HIGH-LEVEL TRIPARTITE MEETING

ON

THE NEXUS OF GROWTH, INVESTMENT AND DECENT WORK

FOR SOUTH ASIAN SUBREGION

BACKGROUND :

Promoting effective response to the unprecedented and growing disconnect between growth, investment and decent work poses a major policy challenge for successful integration in today’s globalising economy. Despite returning to reasonable growth rates, most regions of the world are experiencing a decline in the employment content of economic growth Global economic growth was a robust 4.3 per cent in 2005 while the open unemployment rate continued to remain at 6.3 per cent. This trend is worrisome since it occurs against the background of a 22 percent increase in the number of people unemployed globally in the last ten years. These tendencies are also manifest in a declining share of labour income in national outputs. What is worse, new jobs being created for millions hardly yield sufficient earnings to permit a living above poverty line. About 50 per cent of global workforce earns up to 2 USD per capita per day for them and their families – the same as it was a decade ago.

Growth is certainly essential for employment generation, but it is not enough. Policies that place emphasis on growth, at macro and sectoral level, have left important issues relatively under-researched. These include how policy mix, policy sequence and policy coherence can enrich the employment content of growth. There is a need, therefore, for policies to integrate around the key relationships that underlie the trinity of growth, investments and decent jobs. The apparent disjunction between growth, investment and jobs potentially undermines the prospect of achieving the MDG on poverty reduction.

At the World Summit on Social Development, held in Copenhagen in 1995, world leaders committed themselves to the goals of putting creation of employment at the centre of economic and social policies of governments. In 2000, the 24^th session of the United Nations General Assembly on the follow up to the World Summit reaffirmed the same objective. In pursuit of this goal, the General Assembly recognized the need for “a coherent and coordinated international strategy on employment” and supported “…the comprehensive International Labour Organization programme on Decent Work…”¹ In July 2006, the Ministers on the UN’s Economic and Social Council invited all international organisations, including the IMF and the World Bank, to give explicit consideration to how their activities can contribute to the goals of full employment and decent work for all.

Emerging from this context, the proposed PCI meeting for the South Asian sub-region, would bring together policy makers (Governments); representatives from the employers and the workers organisations; multilateral institutions including the IFIs; donor communities and researchers for a technical discussion to identify the major constraints to achieving employment-rich growth in order to bring out the main policy issues facing the countries of this subregion.

The proposed meeting is a sequel to six technical Policy Coherence Initiative (PCI) meetings organised earlier by the ILO at the global level with other multilateral agencies. At the subregional level, a tripartite workshop was held by the ILO at Johannesburg in December 2005 for the Southern African subregion on the nexus of growth, investment and jobs. The ILO Governing Body meeting held in November 2005 was informed of this workshop, where suggestions were received to organise a PCI meeting for the South Asia subregion (includes seven countries : Afghanistan, Bangladesh, India, Iran, Nepal, Pakistan and Sri Lanka)

OBJECTIVES :

The proposed meeting will tap the knowledge of the ILO constituents, other multilateral institutions including the IFIs, the donor community and researchers on the policy linkages between growth, investment and employment to formulate a strategy for achieving employment-rich growth for the countries in the South Asian subregion.

The current policy scenarios in South Asian countries relating to the relationship between policies on growth, investment and employment (quantity and quality) need to be better understood and articulated. There is also scope for improved policy coherence to lead to better decent work outcomes.

It is in this context that the meeting will explore

The disconnect between economic growth and employment growth at national levels.

The extent to which employment is central to macro-economic policies. If not, what are the ways and means of achieving this? What are the trade-offs with other potential policy objectives (such as price stability, balance of payment equilibrium etc.)? How is employment reflected in financial, investment and commercial policies?

The question of labour productivity growth and its apparent trade-off with employment growth. Is this trade-off essentially a short run phenomenon?

What have countries done so far and what do they plan to do to improve the growth and employment links and better policy coherence.

The proposed meeting will, therefore, focus on the policy mix, policy coherence and policy sequencing at the national and subregional levels that would strengthen the growth-investment-employment linkages and address the potential obstacles to strengthening these linkages.

EXPECTED OUTCOMES :

The discussion and exchange of experiences would be expected to enhance the knowledge base of ILO constituents, donor communities and other multilateral agencies on:

Experiences of different countries in the subregion vis-a-vis policies on growth and employment and apparent causes for the disconnect, if any; and

Identifying the best cases of policy alignments and employment growth that would help to achieve Decent Work objectives.

This meeting, which will examine the disconnect between policies promoting growth and jobs in South Asia, will be an input for the proposed ILO Regional Asia Employment Forum meeting scheduled to take place in Beijing in the second half of 2007.

PARTICIPATION :

High-level participation is intended from the ILO constituents (Governments, employers and workers) the multilateral institutions, donor community, and academia. Since the discussion will be technical, the presence of delegates with established credentials in the technical areas of expertise in the chosen theme will be important.

STRUCTURE :

The meeting will be organised on the basis of: (1) background paper on the theme prepared by ILO and (2) individual country papers dealing with the country specific situations relating to the theme.

Technical contributions are expected from other multilateral organisations and selected donors in the form of papers. Lessons can be drawn from the employment impact assessment of their policy advice and programmes.

TIME AND PLACE :

Two days in Delhi – 3-4 April 2007.

ILO, November 2006

¹ Commitment 3 of the 24th Special Session of the General Assembly, United Nations, document A/RES/S-24/2.