:

Employment impact of financial shocks

The employment impact of shocks and fluctuations. While economic shocks will generally have an adverse effect on the labour market, the choice of macroeconomic instruments — fiscal, monetary, exchange rate policy — is a major determinant of the consequences for employment. There is a need to acquire a better understanding of the employment implications of such choices so as to inform decision-making.

Labour demand

Labour demand. Despite evidence to the contrary, a popular view remains that the employment intensity of growth is declining. More systematic work is required to identify the main sources of growth in labour demand in economies of different types, the relationship with overall patterns of trade, consumption and investment, and the implications for industrial policy.

Links between macroeconomic and labour market policies

The linkage between macroeconomic policy and labour market policy. Labour market reform may be an important complement to macroeconomic policy, by changing incentives, by reducing the impact of adjustment on poverty or inflation, and by providing institutions for dialogue and protection which offer legitimacy and resilience. Labour institutions in many developing countries have been too weak to cope either with the social consequences of crises or more generally with the effects of integration into the global economy. More needs to be done to strengthen these linkages.

Investment and labour markets

Investment and employment. The employment implications of financial sector regulation, and the ways in which labour market institutions influence perceptions of investors and their incentives, are an important area of work for long-term employment policies. These issues have so direct an impact on working life that no organization with a mandate to promote employment can afford to ignore them, a point underlined by the effects of recent economic crises on employment and incomes. In these circumstances the ILO must play a more active role in analysing current economic prescriptions and institutional frameworks, alerting policy-makers, workers and employers to the implications of their choices, and suggesting workable alternatives.

Improving international governance

While a widening of ILO expertise will help support employment policy at the national level, these are issues for which the international community as a whole needs to develop new and more socially relevant structures of governance. Increasingly, the integration of global markets for goods and capital implies that national macroeconomic policy has to be set within internationally coordinated efforts, either within regional integration or at the global level. The ILO has a major contribution to make to this new institutional architecture.

ILO role in information and analysis on employment

The key elements in this effort are information and analysis. The Office must establish itself as the world's leading source of aggregate, up-to-date employment information, illuminating public debate, guiding public policy, and building social concerns into the development of macroeconomic policy. It should undertake regular analyses of macroeconomic trends and policies, including both short-term stabilization measures and longer term development policies, identifying trade-offs between employment and other goals, the implications for gender equality, and other priority concerns. It should also highlight these as matters for both tripartite discussion and public debate. This analysis, complemented if necessary by short- and medium-term projections, will provide a basis for clear public positions on policy priorities at the national and international level. The ILO has already made a significant advance in publishing a series of World Employment Reports. These will continue, analysing in depth priority macroeconomic concerns and taking full account of the cross-cutting priorities of gender and development.

Promoting employment in changing production systems

Transformation of production systems and labour markets

The other major factor driving employment trends is the transformation of production systems and labour markets. Growing pressure in favour of adaptability from both enterprises and workers is changing the rules of job creation. Many sectors have been radically affected by globalization, with different stages of production scattered across countries and suppliers. A new wave of information and communication technologies is reshaping the way some people work and live, creating new, geographically dispersed occupations and destroying others. Knowledge and continuous learning are increasingly seen as the key to business success.

Employment impact

Much of this change is being led by transnational corporations which are responsible for global transfers not just of capital and technology but also of new work practices, through production chains that have a major impact on employment, on skills creation and on gender roles. These transformations in production systems are creating new opportunities. But at the same time growing competitive pressures foster informalization, and growing numbers of workers are entirely excluded from the process of change.

Adapting to change

These developments are crucial for employment policy. Decent jobs will be created when firms and workers are able to adapt and acquire new capabilities so as to take advantage of new opportunities. Employment policies must anticipate technological and institutional change, so that workers are equipped to move into new jobs and enterprises have the skills and incentives to create them.

The role of small firms

In these changing production systems small firms are playing an increasingly important role as links in the chain of suppliers, as part of the local network of producers or, less positively, as lower productivity alternatives for those who fail to gain access to formal sector employment. Though large corporations have a major influence on job creation, in fact most new employment is created in small enterprises. These may involve anything from a single self-employed person in the informal sector to complex production units employing dozens of wage workers. Plenty of these jobs provide secure incomes and a decent working environment. But there are many poor jobs as well, low in productivity, dangerous or lacking in basic social protection. Women are particularly over-represented in such categories. The heterogeneity of this sector epitomizes its policy challenge.

InFocus programme to boost employment through small enterprise development

Various initiatives have developed or are under way within the ILO to promote employment and productivity in the informal sector and in small enterprises. These efforts will be brought together as the nucleus of an InFocus programme in this area (box 2.3).
 

Enterprise restructuring

The focus on the enterprise will be a key element in the ILO approach to job creation, an important aspect of which would concern enterprise restructuring. In many countries structural adjustment and changing competitive advantage seem to be driving a continual process of restructuring of larger enterprises, which generally means downsizing. This has affected millions of employees, particularly in North America and Europe, but also in many middle-income countries. However, studies now show that the way this occurs often adversely affects organizational performance and results in repeated downsizing. Senior managers report that downsizing has not just eroded morale and trust, but also reduced productivity. All this suggests that there is both employer and worker interest — and hence prospects for partnership — in developing restructuring strategies that maintain the human resources and energies of the enterprise by giving adequate attention to the human and social side of restructuring. The gender dimension is also important; in restructuring it appears that men are often the main losers.

Building consensus on restructuring

The ILO has a comparative advantage in developing and promoting approaches that build consensus on restructuring and maintain employee commitment and participation. The Organization must be ready with information and advice, showing how jobs can be saved without prejudice to economic goals and how new jobs can be created. It should also track the implications of technological change with the same objectives in mind.

Raising the quality of employment

A similar case can be made for more ILO work on the gain for both workers and employers of raising the quality of employment. As labour markets become more flexible, enterprises demand the freedom to adjust their workforce and conditions of employment to prevailing market conditions. They argue that attempts to provide greater protection for workers increase their costs, reduce their competitiveness and undermine their ability to create jobs. Many employers subscribe to broad universal principles, such as non-discrimination, for example, or the elimination of child labour, but they are less unanimous on some other labour standards.

Quality of employment and productivity gains

The ILO has always emphasized the importance of regulating labour markets, for preventing exploitation, promoting security, building consensus and encouraging social integration. But the Organization needs to go beyond the moral high ground and also make its case on economic grounds. Safe and secure workplaces do not just meet vital human needs, they also boost productivity and enable businesses to grow. If the institutional framework is right, secure workers invest more in themselves and in their jobs. Adaptability is necessary, and it sometimes leads to the loss of jobs and enterprises. But social policy can also be a productive factor, helping to raise productivity and improve the social environment. The ILO should therefore systematically marshal and synthesize the evidence that shows how employment quality can pay for itself through productivity gains. If the ILO can strengthen its work in this area it will have a firmer and more scientific basis for resolving apparent conflicts or trade-offs between the "quality" and "quantity" of jobs.

The pivotal role of education and training

In the context of changing production systems there is increasing recognition of the pivotal role of education and training for both economic and social goals. No society can succeed in a globalized environment unless its people have adequate knowledge and skills. These are vital not just for maintaining competitiveness and ensuring adaptable and productive enterprises but also for achieving personal and social development. In particular, a well-functioning system of education and training enhances both economic and social integration by offering opportunities to many groups who would otherwise be excluded from the labour market. This is especially important for promoting gender equality and overcoming many forms of discrimination.

Integrated strategies to build — and use — human capabilities

It is striking that lifelong learning and skill development are now widely regarded as the lynchpin of strategies to promote employment — striking, because it is also clear that attempts to generate employment through training programmes have often failed. What these experiences have demonstrated is that integrated strategies for employment promotion are needed that simultaneously build human capabilities and create opportunities to use those skills. Operating on the supply or the demand side alone is not enough.

Obstacles to developing integrated strategies

In fragmented labour markets, developing such integrated strategies is not easy. Flexible, mobile workers have little chance to develop their capabilities, and employers less incentive to invest in their skills. This then further heightens polarization, as workers without access to knowledge and skills are left even further behind. Both within and between countries the wage differentials between the skilled and the unskilled have been growing in recent years, so that inability to invest in skills and knowledge seems to be a major factor in growing global inequality. The key question is the best way to raise investment in skills and capabilities, especially for low-income countries and unskilled workers.

ILO training activities

In the past the ILO has been extensively involved in many aspects of training. The Organization's technical advisory services, including those of the Turin Centre, have been in heavy demand, particularly on training system reform and policies for displaced workers. However, apart from management training, there has been less activity at the enterprise level. Moreover, until recently training activity was undertaken separately from other work on labour market and human resource policies.

InFocus programme on investing in knowledge, skills and employability

In future, training will be set in a wider developmental framework. The most recent World Employment Report, which focused on training for employability, highlighted the need for new approaches and for integrating training with other policies to promote employment. Because of the importance of this issue, for both enterprises and workers, a new InFocus programme will aim to make access to learning the backbone of efforts to promote more and better jobs (box 2.4).
 

Working time

A final issue that should be considered for future activities is working time. This has always been at the core of the ILO's concerns, but there are a series of new developments which call for attention. New work schedules are emerging with changes in the economy and in society. There are new production systems, new combinations of family, community and market work, new employment relationships based on information and communication technologies, new needs for continuous learning. Changes in working time are widely seen as a means of promoting employment or raising its quality, but this relationship is far from straightforward, and in many situations working time is lengthening. There appears to be a trend towards greater diversity of working time patterns, and existing labour market regulations and institutions have increasing difficulty in accommodating them. More attention will be given to this issue, which has important implications not only for employment but also for all the ILO's strategic objectives.

Promoting widespread access to jobs and incomes

Access to jobs and incomes

Promoting employment requires greater equality of access to jobs and incomes. Current global trends seem to be intensifying rather than reducing inequality. Employment policies are required which favour universal access to jobs and incomes, both to reduce poverty and exclusion and to take full advantage of human capabilities in the creation of income and wealth.

Unequal access to labour markets and inadequate employment

The InFocus programmes on small enterprises and on skills and knowledge mentioned above address the issue of inequality. Two aspects of this issue deserve attention. The first concerns structural factors which cause unequal access to labour markets. They are directly responsible for both unemployment and inadequate employment, and demand continued attention. Second, much poverty can be simply traced to inadequate employment, and employment creation programmes therefore continue to play an important role in combating it. Neither of these areas of work is new, but both need to be continued to provide an important complement to the broader macroeconomic and production system issues outlined above.

Gender inequality in employment

Workers are not randomly distributed across types of jobs and labour market situations. The jobs they do are strongly affected by such factors as their race, ethnic origin, caste, age or gender. Gender is a ubiquitous source of labour market inequality. Women form the majority of unpaid, atypical, or discouraged workers. ILO research and advocacy has focused on this issue over many years, but it needs to be built more effectively into employment policy. Because gender inequalities are so pervasive, they cannot be dealt with in an isolated fashion, but need to be considered in relation to each and every aspect of the employment problem.

More and Better Jobs for Women Programme

The Organization is responding to this issue through a variety of programmes and actions. The programme on More and Better Jobs for Women is developing integrated approaches to women's employment, highlighting the linkages with poverty eradication, the effective use of human resources and the reduction of child labour. The stress on better jobs reflects the need to address both the quantitative and the qualitative dimensions of employment relationships. The programme leads to national action plans for creating an enabling economic and social environment for women's employment and making targeted interventions to improve labour market access for specific vulnerable groups. Eight national action plans have already been prepared in close collaboration with the social partners, and many more are planned. A variety of projects on different aspects of women's employment are under preparation or being launched.

Gender, Poverty and Employment Programme

Another important ILO programme is concerned with gender, poverty and employment. This aims to ensure that all development policies and programmes reflect gender and employment priorities. It focuses particularly on vulnerable groups, largely women, such as homeworkers and "hidden" workers in the informal economy, and promotes strategies for increasing the quality of their employment.

Building gender perspectives into research and action

These and other such programmes will be part of the cross-cutting policy to build gender perspectives into research and action throughout the range of ILO activities concerned with employment and enterprise.

Youth unemployment

Unequal labour market access shows up particularly in the employment difficulties of young people, both men and women. Young people are more frequently found in irregular and casual employment, and their unemployment rate is generally much higher than that of adults. In 1997 in the OECD countries, unemployment in the 15-24 age group averaged 13 per cent, twice the adult rate. In developing countries the rate of unemployment of urban youth can reach 40 per cent or more. Youth unemployment is not a problem that can be solved in isolation, for it is not only a question of employability but also the result of lack of demand for labour, and of the unequal ways in which labour markets distribute opportunities. Improving the school-to-work transition requires action on both the demand and the supply side. The InFocus programme on investing in skills, knowledge and employability will pay particular attention to this issue. Many governments have put in place active labour market policies designed to help young people, and recent ILO programmes have evaluated the impact of these programmes; so this is a subject on which the Organization is well placed to offer technical advice.

Employment problems of other vulnerable groups

There are a number of other groups of workers who are particularly vulnerable to labour market inequality. Older workers who are displaced from regular, protected jobs are often excluded prematurely from work, or end up in precarious jobs. Disabled workers face equally serious problems. The InFocus employment programmes will also address efforts to deal with the needs of these groups. Thus, the programme on small enterprises will aim to open employment opportunities for them, and the programme on knowledge and skills should be of particular significance for all groups.

The role of employment services

Employment services have a great deal to offer in overcoming labour market inequality. Ideally, they should be integrated with labour market policies, training and unemployment insurance within a single, consistent framework. These are issues that need to be dealt with together so as to deliver a coherent package of public information, counselling, placement and training services, capturing both the supply and the demand side of the labour market. An integrated approach would be particularly important for workers displaced by economic restructuring — an issue that will be addressed in the InFocus programme on skills. Integrated action is also important for other groups that face longer term labour market disadvantage. A greater effort to extend support to national policies in this field is needed, and the ILO could take the lead in promoting further research at the international level on how best to develop the necessary integrated institutions.

Employment policy and poverty

The final issue in this section is the contribution of employment policy to action against poverty. Reference has been made in Chapter 1 to the need to address the problems of the working poor as a matter of priority. The ILO has been widely involved in direct assistance to the development of strategies for job creation and income generation in low-income settings. These policies have included the raising of production capabilities in small urban and rural enterprises, local development initiatives, a variety of measures to raise labour absorption in the rural economy, and a range of employment-intensive infrastructure schemes.

Employment through improving infrastructure

Many developing countries can achieve multiple benefits with carefully designed schemes for improving roads, irrigation, sewerage and other infrastructure. As well as providing facilities of value to the whole society, schemes that use labour-intensive methods generate employment for large numbers of poor people, often mobilizing small, informal enterprises where many of the poorest workers are concentrated. Their poverty reduction effects are further amplified if the facilities are specifically beneficial to low-income groups or lead to improvements in their land, houses or other assets. The livelihood of the poor is steadily undermined by soil erosion, water pollution, deforestation and other forms of environmental degradation. More attention needs to be paid to these ecological and environmental issues, which have an important effect on employment. Environmental regeneration is itself a major potential source of employment and, in the longer term, environmentally sustainable development will also lead to sustainable job creation. Programmes that restore the environment thus not only confer benefits on society at large but also build more sustainable livelihoods for those who work in these environments. More work is required to explore these possibilities.

Expansion of social services

Governments can also generate employment by expanding social services. By investing in such areas as health, education and nutrition and in technical and vocational training they achieve social employment benefits. Most immediately, they create jobs for local health workers or teachers. But there are also the long-term employment gains; a healthier, more educated, and higher skilled population is the surest route to higher productivity and better standards of living.

Comprehensive policy packages

For many years the ILO has supported research and technical coope