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I would like to welcome you all to today’s events centred on the theme Developing with Jobs.
That was the theme of the ILO World of Work Report for 2014 which was issued just before this Conference began. Our report, which I hope you picked up on your way into the Conference Hall if you have not already seen it, shows the close linkages that exist between achieving economic and social development and investing in quality jobs.
Let me then say a few words about why we chose to focus on that subject in our report this year and why we selected it for today’s discussion:
First and fundamentally, we have seen time and again that a conventional approach to development does not produce jobs in the quantity and quality needed. It does not seem to be enough to focus only on export-led growth, trade and foreign direct investment in order to trigger development. The ILO report finds that on its own, such an approach risks leading to a narrow pattern of economic growth with limited decent job creation.
The rise in unemployment among educated young people in developing countries bears testimony to the failure of strategies that emphasize growth without job quality.
The lack of decent jobs has also been a central determinant of the increase in migration. The gap in wages between receiving and sending countries tends to be as high as 10 to 1, leading to the situation described in my Report to this Conference in which over 230 million people are living in a country other than the one in which they were born – practically four times more than was the case in 2000.
Secondly, I believe it is important to keep the focus on both the volume of job creation but also the quality of jobs – even if some may think it unrealistic when some countries are struggling with child labour, forced labour and a huge informal economy.
Some may say we need to focus on jobs first and quality later. But that we know does not necessarily follow. You know it well: the development challenges are interlinked.
The facts speak for themselves. Countries investing in quality jobs have done better than others from both an economic and a social point of view. The countries that invested the most in quality jobs from the early 2000s grew nearly one percentage point faster every year since 2007 than other developing and emerging economies.
And investing in quality jobs by reducing vulnerable forms of employment and tackling working poverty not only led to higher economic growth, but also tended to be associated with lower income inequalities.
Thirdly, the employment and social gaps remain significant:
- More than half the developing world’s workers, a total of 1.47 billion, are in vulnerable employment, either working on their own account or as contributing, often unpaid, family workers in a family enterprise. The issue is particularly acute in South Asia and sub-Saharan Africa where more than three out of four workers are in vulnerable forms of employment.
- While over the past two decades, the incidence of extreme working poverty in the developing world fell from 39 per cent to 13 per cent, nonetheless 839 million workers in developing countries are unable to earn enough to lift themselves and their families above the two dollars a day poverty threshold.
- And around 200 million new jobs are needed over the next five years to keep pace with the growing working-age population in emerging and developing countries.
So, what can be done to boost decent jobs that can also help to achieve development?
Ladies and gentlemen, our speaker and our panellists will be addressing these issues in a moment. But just a few considerations to start with.
First, there is strong evidence that social protection helps reduce the incidence of poverty, inequalities and vulnerable employment. Well-designed social security systems enhance individual capabilities to obtain better jobs.
For instance, the Bolsa Familia in Brazil, the Mahatma Gandhi National Rural Employment Guarantee Act in India, Ethiopia’s productive safety net programme, and similar programmes in other countries have been shown to be successful in providing supplementary incomes to households and a minimum wage floor which has helped them to improve their nutrition and also invest in productive activities as well as improve their health and keep children in school.
Second, development needs to be underpinned by an enabling environment for enterprises including supportive macroeconomic policies.
Enterprises create jobs and their actions also play a key role in determining whether those jobs are decent or not. In Asia, the experiences of several countries underline the potential of development strategies to foster production in collaboration with the private sector and strengthen the environment for enterprises.
Third, labour market institutions need to be strengthened.
These institutions provide essential ingredients of economic growth, for quality jobs and for human development. They further provide the basis to tackle the informality traps and pockets of under-development associated with the absence of workers’ rights and bad working conditions. Here too there are interesting recent innovations, such as the strengthening of labour market governance particularly in a significant number of Latin American countries.
And fourth, there is a need for ensuring balanced income growth to avoid destabilising inequalities.
In that regard, the evidence in the ILO World of Work report shows that lower labour income share can be detrimental to growth as a result of the effect on reduced consumption. That declining trend is not inevitable but can be reversed through effective policy interventions if we seek to make them. Of course, social dialogue is a crucial ingredient in this respect, as in the case of last year’s “new social contract” in Tunisia, for instance.
Finally, one more question before I conclude:
What does all this mean for the world’s development priorities for the post-2015 period?
Well, as you know, there is a long list of potential goals for the new UN post-2015 development agenda. But in my view the World of Work Report – based on an in-depth analysis of 145 emerging economies and developing countries — shows that decent work lies at the heart of any meaningful development strategy.
In short, there is a unique opportunity to make a difference to development dynamics and prospects. By making jobs and social protection a key goal of the post-2015 development agenda, the world economy would have much greater potential to make progress towards the objective of shared prosperity and inclusive growth.
And next on our agenda today, you have before you a highly distinguished panel. We are delighted to have them with us, and a most distinguished keynote speaker, Professor Nayyar who will I am sure challenge us, as he has done in the past, and contribute further to our discussions today.