Keynote address by ILO Director-General Juan Somavia at the ECOSOC Substantive Session 2-27 July 2012

Déclaration | New York | 2 juillet 2012
Final Check Against Delivery

Your Excellency, Ambassador Koterec,
Mr. Secretary-General,
Your Excellency, Ambassador Abdulaziz Al-Nasser,
President Niinisto,
Ministers,delegates, guests,

Thank you very much for the invitation to address this year’s high-level segment of the ECOSOC with its highly relevant focus on the role of decent work in promoting inclusive, sustainable and equitable economic growth.

May I say how delighted I am to speak in this session withPresidentSauliNiinisto of Finland, Dato' Azman Shah Dato' Seri Haron, President of the International Organisation of Employers, Sharan Burrow, General Secretary of the International Trade Union Confederation, and Danielle Fong, Chief Science Officer and Co-Founder LightSail Energy.

We have a number of excellent reports which set out starkly the challenges we face.

The 2008 global financial crash unequivocally exposed the market and social failures of a growth and globalization model that became progressively inefficient.

Let me just mention a few realities.

First, the political consequences ofunacceptably high levels of unemployment are ripping apart the fabric of many societies, both developed and developing.
Young women and men are especially affected, withyouthunemployment rates in some countries of over 50 per cent.

The signs of social discontent are very clear. They are telling us that growth with jobs, job intensive growth, is the priority of individuals, families and communities.

The fact that it is not happening is rapidly increasing in many places the disconnect between citizens on the one hand and government and private policy making on the other.

Trust in public and private decision-making has dropped significantly.

Second, the increasing financialization of the global economy since the 1980s has led to a progressive stagnation inproductive investment in the real economy, rising somewhat in emergingeconomies but dropping in developed countries.

We need to reverse this trend and put the financial system at the service of the real economy.

Yet four years into the crisis,there is a feeling that many governments do not have the strength or the will to rein in the unaccountable power that financial operators have acquired over the life of our societies.

It still looks like some financial institutions are “too big to fail” while many people are “too small to matter”.

Third, inequality has increased almost everywhere, leading to indecent levels of income and wealth concentration - just one figure: 3.5 billion people together have the same income as the 61 million richest individuals in the world.

These levels of inequality are no longer politically sustainable.

It’s high time for a policy rethink.

One thing is clear we will not get out of the crisis with the same policies that generated the crisis.

***

I think we are at a turning point. Allow me to explain why.

We are entering an era of social and popular mobilization that aims to project the voice and demands of citizens into the heart of political decision-making. The financial crash of 2008 was not just an unfortunate accident on an otherwise safe road.

It was a pile up caused by several features of the still prevailing growth and globalization model whose values were shaped in the 1980s and picked up increasing speed from the 1990s onward and into the 20th century.

Until it went out of control.

And that’s where we are today.

Suddenly, the beginning of the end of this cycle is abruptly upon us but a new model for fair, sustainable and inclusive growth and globalization has yet to be shaped.

Nobody today can confidently say where the global economy is going and who is responsible for guiding it towards a fairer, more stable world.

We find ourselves in what could be a prolonged period of uncertainty but also a potential period of creativity for the United Nations; governments and secretariat.

This is a moment for policy leadership by the United Nations.

Together we must grasp this opportunity to think creatively and construct a new growth pattern and set better rules for a fairer, greener and more sustainable globalization.

We need a global social contract, as called for by the Secretary-General; a global consensus around a new path for growth and globalization.

A path that is sustainable economically, socially, environmentally and, thus, politically.

This new path must serve the enduring UN goals of “we, the peoples”, recently reaffirmed in Rio +20, -- freedom, dignity, security and equity.

To that end, we must combine the strength of markets, the responsibility of enterprises, the skills of workers,the incentives and regulations of public policies and the power of social dialogue and civil society participation.

And above all, we need to think out of the box.

***

The focus of this Annual Ministerial Reviewisthus particularly timely and relevant.

Work is central to people’s lives everywhere.

Elections turn on whether people have confidence in political leaders’ ability to design and run an economy that delivers decent work.

When the world’s leaders come together to discuss how to generate strong, sustainable and balanced growth, the litmus test of their success in the eyes of the citizens that send them to the Summits is “what is this going to do for jobs?”

I believe that in this extremely difficult task, global political concern over jobs can be a unifying theme for international cooperation. All countries are concerned by it.

Stronger policiesto boost productive capacities, to create opportunities for decent jobs and to safeguard the incomes of working families are the launch pad for a new departure.

These policies are critical ingredients of a short-term response to the immediate political concern with thecurrent job recession.

At the same time, they are central to empoweringpeople and countries and strengthening their capabilities to develop, thereby settingsolid foundations for more inclusive and sustainable growth over the long term.

The ILO’s 2009 Global Jobs Pact, forged as the crisis was in full flood,and which has received generalized support, combines the experience of the actors of the real economy, governments, employers and workers organizations,with the lessons from tried and tested measures.

The Secretary General’s main report for this AMR contains several examples of successful programmes and policy initiatives. We can build on those.

***

Let me mention two policy products recently developed by the ILO that build on the Global Jobs Pact.

First, tackling youth employment
is a global imperative.

This was recently underlined in the outcome document of Rio+20.

In 2012, close to 75 million young people worldwide were out of work, 4 million more are unemployed today than in 2007, and more than 6 million had given up looking for a job. More than 200 million young people were working but earning under US$2 a day. Informal, temporary and vulnerable employment amongst young people remains pervasive.

Disconnected youth can be a main setback to inclusive and stable growth as well as social cohesion and democratic development.

At the ILO, we sought out the concerns of young people. We organized 46 national consultations with youth organizations involving 5000 youth leaders as part of preparing our most recent annual Conference which launched a Call to Action on youth employment.

I commend to you this policy proposal that was adopted unanimously last month at the ILO annual International Labour Conference.I believe it can become a major reference for action by the United Nations and the wider multilateral system.

It reflects the knowledge and experience of our government, worker and employer constituency but is also set in the perspective of a new growth and globalization pattern.

Second, effective social protection
is a key component of policies to sustain aggregate demand and employment, enhance resilience to shocks and reduce poverty.

The Global Jobs Pact called for countries to draw on a basic social protection flooras one of the “economic” responses to the crisis.

In a broader development perspective, to establish social protection floors, respecting the diversity of country situations, is about promoting human dignity. Around 80 per cent of people in the world do not have social security - they lack a solid platform to keep progressing on a strong footing.

The time is ripe for acceleration in coverage in social protection, beginning with a broad-based floor. We have the tools and the agreement for action. Last month, a new international labour standard was adopted unanimously by the ILO constituents, to set out a strategy for building nationally defined social protection floors. We hope that ILO Recommendation 202 can give impetus to major national and international initiatives.

The visionary report of the United Nations advisory group set up by the ILO and led by Michelle Bachelet has helped enormously in building this new global consensus. UN agencies and international organizations have already started strengthening cooperation in this area.

***

As well as such targeted initiatives we urgently need improved coherence and coordination.

Recasting national policies to achieve quality growth will require a blending of macroeconomic and employment policies, trade and development policies, social and environmental policies.

Country experiences confirm that such policies have reduced the damage done by the crisis and speeded recovery.

The process that started last month in Rioto work towards the establishment of “sustainable development goals” should be seen as the occasion to builda growth and globalization framework that is more coherent and better integratesthe critical economic, social and environmental dimensions.

Again, an opportunity for leadership by the United Nations for better policy integration.

An integrated approach on both policy formulation and policy implementation is essential if we are to progress towards inclusive, equitable and sustainable economic growth and development.

***

To conclude
, I believe it is not only time for a policy rethink, we also need to reconstruct the institutions of global governance and how they connect to national systems.

And our national political systems must think long term, stop divisiveness and show their capacity to come together on key national and international issues, to reassure citizens that they are the priority for policy-making.

The multi-polar world we live in relies heavily on the multilateral system to offer broad-based advice on how a new policy approach could fit together.

I am thinking here of the system that includes the UN, the specialized agencies, the international financial institutions and the regional bodies.

We face the challenge of constructing a policy consensus in which countries make commitments internationally which both add up to a global strategy and make sense nationally.

Another way of putting this is to ensure that countries have the policy space to act according to nationally specific circumstances but that such actions are mutually supportive.

That puts a heavy responsibility on the multilateral system to improve its capacity to organize collective leadership.I see three interlinked components of the task we face.

First
, we must refine and deepen the analytical capacity of the multilateral system to think in an integrated way.

It is the biggest source of collective knowledge we have on growth and globalization, except that it is not shared knowledge.

I believe we have underused the capacity we have, but I do see an opportunity in an overall response to the crisis, in the Rio +20 work and the reflections on the post 2015 agenda.But opportunities must be grasped.

Second
, we must the will to improve our negotiating and decision-making processes to make our system respond in a rapid and relevant way to current challenges which the impact of different and diverse national realities.

Third
, we must connect to people’s concerns. That mean’s listening well and acting quickly.

And this is ECOSOC’s task – it was created to do the job of thinking, coordinating and acting.

I warmly welcome the strong and steadypolitical support from the Economic and Social Council to the Decent Work Agenda, a fair globalization and the Global Jobs Pact.

Promoting policy dialogue, consolidating policy guidelines, disseminating lessons and encouraging international coherence are central tasks of ECOSOC and central tasks in crafting a growth and globalization framework.

We must ensure the Council is fully equipped, technically and politically, to take up the challenge of policy leadership.

So this is my last ECOSOC. I chaired your meetings two-and-half times and have long ago lost count of the number of sessions I have attended.

I am sure the ILO will continue to work closely with you and that together we can give the peoples of the United Nations the service they deserve.