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GB.272/4
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FOURTH ITEM ON THE AGENDA
Report of the High-Level Meeting on Social Responses
to the Financial Crisis in East and South-East Asian Countries
(Bangkok, 22-24 April 1998)
1. The High-Level Meeting on Social Responses to the Financial Crisis in East and South-East Asian Countries was held in Bangkok, Thailand, from 22 to 24 April 1998, in accordance with the decision taken by the Governing Body at its 271st Session (March 1998).
2. The Meeting was attended by 37 participants mainly from the eight countries and one Special Administrative Region invited, including 14 Government representatives from ministries of labour and agencies in charge of development planning, 11 Employer representatives and 12 Worker representatives. Representatives of three multilateral financial institutions (the Asian Development Bank (ADB), the International Monetary Fund (IMF) and the World Bank) also participated in the Meeting. Representatives of three international employers' and workers' organizations and nine intergovernmental organizations, and of several other countries, attended as observers.
3. The Meeting unanimously elected as its Chairperson Dato' Zainol Abidin bin Abd. Rashid, Secretary-General of the Ministry of Human Resources of Malaysia, and as its Vice-Chairpersons, Mr. Ashraf W. Tabani (Employer, Pakistan), and Mr. Rampak Zainal (Worker, Malaysia). Prior to the plenary debate, the Meeting heard addresses by the Director-General of the ILO, the Prime Minister of Thailand, H.E. Mr. Chuan Leekpai, as well as by the ADB, the World Bank, and the IMF. The closing speech was given by the Minister of Labour and Social Welfare of Thailand, Mr. T. Suwankiri.
Opening session
4. In his introductory address, the Director-General of the ILO pointed to the importance of this Meeting, held as it was at a crucial juncture in the economic and social history of Asia. It addressed the critical issue of how the social pain caused by the financial crisis could be relieved and a new and better economic and social model for development be forged in overcoming the crisis. The recent events provided a dramatic illustration of how powerfully and swiftly a major economic shock could be translated into a major social crisis. The significance of this was that it added a very strong social, and indeed moral, argument to the case for ensuring greater stability in the international financial system. But the strengthening of democratic institutions was likewise central to the post-crisis economic model. Free and fair electoral processes, freedom of expression and public debate, the rule of law, and accountability of elected officials were among the attributes of democracy essential for preventing the harmful distortion of market processes. Democracy was also essential for ensuring greater social equity in the development process. There had been a relative neglect of labour rights and social protection in the pre-crisis period of high growth. Social progress lagged far behind the spectacular economic progress achieved in the decades that preceded the current crisis. Little progress was made in developing social safety nets, in advancing basic worker rights, and in promoting social partnership. The unfortunate consequences of this unbalanced pattern of development were now plain to see. Because institutions for social protection were underdeveloped, the suffering of those adversely affected was that much greater. Similarly, the weakness of institutions of social partnership severely handicapped the search for a socially equitable and harmonious way of overcoming the crisis. There was no doubt that key elements for correcting this deficiency were the full respect for basic labour standards and the fostering of a strong and free labour movement. This would ensure constant democratic pressure to improve working conditions and levels of social protection. It would also be invaluable in ensuring smooth adjustment to structural change, in coping with economic and social crises, and in raising productivity and competitiveness. The Director-General spelt out his belief that the Meeting would be a turning point in shaping a new social contract in Asia. He had no doubt that economic growth would revive in the coming year or two; but it was crucial that this new growth model should rest on much stronger social foundations than in the past. The ILO stood ready to assist governments and social partners to face this challenge. In fact, the Organization was fortunate to have built up programmes under the Active Partnership Policy, which addressed many of the priority concerns now requiring urgent attention. The Office, especially the regional structure in Asia and the Pacific, had engaged in intensive consultations with ILO constituents and partners in each country. On that basis, the regular programmes of cooperation had been adjusted. Moreover, there had been encouraging examples of close cooperation, which should be intensified, between the ADB, the IMF, the World Bank and the ILO. In the specific case of the Asian crisis, there was a lot to be gained from social dialogue which, if it operated effectively and productively, could contribute to the formulation of general economic and social policies and to specific programmes for alleviating and resolving the effects of this crisis.
5. In his opening address, His Excellency the Prime Minister of Thailand (Mr. Chuan Leekpai) thanked the ILO for organizing this timely Meeting and underlined its importance in respect of the social consequences of the financial crisis now confronting much of East and South-East Asia. While there had been some encouraging signs of a turnaround in many of the affected economies, including Thailand, the repercussions had yet to be fully felt in terms of rising unemployment and increasing pressures upon social services. The crisis had hampered ongoing efforts to alleviate poverty as well as to provide better social protection for all sectors of society, particularly those most disadvantaged. He stressed that sustained development could not coexist with social inequalities and the deterioration of human resources. Equal importance must be given to both economic and social development. One of the Thai Government's main priorities had been the prevention and alleviation of the unemployment problem. A comprehensive labour policy and employment schemes -- focussing upon labour market information, skills training, job creation and placement, wages and social security systems, and industrial relations -- were necessary if one was to address effectively the unemployment situation as well as achieve economic growth and social justice in the long term. National action, however, had to be complemented by cooperation at the international level. New and innovative means of tackling the challenges had to be found. As people were the most important resource, it was necessary to examine how economic and trade policies affected employment, productivity, human resources development, and social welfare. The Prime Minister continued by saying that Thailand attached great importance to tripartite cooperation. It was his firm belief that employers' organizations and workers' organizations, as partners with the Government, had a crucial role to play in planning and supporting national developmental efforts. Workers' organizations, while protecting and promoting the legitimate rights of workers, should also join hands with employers' organizations to achieve safer workplaces and adequate protection. Their cooperation was necessary in order to achieve higher productivity, improved labour-management relations and a more equitable sharing of gains. It was the responsibility of governments to ensure that laws and practices governing industrial relations enhanced economic efficiency and benefited employers and workers alike. Here, the importance of international labour standards should be recognized. In an era of increasing globalization and market liberalization, these concepts were all the more relevant and could support national development strategies. The Prime Minister concluded by calling on the Meeting's participants to work together in order to rebuild economies, to meet social obligations, and to share the prosperity that could be made possible through increased global integration and technological innovation.
6. The representative of the ADB (Dr. K.F. Jalal) emphasized the need to strengthen the partnerships between the various stakeholders attending the Meeting and outlined the relief measures accorded to Thailand, the Republic of Korea and Indonesia. For Thailand, the ADB had approved a US$500 million loan to mitigate the social impact of the crisis. This was the largest social sector programme loan that the ADB had ever provided. Three technical assistance grants totalling US$2.1 million were part of it. The technical assistance would help the Government to monitor and evaluate the social impact of the crisis, including the welfare of women, ethnic minorities and the poor. A similar social response package for Indonesia was almost ready. To supplement the investment packages to Thailand and Indonesia, the ADB had also approved several regional technical assistance projects that would help to make a regional assessment of impact, and to exchange experience and develop successful modalities and partnerships. The ADB had recently revised several policies and strategies to address social and environmental concerns in the development process and had set medium-term targets for social and environmental lending. The previous week, the ADB's Board of Directors had approved a new policy of cooperation with non-governmental organizations and a new policy in relation to indigenous peoples. The speaker then drew attention to two challenges that needed to be discussed during the Meeting. First, good information on affected persons was difficult to find, yet such information was essential to understanding where the impact was hardest and to directing resources so as to mitigate the impact where it was needed most and to assess the results. Second, in the discussion of labour issues that were reflected in the programme loan to Thailand, the ADB had realized that it was necessary to consult effectively with groups representing workers hit by the crisis. However, the majority of workers were not represented by any organization. The programme loan to Thailand called for improved tripartite consultations on labour policy. The ADB was committed to these improvements, to be implemented by the Government with ILO assistance. Stronger partnerships between stakeholder groups were necessary to address these challenges. Where workers' representation in formal associations was low, public information and debate were needed to increase awareness of the critical issues, of the government policies to address them, and of the roles and responsibilities of civil society groups to effective partnerships. Finally, the speaker emphasized the importance of ensuring optimal implementation of the financial packages offered by the ADB and others by involving all the stakeholder groups in each country, including public, private, NGO and community sectors. Social response initiatives also required monitoring at the grass roots; public information and debate were needed to build awareness and improve governance, and environmental protection should not be neglected.
7. The representative of the World Bank (Ms. K. Marshall) praised the Meeting's focus on the vital human dimensions of the crisis in East Asia and urged it to define effective actions to help Asia return to the path of social and economic development. The strides made in reducing poverty in Asia and building human assets, notably in education and health, were the real "Asian miracle" and no one could afford to see it falter. This Meeting could make a difference in important ways. First, it could advance the joint search for solid understanding of crucial issues and solutions to the most urgent problems. Most notable was the rising challenge of unemployment. In light of the large scale of the problem and likely increases in the immediate future, targeting assistance to those who needed it most took on special importance. The World Bank also saw an urgent need to maintain the access to and quality of critical social services, especially education and health, and to protect budgets and solve immediate problems such as the rising prices for essential medicaments and the flagging enrolment in schools. It also recognized the need to address issues of basic welfare, notably food availability and basic services. Secondly, and equally important, the Meeting could help in forging stronger partnerships among the various actors, allowing them to explore complementary roles and to highlight areas for cooperation. The crisis facing Asia called for urgent and immediate action. The World Bank had mobilized extraordinary resources in response. But it also called for fresh ideas and fresh actions on the full medium- and long-term social agenda. A renewed impetus was required in dealing with issues of social protection and social development. The World Bank looked forward to working with the ILO and other partners on these issues.
8. The representative of the IMF (Mr. K. Saito) recalled how well Asian countries had performed economically until the middle of last year and how much they had been affected by the financial crisis ever since. While the IMF's support had led to progress, especially in the Republic of Korea and Thailand, problems were still affecting these countries, as well as others, and people continued to suffer from the effects of the crisis. There was an evident need for dialogues of various kinds at both national and international levels. The IMF was looking forward to a continued exchange of views with the ILO and other labour organizations in respect of social responses to the financial crisis, as well as the measures needed to address them.
General presentations
9. The spokesperson of the Workers' group (Mr. Zainal Rampak) in his opening remarks stated that Asia was at a watershed. In one direction he saw a grave danger of social chaos and a further downward economic spiral; in the other direction, a difficult new path that blended social stability with the rigours of the global market. The imperfections of the international financial system were only part of the problem. The depth and extent of the financial crisis was also a crisis of confidence in the institutions and regulations that governed markets in the region. Employment and social statistics did not accurately portray the impact of the crisis. The ILO's Technical Report had managed to put together available information in a disturbing picture of sharply rising poverty and unemployment. Millions of men and women who thought they were on the first rung of a ladder of prosperity had lost their footing and had no safety net to prevent them falling back into poverty. The plight of migrant workers was perhaps the most inflammable part of an explosive social time bomb. The problems of women workers were the most difficult to track statistically but likely to be severe, because they were in more unstable jobs, less well organized, employers regarded them as "secondary" earners and dismissed them first, their wages and benefits were lower, and they had lower skill levels and often faced difficulty in finding training places. The over 6.7 million foreign workers in the seven most affected economies of the region were a highly vulnerable group. There was a likelihood of rising tensions, especially in Thailand, Malaysia and Singapore, as a result of the large numbers of illegal and unemployed migrant workers already there, and still arriving, who were unwilling to return voluntarily to their country of origin. As regards issues of social protection in the countries heavily affected by the financial crisis, the Republic of Korea was the only country with an unemployment benefit scheme. Others had provident fund schemes but the yields were poor and the coverage sparse. Health insurance coverage was very limited and usually stopped with the termination of employment. While it was tempting to enter into a debate about the causes of the financial crisis and the need for a new architecture for the international financial system, the Workers' group would limit its proposals to: (i) an international commission to investigate the causes of the crisis and make recommendations for reform to limit the dangers of large-scale speculation and place tighter disciplines on financial markets; (ii) an early and large cut in interest rates throughout the region and the boosting of social budgets; and (iii) coordinated action by the main economic powers of the Group of Seven to boost growth, especially in Japan. The Workers' group's main goal at the Meeting was to try to reach agreement on how to develop and enlarge the limited responses to the crisis. The ILO's Technical Report stressed the value of high-level tripartite agreements in establishing a framework for continuing dialogue and an agenda of priorities for action; the importance of developing company-level discussions, and the disclosure of information, on how to improve job security through increased productivity; the need to boost social budgets to provide incomes for the unemployed either through social insurance or assistance schemes or through various forms of labour intensive public works; the guarantee of minimum severance pay rights; protection of the rights of migrant workers; and legislation to ensure respect for freedom of association. The Workers' group particularly welcomed the strong statements on the need for governments to act on the recommendations of the Committee on Freedom of Association regarding a number of long-standing and grave abuses of workers' rights in this region. The key points in the Technical Report which the Workers' group believed could form the basis for agreed conclusions for this meeting included: (a) a strong appeal on governments and the international financial institutions to reinforce the recovery elements of the current stabilization and reform programmes with a view to an early reduction of interest rates, the easing of restrictive budgetary policies and the rapid introduction of essential financial reforms based on the principles of transparency, accountability and participation, at both national and international levels; (b) a region-wide drive on core labour standards, especially the strengthening of union rights and the institutions of tripartism; (c) union involvement in company restructuring plans with the aim of improving job security, compensation for those laid off, and improved cooperation on measures to increase productivity; (d) an expansion of training for the unemployed; (e) the development of social security systems with special focus on extending the coverage of unemployment benefit; and (f) job creation programmes, and other forms of social protection for the unemployed with special emphasis on the most vulnerable such as migrant workers, women and the young. It would be unthinkable for a high-level tripartite meeting to finish without a strong call for international support for social dialogue to build consensus on a comprehensive social programme of institutional reform and development to match that under way in the finance sector. A worsening of the social crisis would inevitably undermine the sustainability of the still fragile programmes governments have agreed with the IMF.
10. The spokesperson of the Employers' group (Mr. A.W. Tabani) emphasized that equal importance had to be given to economic and social development. Jobs, incomes, comprehensive social security regimes and social safety nets depended on successful, competitive enterprises. The Employers' group hoped that governments recognized this reality and acted on it, because the policies they had chosen must be centred around conditions for enterprise success in an open, competitive, market-oriented economy. The Organization needed to develop a way to respond quickly when member States faced situations such as in East and South-East Asia today. The ILO needed to be present and supportive to its Members when they went through painful adjustments, and provide the assistance needed to ease the social aspects of such adjustment. To play this role, the ILO had to work closely with all other multilateral agencies, especially the financial institutions, that tried to help the countries concerned, and make full use of its tripartite constituency in doing so. The ILO's Technical Report which he described as an excellent, well-authored document discussed all the affected countries in general terms, but focused in detail only on the situation in three countries -- Indonesia, the Republic of Korea and Thailand. The adverse effects of the crisis on small and medium enterprises, and enterprises in general, did not figure in the Technical Report nor did some of the recommendations made by the Asian Regional Meeting with regard to enterprises and active labour market policy. The Employers' group found an inordinate emphasis on public works programmes in the Technical Report. Such programmes could be useful to the extent that they resulted in a better infrastructure which promoted enterprise activity, but for employment as such they constituted only temporary relief. The more long-term, strategic measures for sustainable employment creation and national development must aim at the creation of an environment that promoted competitiveness and investment in private-sector economic activities. He agreed with the report that transparency in government and in financial markets, democracy and respect for human rights were necessary in an environment to promote enterprise growth, but removal of excessive regulation, flexible labour market conditions, policies to facilitate enterprise restructuring and good labour-management were also essential. While the Director-General of the ILO had reminded the Meeting in his address of how closely the ILO had been working with other multilateral institutions that were trying to help the countries affected, the ILO must maintain a closer dialogue with them and provide assistance to countries to complement the overall social responses to the crisis. It would facilitate the implementation of reforms if the various financial institutions concerned would make it part of their policy and practice to consult the social partners at the national level when negotiating the conditions for their financial assistance. In fact social consensus on the direction of development was important for the sustainability of the measures taken, and such consultation should take place in the other countries of Asia as well. It was up to the Meeting to seize the opportunity to identify how the ILO could be useful in the context of today's crisis. Attention should be focused on: (a) support to policy initiatives for development of enterprises; (b) effective and meaningful tripartite consultation, particularly at the national level; (c) strengthening of the social partners and bipartite dialogue; (d) industrial relations, especially at the level of the workplace; (e) productivity improvement, which was the sine qua non for competing in international trade; (f) training and human resource development; (g) active labour market policies to facilitate enterprise restructuring; and (h) social security and social safety nets.
Presentations by Government representatives
11. The Asian financial crisis, as the speakers made clear, had affected all invited countries or areas, albeit to different degrees. Indonesia, the Republic of Korea and Thailand were afflicted most, China, the Philippines, Singapore, Viet Nam and Hong Kong, China, to a lesser extent. The representative of the Government of Viet Nam regretted a decline in foreign direct investment and in exports. The representative of the Government of China also anticipated a sharp decline in exports and lower growth in 1998. The representative of Hong Kong, China, noted that growth and employment trends had worsened. Throughout the region, the most visible manifestations of the social impact were job losses, retrenchments and increased poverty. A representative of the Government of the Republic of Korea noted the sharp rise in unemployment which would continue to hover around 5 per cent for the next few years. The Government of Thailand expected unemployment to reach the level of 2 million in 1998. The Government representative of the Philippines mentioned that there were both winners and losers in the labour market depending on the fortunes of particular economic sectors. The representative of the Government of Indonesia highlighted the sharp rise in poverty and inequality in the country as indicated in the ILO's Technical Report.
12. Governments explained the measures they had taken to deal with the crisis. Economic reform and adjustment programmes involving IMF assistance, business support and promotion measures, direct assistance to displaced workers, extension of safety nets, social protection and promotion of tripartite consultation were among the most widely used measures. The representative of the Government of Indonesia mentioned that his Government was following the macro policy programme recommended by the IMF. In the Philippines, the Government had instituted strict fiscal and monetary discipline. To tackle sharply rising unemployment, the Government of the Republic of Korea was providing unemployment benefits and pursuing active labour market measures under its Employment Insurance Scheme. Conscious of the risks that active employment promotion programmes might delay structural adjustment, the Government was trying to strike a balance between minimizing unemployment and expediting structural reform. The Government of Thailand had adopted an action plan with a view to creating 1 million jobs in the course of 1998. The Viet Nam Government's response to the slowing down of the economy had been to create more favourable conditions for foreign investors and to develop a series of national programmes covering poverty alleviation, job creation, restructuring of state-owned enterprises, vocational training and social protection. Support to enterprises and businesses, especially small and medium enterprises, was a commonly adopted strategy. The representative of Hong Kong, China, outlined numerous proactive measures adopted by the Government to promote a business-friendly investment climate in the form of tax concessions, credit guarantee schemes, business training, etc. Several governments mentioned direct assistance programmes to help displaced workers. In the case of the Philippines, the Department of Labour and Employment had very recently introduced a package comprising monitoring, linking and job loss prevention. The representative of the Government of Malaysia mentioned measures in regard to retrenched workers: registration and monitoring systems, establishment of a tripartite committee, ensuring severance payment claims, exploring alternatives to retrenchment, advisory services and increased funds for retraining. The Government of Singapore had set up a Tripartite Panel to examine ways of assisting retrenched workers to find alternative employment in high-growth industries through retraining and better coordination of job vacancies. In particular, government funding had been provided for a skill redevelopment programme proposed by the trade unions.
13. The subject of foreign migrant workers also received attention. The representative of the Government of Malaysia reported that the Government had adopted several measures in view of the economic slowdown: repatriation of undocumented workers; and redeployment of foreign workers who have completed their contracts and still possess valid work permits, to other sectors of the economy.
14. A number of governments pointed out that many businesses had to undertake restructuring and adjustment programmes with implications for industrial relations. The Government representative of the Philippines reported that industrial disputes since the middle of 1997 were related to company closures, temporary shutdowns, retrenchments and subcontracting of work. Companies had usually undertaken cost-cutting measures before actual retrenchments. Several governments mentioned the need for both a bipartite approach at the company level and a tripartite approach in solving problems associated with the current crisis. The Government representative of Indonesia stressed the importance of maintaining stable industrial relations.
15. Governments drew attention to the various social protection mechanisms put in place to assist persons seriously affected by the crisis. This was considered important in view of the lack of unemployment insurance in many countries. The Government representative of Hong Kong, China, referred to the Protection of Wages on Insolvency Fund which provided financial relief for workers in cases of bankruptcy, and the Comprehensive Social Security Assistance Scheme which helped those unemployed in financial difficulties. Reference was made frequently to the role of safety nets. Another measure had been the introduction or intensification of public works schemes. The representative of the Government of Hong Kong, China, mentioned the heavy investment made in public housing and infrastructural projects to stimulate employment. The Government representative of Indonesia highlighted the role of labour-intensive projects in guaranteeing workers employment and income in both infrastructure and income-generating self-employment projects. The representative of the Government of Malaysia mentioned a number of measures taken to soften the negative impact on lower-income and vulnerable groups. Greater budget allocations had been made to micro credit programmes, health facilities, rural infrastructure and skill improvement programmes. The Government of Thailand had taken measures to increase the maximum level of severance pay to extend the period of continued health insurance coverage for retrenched workers. Increased educational assistance was being provided to enable poor students to complete their studies.
16. The crisis underscored the need for tripartite approaches to solving employment and labour issues. The observer of the Government of Japan stressed that tripartism offered the best means of defining priorities in programmes to deal with the crisis. The Government representative of the Philippines referred to the elaboration of a Social Accord for Industrial Harmony and Stability. The Accord urged both labour and management to exercise utmost restraint in resorting to lay-offs or strikes. The Department of Labour and Employment had also organized Regional Social Accords. The representative of the Government of Singapore emphasized the importance which his country accorded to tripartite involvement and participation. In the Republic of Korea, a tripartite accord had paved the way for overcoming the crisis and for sharing the burden fairly among the social partners. The Government intended to maintain and strengthen the Tripartite Commission which played an important role in policy making.
Presentations by Workers' representatives
17. While the causes of the financial crisis were still the subject of debate, it was stressed by many Workers' representatives that the people most affected by the crisis were from socially disadvantaged groups. The Workers' representative of Japan said that ordinary workers, women and migrant workers were suffering intensely from the effects of the crisis. The observer from ICFTU-APRO suggested that the present economic crisis, resulting from the financial crisis, was the worst calamity to hit East and South-East Asia since the Second World War. He went on to say that, with the exception of Japan and China, there were more than 20 million unemployed workers in East and South-East Asia. The Hong Kong, China Workers' representative said that while Hong Kong was not affected as badly as other parts of Asia, the unemployment rate masked the real unemployment figures as many jobseekers, mostly women workers, had given up looking for a job. He stressed that the pain of unemployment was acute in Hong Kong, China. The Workers' representative of Indonesia highlighted his country's plight when he stated that in 1997 some 7 million people were unemployed. He went on to say that in 1998 it was expected that approximately 13.5 million people would be unemployed due to retrenchments, company rationalizations, bank mergers, and because new jobseekers entered the labour market. A Workers' representative of the Republic of Korea (FKTU) spoke about the greater job insecurity which had resulted from the economic crisis in his country especially for women workers, workers in small industries and less skilled blue-collar workers.
18. Many Workers' representatives implored their governments to take urgent measures to deal with the impact of the financial crisis. The Workers' representative of Japan urged his country's Government to provide financial and humanitarian assistance to the affected countries, while at the same time promoting an active growth policy to assist the Japanese economy to recover. A Workers' representative of the Republic of Korea (FKTU) called for Government action to accelerate industrial restructuring made necessary by the economic crisis, and for involvement of the trade unions in the restructuring process. He suggested that long-term stability and social justice would depend on guaranteeing internationally recognized workers' and trade union rights, in particular freedom of association. He also stressed that retraining programmes should be introduced for retrenched workers.
19. The need for countries to develop effective systems of social dialogue was a constant theme in the interventions of the Workers' representatives. The Workers' representative of Japan said that the financial crisis had highlighted the lack of social protection in many countries. He went on to say that social protection could best be achieved through an effective social dialogue established on the basis of full respect of human and trade union rights. The Hong Kong, China, Workers' representative said that there was very little social dialogue between the workers and employers prior to workers being retrenched.
20. The lack of social protection in the countries most affected by the crisis was seen by many Workers' representatives as threatening the living conditions of the most vulnerable groups. The observer from ICFTU-APRO suggested that unemployment benefit schemes should be introduced immediately to cushion some of the adverse effects of unemployment. The Hong Kong, China Workers' representative also stressed the need for social protection measures including unemployment insurance and a pension scheme. The Workers' representative of the Philippines felt that women workers were one of the groups most affected by impact of the financial crisis. She mentioned that women workers were in the most precarious and lowly paid jobs, and that these forms of work were often outside the protection of the law, collective bargaining and social security. The Workers' representative of Japan saw the weaknesses in social dialogue as a major factor contributing to this problem.
21. Several Workers' representatives stressed the linkage between effective social dialogue and fundamental labour standards. In addition, the Workers' representative of Thailand spelt out the importance of tripartism in addressing social problems in his country and proposed a number of measures to promote this. He called on the Government to adopt a policy on social partnership and participation; to set up a legal framework to underpin social participation, partnership and ensure freedom of association for workers; and to set up a mechanism to promote tripartism. He urged the Government to ratify the Freedom of Association and Protection of the Right to Organise Convention (No. 87) and the Right to Organise and Collective Bargaining Convention (No. 98). He called on international financial institutions to consider these proposals in approving financial packages for Thailand.
Presentations by Employers' representatives
22. Several Employers' representatives noted that enterprises had to find ways to survive the financial crisis through their own means. The Employers' representative from the Republic of Korea stated that employers in his country were assisting the Government in minimizing the social consequences of the increasing unemployment, and had agreed to pay higher contributions for unemployment insurance. Korean enterprises would help displaced workers become re-employed as soon as possible through the provision of retraining, job information and financial assistance. In a similar manner, the Employers' representative of Indonesia stated that the country's main concern was the sustainability of businesses and that their aim was to avoid or limit the number of retrenchments. The Employers' representative of Australia called for measures to minimize the duration of unemployment and to promote the re-employment of retrenched workers. Pointing out that employment creation would depend mainly on the private sector, he urged caution in regard to measures to create employment through labour-intensive public works programmes, which did not provide a lasting solution, sometimes costing more than they contributed. He called for greater involvement of employers' organizations in economic policy development, directed towards ensuring enterprise viability and economic development with maximum capacity for employment. The Employers' observer of Bangladesh called for the involvement of NGOs in the execution of programmes to assist the reintegration of migrant workers in their countries of origin and the establishment of tripartite mechanisms to monitor these programmes.
23. Many Employers' representatives stressed the need for a greater social dialogue between the social partners. The Employers' representative of Japan said that this would enable them to work together to restore the international competitiveness of Asian countries, while at the same time maintaining social stability. He called on the ILO to place greater emphasis on strengthening employers' organizations as a prerequisite to promoting stronger industrial relations. The Employers' representative from the Republic of Korea highlighted the outcomes of a National Tripartite Commission which agreed on a Social Accord in March 1998. The Accord aimed at labour market flexibility and the promotion of workers' rights. Similarly, the Employers' representative of the Philippines said that the forging of a social accord between the employers' organization and the major labour federations had eased the tension between workers and employers and minimized the number of retrenchments. The Hong Kong, China, Employers' representative, in response to the intervention of the Workers' representative, stressed his strong disagreement with many of the points raised. In particular, he pointed out that the Hong Kong Special Administrative Region (HKSAR) had adopted the ILO standard in defining unemployment. It had also put in place a strong safety net, including the Comprehensive Social Security Assistance Scheme. Social dialogue was always present, as reflected in the active role played by the tripartite Labour Advisory Board. The HKSAR, which had recently introduced separate pieces of legislation, was very firm in eliminating discrimination in employment, particularly that relating to sex and disability.
24. The Employers' representative of Australia welcomed the ILO's Technical Report but pointed out that some of the concepts put forward did not make practical sense -- such as "socially sensitive" restructuring or privatization by consensus. He called for greater emphasis on employment promotion through sound enterprise development strategies, investment in human resources and measures to promote a business environment conducive to sustained enterprise competitiveness in a rapidly changing global economy, as well as new employment opportunities and greater labour market flexibility. He also emphasized the need for the improvement of social protection; many countries in the region had a long way to go in this regard, but a start had to be made. He noted the role of income protection in maintaining effective demand and thereby preventing economies from sinking as far as they might otherwise. The Employers' observer of Bangladesh called on wide support for the ILO draft Recommendation on Employment Creation at the June Conference.
Calls for ILO action
25. Several Government representatives emphasized the need for the ILO to play a greater role in assisting the countries in coping with the crisis. The observer from the Ministry of Labour, Japan, pointed out that the proposals contained in the ILO's Technical Report were very broad and priorities had to be assigned through tripartite consultation at country level. He suggested that the ILO's MDT structure provided a sound framework for deeper country-specific analysis and identification of priorities for action programmes. The Government representative of Indonesia anticipated ILO assistance in four areas: employment-generation policies; promotion of entrepreneurship in self-employment and small-scale enterprises; poverty eradication strategies; maintenance of sound industrial relations. Governments also appreciated the role of the ILO in promoting the exchange of ideas and experiences through regional meetings such as the present one. The urgency for greater collaboration with other international financial institutions in carrying out its mandate was equally emphasized.
26. A number of Employers' representatives requested assistance from the ILO, to offset the negative social effects of the financial crisis. The Employers' representative of Indonesia called for ILO assistance in the promotion of employment, human resources development, industrial relations, and problems related to women workers and child labour. The Employers' representative of Australia called on the ILO to assist employers' organizations to develop in an appropriate way, to play a role in ensuring the development of economic policy which promoted enterprise viability and economic development with maximum employment capacity. The Employers' observer of Bangladesh urged the ILO and international financial institutions to develop regional programmes to assist migrant workers, through the promotion of employment generating activities in their countries of origin.
27. The ILO was called upon by many Workers' representatives to increase its technical assistance to member States in reforming their labour laws and practices. The Hong Kong, China, Workers' representative requested the ILO to assist in developing a framework for collective bargaining and provide advice on unemployment insurance. He also requested assistance in formulating job creation schemes. The Workers' representative of Indonesia requested ILO's assistance in developing social safety nets and active labour market policies, together with advice on strengthening the industrial relations system.
Dialogue between international and regional
financial institutions and the ILO constituents
28. The ILO's Assistant Director-General responsible for Technical Programmes opened this session by briefly recalling recent progress in relations between the ILO and the financial institutions. These were now constructive and getting closer even where differences remained due to specific mandates.
Presentations by financial institutions
29. Representatives of the ADB started by setting out the changes the ADB had been undergoing for several years, from an institution financing mostly infrastructure projects to one concerned with wider development issues, and from addressing technical questions to those of policy and capacity building. At the same time, the focus had broadened from economic growth to, inter alia, improvement in the status of women, poverty reduction, progress in human resources and the promotion of a sound environment. In 1997, the share of social and environmental projects had climbed to 56 per cent if one disregarded the large Financial Sector Programme for the Republic of Korea. Since the inception of the crisis, the ADB had shown considerable flexibility in its responses by contributing to emergency assistance packages, including the two social sector programme loans in Thailand and Indonesia aimed at the poor, the unemployed and other vulnerable groups. These loans were supported by various technical assistance activities such as the one on reducing child labour, currently being prepared in Indonesia. The ADB had noted the need for better information and deeper understanding of impacts, much of which could be facilitated if affected or vulnerable groups were involved in assessments and in monitoring impacts. In line with this, the ADB would carry out a regional technical assistance project to collect information on social impacts of the social financial crisis through participatory processes. It would coordinate this activity with the analytical work undertaken by other agencies, particular the World Bank and the United Nations system, including the ILO.
30. A representative of the IMF made clear that the IMF had not created the Asian financial crisis and that IMF "medicines" had beneficial effects if properly applied and given time. IMF programmes did not envisage that interest rates would remain high any longer than needed to stabilize currency markets. The programmes actually provided for considerable fiscal flexibility to permit governments to respond to the social consequences of the crisis. The IMF was highly sensitive to social and labour concerns but relied on the World Bank and the ADB to provide the necessary expertise and funds. The Fund was open to different views and ready to work together with the ILO and other representative organizations of labour at the international and national levels. As regards the financial crisis itself, research on earlier crises had demonstrated the significant contractions in output which they entailed but also that they could be redressed in the space of one to two years, provided the financial sector's fragility was adequately addressed and quickly resolved. The Asian crisis's global impact was modest, but oil-exporting countries would feel the pinch quite strongly.
31. The representative of the World Bank identified restoration of economic growth as the key priority. Macroeconomic reform programmes including efforts to ensure sound and strong financial systems, were thus indispensable to the key objective of poverty alleviation and social progress. Social issues had to be taken into account as part of these reforms and this had been the case in the World Bank's lending in the context of the Asian financial crisis. The success of general as well as of social policy reforms and lending operations required a broad understanding throughout a country and strong commitment by its Government. The World Bank wished to facilitate national-level consultations. In responding to the immediate social consequences of the crisis, the World Bank had focused on issues for employment, maintenance of social services and essential commodities, notably food. As regards public spending, there was not only a question of the level of budgets but also of the pattern of spending and the efficiency of delivery, particularly in the field of social services. These immediate and urgent responses to the crisis needed to be seen in tandem with ongoing action in the full range of social development programmes. Specifically, the current crisis provided an opportunity to rethink social protection policies and insurance schemes, including pensions.
Discussion by Government representatives
32. A participant of the Government of Indonesia drew attention to the increasing importance of mutual funds in global financial markets and to the low level of commitment they displayed to the countries and companies in which they invested. He asked what action the IMF might take to deal with this problem. Referring to the use of labour-intensive projects, he wondered whether these might be promoted in export-oriented sectors of the economy.
33. The need for better information on the effects of the crisis was stressed by a participant of the Government of the Philippines. However, research surveys came low in governments' expenditure priorities, so there was a great need for assistance from international organizations in this area. As various agencies were involved, good coordination was necessary. Greater efforts were also needed among international organizations to coordinate lending activities. She noted the shift that had taken place in the pattern of lending by the World Bank, from project loans to programme and structural adjustment loans, which are subject to painful policy conditionalities. Her own country was reluctant to take World Bank loans for social projects, given the cost of such loans and the low financial returns from projects of this type. More concessional lending should, she suggested, be considered for such projects. Within the IMF there had been a greater concern in recent years about poverty issues: rather than simply focusing on existing government anti-poverty programmes, a more proactive approach was needed, linking this question with decisions on fiscal sector reforms.
34. A representative of the Government of Indonesia stressed the need for concrete measures to tackle unemployment in the short term, since the workers affected by the crisis could not wait until an overall solution was found to the problems confronting the country's economy. His Government had organized a large programme of labour-intensive employment programmes, using its own budgetary resources. He described the main characteristics of these programmes, which had been established in urban areas, rural areas and in many of the country's forest zones. While their main aim was to create productive and sustainable employment, these programmes were also designed to support community empowerment.
35. A participant of the Government of the Republic of Korea echoed the growing concern in his country about the current steep rise in unemployment, a development which had not been adequately foreseen when the IMF programme was decided upon. The prescription of tight monetary and fiscal policy was essentially the same as that which had been applied by the IMF in Latin America and in Central and Eastern Europe. East Asia was not the same, having low inflation, sound government budgets and a very different kind of labour market. There was a need for a serious professional debate on whether the IMF prescription was the right one. The risk of chronic unemployment and low economic growth called for a new approach in tackling the region's problems. A participant of the Government of Thailand queried both the validity and origin of the IMF's requirement for a budget surplus, noting the cuts which this had entailed and the Fund's eventual decision to permit a deficit of 1 to 1.5 per cent of GDP.
Discussion by Employers' representatives
36. The Employers' spokesperson complimented the international financial institutions on their prompt response to the crisis which enabled it to be contained in some countries and to be reversed in others. The depth of the crisis had caused the institutions to consider social concerns and consult to some extent with employers' organizations. He called for greater future involvement of the social partners in the development of policies, which could be facilitated if the financial institutions involved the ILO in this process. Employers' organizations in particular should be consulted on matters of social concern, since economic growth based on restored enterprise profitability was required to provide a lasting solution to the crisis.
Discussion by Workers' representatives
37. Several Workers' representatives urged the international financial institutions to consult with workers' organizations in the development of solutions to the crisis, given the marked social impact of the austerity measures which they recommended. The Workers' spokesperson stressed that effective tripartism was the best available mechanism for elaborating constructive solutions to the problems arising from the crisis, including changes in the pattern of employment, and for ensuring that the pressures for job and income security were balanced against the requirement of flexibility to meet new market conditions. He called on the ILO and the financial institutions to play a more active role in promoting tripartism, which he saw as essential to successful long-term adjustment. The Workers' representative of Thailand suggested that the financial institutions could prescribe the format of social partnership to be reflected in each social programme and asked whether they could require the inclusion of social targets -- such as the reduction in the inequality in income distribution -- in projects which they funded.
38. A Workers' representative of the Republic of Korea (KCTU), referring to the recently concluded tripartite accord which had been rejected by the majority of KCTU members, highlighted the need to build trust between the social partners. The Workers' observer of the United Kingdom asked whether the assistance from international financial institutions could be partially used in conjunction with the ILO to strengthen tripartism and strengthen social partners, since these were both essential prerequisites of any solution to the crisis problems. Sound industrial relations were also required if the required adjustments are to be made in the long term.
39. Workers' representatives expressed concern about the social impact of the programmes and packages introduced on the recommendation of the financial institutions. For instance, the Workers' representative of the Philippines asked about their views on the social clause, on fundamental labour standards and on the proposed Tobin tax and the Chilean system of restrictions on short-term foreign capital. A Workers' observer asked whether the financial institutions had mentioned labour standards in their negotiations on governments in the region. The Workers' spokesperson asked whether the international financial institutions were ready to support the efforts of workers' organizations to bring about an improvement in social protection. The Workers' representative of Thailand asked whether the measures recommended by the IMF, such as the privatization of state enterprises, would actually lead to improvement in their operation. The Workers' representative of Indonesia, commenting that the IMF package for his country was complicated and implemented too slowly, called for speedy action to deal with the huge job losses and the need for retraining of workers. The Workers' representative of the Phillippines commented on the lack of adequate regulatory frameworks for international financial flows.
Responses by financial institutions
40. In response to various points made, representatives of the IMF expressed support for taking into account fundamental labour standards, which had been done successfully in the tripartite accord of January 1998 in the Republic of Korea. The IMF had considerable sympathy with the principles embodied in these standards; but it did not have a specific mandate in this field; and there was a clear division of responsibilities among international agencies. The IMF was particularly concerned with fiscal policy and measures where one had to avoid measures benefiting the well-off rather than the poor. As regards the "Asian model", it had strengths -- such as an ability to look beyond short-run maximization of profits and a capacity to mobilize investment funds -- as well as weaknesses -- such as nepotism and accounting and management practices that were not on a par with international standards, and indeed were not evolving in line with contemporary market requirements.
41. The World Bank representative underscored the need for thinking ahead on future labour market developments. Education and training ought to be linked more closely than in the past. There was, indeed, a problem of obtaining information while avoiding overlap. One needed to exploit non-traditional sources of information, where the World Bank had made some progress in the Philippines and Thailand. One also had to convince governments to take fuller account of the returns to investments in fields such as education, health and capacity building -- areas in which pertinent information was scarce. Yet at the same time there was room for improvement in coordination among the various international organizations engaged in the collection of information. As regards the ILO's fundamental labour standards, the World Bank recognized and supported their moral value and human rights character. It did not condone practices that harmed children, women or the poor through discrimination or coercion. The World Bank held that the implementation and enforcement of standards was an ILO domain in which the Bank should not interfere. As to other international labour standards, these were judged within the context of a country's economic, social and legal environment. The World Bank always sought ways to implement policies that favoured the poor. While the World Bank's charter referred to the raising of labour standards, it did so in terms of results deriving from the achievement of objectives, not as an objective in itself. In specific cases, the World Bank might seek specific agreements regarding standards, but only with the support of the government and only to the extent that lack of compliance with such standards undermined the execution or the development objectives of its projects or programmes.
42. The ADB responded to the discussion by acknowledging the need for increased contacts with NGOs, including trade unions, on which progress had been made recently in Thailand. The ADB, having a broad mandate on various development areas, needed to collaborate with a variety of NGOs. This should not mean marginalizing contacts with the trade unions on employment issues. The principle of social partnerships with the NGOs had been established by the ADB through its recently revised policy on cooperation between the ADB and NGOs, encompassing policy development, programming, project design, and evaluation. More exact forms of collaboration were established through consultations, on a project-by-project basis. In spite of progress made, the ADB had noted gaps and weaknesses in the "Asian model", which had led to growing inequalities in some countries leaving behind many vulnerable groups including women and indigenous people. It had also led to environmental degradation in megacities. As regards core labour standards, a preparatory study had been recently completed to suggest areas where the ADB could become active in the future, while acknowledging that labour standards fell within the ILO domain.
Technical debate
Employment policy
43. There was general agreement among representatives of governments, employers' and workers' organizations on the need to strengthen employment policies to deal with the impact of the crisis. However, different views were expressed on the actual measures to be adopted. Employers' representatives maintained that employment policy should be viewed in a long-term perspective. Jobs were essentially created by private sector enterprises and sustained employment could be attained in the long run only through sustained enterprise development. Employers mentioned that a package of measures was necessary for job creation in the current crisis. The Employers' representative of the Republic of Korea argued that both supply side and demand side measures were important in this regard. Labour market policies, human resource development targeted to the needs of industry and effective employment services were important on the supply side. On the demand side, an environment conducive to enterprise creation was essential. Favourable macroeconomic policies, flexible labour markets and good governance were important. The Employers' representative of Bangladesh highlighted the need for government support services and incentives, tripartite cooperation and deregulated and flexible labour markets in the context of enterprise restructuring and enhancement of competitiveness during the crisis.
44. The Workers' representative of Malaysia felt that the measures highlighted in the ILO's Technical Report constituted a sound basis for employment policies: strong training and retraining programmes; effective employment services; safety nets and special programmes for disadvantaged groups and regions; and human resource development. A more active employment policy and the development of an institutional framework for the labour market were urgent priorities in equipping workers with skills required to adapt to the needs of changing market conditions in a globalizing world. There was concern among Workers' representatives about the quality of employment. The Workers' representative of the Philippines described the unsatisfactory working conditions of workers, in export processing and special economic zones in the Philippines, the majority of whom were women. The social and gender dimensions of employment in the informal sector and home-based work, and the special vulnerability of these workers, had yet to be taken into account by policy planners. The vulnerable situation of migrant workers was also a fact. The Workers' representative of Malaysia welcomed the ILO's proposals on good governance of migrant labour and the need for a framework for a more humane management of migrant labour flows. The observer from the ICFTU-APRO pointed out the need for exploring innovative methods of job creation and preservation. He referred to the potential of employment subsidies to enterprises that found it difficult to retain workers. Arrangements for shorter working hours would release resources for employment of more workers.
45. The relationship between general development strategy and employment policies was also discussed. The representative of the Government of the Philippines pointed out the need to recognize the potential of the agricultural and rural sectors for job creation. International financial institutions should be more flexible in lending to social services and sectors which were productivity-enhancing in the long run. He also cautioned that the East Asian model of labour-intensive export-oriented development continues to be relevant. The representative of the National Economic and Social Development Board, Thailand, mentioned the lack of adequate labour market information and the shortage of trained manpower as serious constraints in employment planning.
46. All participants recognized the role of the ILO in assisting countries in the region in regard to employment policies. The Employers' representative of the Republic of Korea suggested that the ILO should allocate more resources to enterprise development programmes in its programme of work. He also called upon the Regional Office for Asia and the Pacific to collect and disseminate information on best practices and lessons learnt in enterprise development. The Workers' representative of Malaysia pointed out that much could be achieved through the various ILO advisory services mentioned in Meeting Room Paper 1, which could be linked to employment adjustment support packages provided to countries by international financial institutions. The representative of the NESDB, Thailand, requested the ILO to provide assistance in training of employment planners and improving labour market information.
Enterprises and job creation
47. The need for enterprise development and job creation was seen by both the social partners and the governments as being essential for economic growth and as a means of assisting recovery from the financial crisis. While Workers' representatives agreed with the need for labour laws to be reformed, to make them simple and easy to implement, they stressed that they did not see a favourable business climate as meaning the total deregulation of the labour market. The Workers' representative of Malaysia emphasized the essential relationship between workers and employers and stressed that the overall business climate, including labour laws, was a key element in creating and sustaining jobs. He also emphasized that collective bargaining was a flexible and less costly means of regulating employment relations. He further argued that workers who were not covered by collective bargaining agreements needed the protection of labour laws. He went on to say that countries could not simply get rid of laws on job security without ensuring that workers were protected from arbitrary dismissal during times of recession. The Malaysian Workers' representative also said that workers supported the ILO approach on labour-intensive public works infrastructure programmes, but that issue of wages and social assistance benefits needed to be examined carefully and discussed with the trade union movement.
48. The Workers' observer from ICFTU-APRO raised the issue of the role of multinational corporations (MNCs) in job creation. She mentioned that workers had both good and bad experiences with MNCs. MNCs were so powerful that they could influence governments by threatening to move their operations offshore if the appropriate incentives were not provided. She went on to emphasize the need for social safety nets for workers in many Asian countries. She also mentioned that the expectation for families to provide the safety nets is no longer realistic. The growing casualization of employment, as revealed by the increasing numbers of homeworkers and child labour, was also described. It was emphasized that these groups were outside the coverage and protection of existing labour laws. The Workers' observer from ICFTU-APRO stressed that job creation programmes must consider the quality of the job created as well as the quantity.
49. The Employers' representatives stressed the need for flexible labour markets and labour laws as an essential ingredient in job creation schemes and the development of enterprises. The Employers' representative of the Republic of Korea warned against excess support for the jobless and those about to be retrenched, stating that these interventions might hamper the restructuring of the economy and could lead to a chronic fiscal deficit. He pointed out that short-term programmes for the retrenched workers would only have a temporary effect in relieving the pain of unemployment. He went on to explain the example of the United States which had succeeded in creating 10 million jobs during a period in which up to 9 million people were laid off in the course of downsizing by US enterprises. He underpinned this example by emphasizing that country's extensive support, including financial and tax incentives, for the creation of small and medium enterprises. The Employers' representative of the Philippines stressed that job creation policies had to be market oriented and flexible. These policies must support human resources development, including incentives for workers to invest in skills and for employers to provide appropriate training programmes. The Government must provide sound basic education to facilitate the trainability of workers. The Government must also look at a range of policies, including taxes and interest rates, that will support job creation programmes. As enterprises played an important role in economic recovery, government policies should encourage foreign direct investment and the creation of small enterprises. The Government should also develop skills training programmes for self-employment. The Employers' representative of the Philippines acknowledged the contribution of the ILO's Asian and Pacific Skill Development Programme (APSDEP) to human resource development in the region, but stressed that this programme should now become fully tripartite. He suggested that APSDEP be developed further to respond to the impact of globalization and international competitiveness. He spelt out the Employers' support for the proposed ILO recommendation on enterprise creation in SMEs being considered at the 1998 Session of the International Labour Conference.
50. The Government observer from the National Economic and Social Development Board, Thailand, underlined the need for countries to improve and develop the agriculture sector as a means of creating employment in the rural areas. This view was supported by the representative of the Ministry of Planning of Indonesia. He went on to outline the Indonesian Government's policies on labour-intensive public works projects, which the Government saw as providing rapid job creation opportunities during a period of recession. He stressed that the policy focus was changing from capital-intensive policies to people-centred policies. He concluded by stating the major challenge facing many countries affected by the financial crisis was to create productive and sustainable employment.
Social protection
51. By way of introduction, the Employers' spokesperson suggested the need to distinguish between social safety nets -- often used to denote emergency assistance, particularly in a crisis situation -- and social protection, a term used to refer to more permanent institutions such as unemployment insurance schemes. Whenever possible, employers prefer to avoid retrenching workers, as it was expensive and time-consuming to recruit and train new workers when the upturn came. They supported measures to assist workers who became unemployed, it being for governments to take the initiative to provide the necessary assistance. They would also support public work schemes to help provide jobs in areas of high unemployment. The best time for establishing systems of social protection was when economic conditions were good, though it was in such times that employers and workers tended to forget that these arrangements were necessary. During an economic downturn, it was hardly possible to implement a system of social protection. The speaker expressed disagreement with paragraph 46 of Meeting Room Paper 1, which suggested a need during such times "to safeguard and, where possible, to improve worker protection" in certain areas; on the other hand, he supported paragraph 42 which emphasized the need for proper planning of unemployment insurance and other social protection schemes. Such schemes should be affordable and should not erode competitiveness or work incentives. Learning from the present experience, the social partners should devise social protection schemes for implementation once the economy improves, so as to be better prepared for the next downturn.
52. The Workers' spokesperson stated that social protection and employment creation were inseparable elements in ensuring the well-being of working people. The ILO should adopt a more concerted approach in order to reduce the problems of social protection in developing countries, and attention should be paid to the full range of workers' needs, including health care, pensions and unemployment benefits. Referring to the schemes established in the Republic of Korea, she said that other countries in the region must progress from provident funds offering protection of very limited scope to more comprehensive schemes of social protection. These should cater for the needs not only of the workers, but also of their dependants. Social protection should also cover workers in small and medium enterprises and those in the informal sector, who were often excluded from existing schemes. These comments were echoed by a Workers' representative of Japan who referred to the way in which social protection had been improved in the Republic of Korea through a process of dialogue between the social partners. He emphasized the important role of ILO assistance in the field of social protection and suggested that more resources should be made available to the Regional Office for Asia and the Pacific for this purpose. A Workers' representative of the Philippines expressed support for the development of unemployment insurance and referred to the efforts of the trade unions in his country to provide social benefits for their members. Finally, an observer from ICFTU-APRO referred to the shortcomings of schemes in certain countries which in practice were not really meeting the needs of working people.
53. The Government representative of the Republic of Korea referred to the system of social protection in his country, including social assistance for the poor who were unable to work and unemployment insurance for displaced workers. In fact, less than a quarter of the unemployed were receiving unemployment benefits, and other measures were being taken to help the rest. He referred to the efforts being made by workers and employers to minimize unemployment, for example by accepting reductions in working hours and in wages. The representative of the Government of the Philippines suggested that recommendations concerning social protection should take due account of the specific conditions in each country. Careful actuarial studies were necessary in order to assess the sustainability of an unemployment insurance scheme, particularly in a country with a high rate of unemployment. Her own Government had reservations about the feasibility of such a scheme. Other Governments had reservations on other recommendations concerning, for example, basic pensions and progressing from provident funds to social security schemes. The need for basic pensions would have to be weighed against other priorities, such as health care and education. She suggested that the ILO would have to spell out more clearly what was meant by "adequate social protection", and defended governments against the suggestion that this area of policy had been neglected: nobody had been able to predict the severity of the crisis, and in any case it was difficult for developing countries to finance adequate measures.
Tripartism, international labour standards and industrial relations
54. Tripartism was regarded by all the tripartite parties as fundamental to the development of effective solutions to the economic crisis and to the implementation of structural reform measures required to put the countries back on the path to recovery. It was also agreed that tripartism required strengthening in most countries of the region. The Employers' spokesperson felt that weakness of social dialogue acted as a constraint on countries' ability to recover from the economic downturn, and called for the strengthening of industrial relations institutions. Employers' and workers' organizations needed to manage and adapt to the changes which had occurred and had to recognize their responsibility to accept wage policies in tune with the changed economic situation. The Employers' representative of the Republic of Korea referred to the recently established Korean tripartite commission, set up as a requirement of the IMF rescue package, which contributed to overcoming the foreign exchange crisis and agreed on a series of measures required in the process of fundamental structural reform aimed to make the economy more transparent, open and market oriented.
55. The Workers' spokesperson urged the improvement of existing tripartite arrangements to ensure the equal participation of workers' and employers' organizations along with governments in the process. Mutual trust, transparency, accountability and social responsibility were essential prerequisites for effective tripartism. The Workers' representative of Thailand felt that tripartism was weak in most countries of the Asian region, citing Japan and Singapore as countries in which it had been firmly established. The Workers' representative of Singapore cited the example of the Singapore tripartite partnership which had enabled the country to secure full employment for more than two decades, and which had recently been strengthened to meet the challenges of the twenty-first century through the establishment of the Tripartite Economic Committee, the Retrenchment Committee, the Back-to-Work Committee and the Skills Redevelopment Programme. Tripartite consultation would help implementation of the rescue packages of the international financial institutions and ensure consideration of worker's interests in the implementation of programmes. The Workers' observer of the ICFTU-APRO said that while systems of collective bargaining might be in place, backed by codified laws and regulations, implementation was inadequate in many countries and only a small proportion of workers in some industries were covered by the agreements reached.
56. The representative of the Government of the Republic of Korea emphasized the importance of tripartite cooperation in the process of agreeing and implementing sustainable, effective structural reforms, while recognizing that the existing tripartite arrangement in his country remained fragile and needed to be consolidated. The workers' organizations in particular required strengthening to enable them to maintain the social dialogue while meeting the demands of their members. The Government representative of Hong Kong, China, referred to the collective bargaining mechanism in place and to the commitment to the ILO Right to Organise and Collective Bargaining Convention, 1949 (No. 98). While collective bargaining was usually carried out by employers and workers, the Labour Department facilitated the process, if necessary, and was planning to strengthen its capacity to promote voluntary negotiation and workplace cooperation and would seek advice on this from the ILO.
57. The Employers' spokesperson called on governments to provide private sector constituents with up-to-date information so that they could play an effective role in the tripartite process. The representative of the Government of the Philippines emphasized the need for correct information if trade unions were to be enabled to participate fully in this process. While there was agreement between Employers' representatives, Workers' representatives and Government representatives on the importance of tripartism, differences of opinion emerged when it came to details of how tripartism should best be implemented. The Employers' spokesperson felt that a voluntary approach was preferable and that over-legalization would tamper with the effectiveness of tripartite mechanisms. The collective bargaining mechanism in Japan, which took place at company level backed up by a nationwide "spring-offensive" involving all workers, was a successful example of the voluntary approach. He also asked that bipartism rather than tripartism should be emphasized at a time of financial crisis. The Workers' representative of Thailand felt that effective tripartism would be facilitated in his country if the Government promoted workers' right to unionize through the enactment of enabling legislation. He called for the free formation of tripartite arrangements, with equal representation of Workers, Employers and Government, emphasizing that such arrangements would also lead to effective bipartism. The Workers' representative of Japan felt that the driving force for social dialogue could only come from fundamental labour standards. He regretted that the degree of ratification of these Conventions was low in the Asian region. The Workers' spokesperson called on the ILO member States to ratify the seven standards in question.
Closing session
58. The Meeting adopted the Conclusions prepared by a Working Party (see attachment).
59. The Chairperson (Dato' Zainol Abidin bin Abd. Rashid) presided over the closing session. In her closing remarks, the Assistant Director-General responsible for ILO activities in Asia and the Pacific (Ms. Horiuchi) expressed her thanks to the Prime Minister of Thailand, and to the Minister of Labour and Social Welfare of Thailand, for their presence at the Meeting, as well as to all participants. The timeliness of the Meeting, and the importance of bringing together the ILO's constituents with national development planners and the representatives of the ADB, the IMF and the World Bank, had been commented on by many speakers. The outcome would guide the ILO's work in the crisis countries in the immediate and longer term. The crisis presented an opportunity to make advances in a number of fields, and had brought about a widespread desire for the ILO ideals: democratic processes, transparency and good governance, dialogue between partners in society and between national and international institutions, and sustainable development with equity in line with international labour standards. The Meeting's overriding concern had been for security of employment and for action to prevent job losses, as well as to protect workers. There had been common agreement on the interdependence of economic and social stability, and on the role of employers and workers in reconstructing economies. The ILO would continue to provide access to lessons learned, alternatives and best practices. The Meeting had reaffirmed the indispensable role of tripartism as the stabilizing factor in society, and the ILO would continue to promote and support tripartite responses to the crisis, as indicated in the Conclusions to the Twelfth Asian Regional Meeting. The present Meeting had been a significant encounter between the social partners and the multilateral financial institutions, and the latter had intensified their efforts to introduce social concerns in their policies and programmes. She particularly thanked the representatives of the ADB, the IMF and the World Bank for their interest and commitment, and their understanding of the ILO's special role, especially regarding international labour standards.
60. The Employer Vice-Chairperson underlined the importance of the Meeting and congratulated the ILO on the quality of the technical report. The interaction of the three groups with representatives of the ADB, the IMF and the World Bank had been extremely useful. He hoped that the conclusions and suggestions formulated would be brought to the attention of the relevant governments for appropriate follow-up, and that the Governing Body of the ILO would request the Director-General to take immediate action.
61. On behalf of the Worker Vice-Chairperson, the Workers' representative of the Philippines said that the Meeting had offered the opportunity to obtain first-hand information from the multilateral financial institutions on the causes and consequences of the crisis. The debates had stressed the pre-eminence of tripartism as the key to all-round progress, and neither governments, employers nor workers could act in isolation. The Meeting had identified mutually acceptable solutions to the problems facing workers, and the workers' representatives had made a renewed commitment to pursue the cause of workers more vigorously. The speaker hoped that the solutions outlined in the Conclusions to the Meeting would be implemented.
62. In his closing speech, the Thai Minister of Labour and Social Welfare (Mr. T. Suwankiri) referred to the effects of the Asian financial crisis on his country's labour market and the measures that had been taken in response, which were of both an economic and a social nature. He called on countries to recognize that, in today's global economy, national action needed to be complemented through regional solidarity and international cooperation. East and South-East Asia had witnessed how quickly the effects of the crisis in one country impacted on other countries of the region and had global repercussions. He made clear that the ILO's key notions of tripartism and effective industrial relations went hand in hand with Thailand's people-centred approach to development. Labour and social policies must complement economic restructuring and should enhance the creation of more and better jobs. He concluded by pointing out that the challenges were enormous at present. But the crisis was also an opportunity to find new approaches to ensure economic stability and social benefits for all. One should pursue the practical ways for significantly strengthening regional cooperation that were suggested in the conclusions of this Meeting, which could go a long way to redressing the crisis. The outcome of this Meeting must now be translated into practical programmes and activities for implementation. He called for ILO's increased support in this regard, as well as for the increased contributions of the ADB, the World Bank and the IMF towards these ends.
* * *
63. The Governing Body may wish to take note of the Conclusions adopted by the Meeting, which are appended.
Geneva, 5 June 1998.
Point for decision: Paragraph 63.
ILO High-Level Tripartite Meeting on Social Responses to
the Financial Crisis in East and South-East Asian Countries
Bangkok, 22-24 April 1998
Conclusions submitted by the Working Group
As requested by the Twelfth Asian Regional Meeting (Bangkok, 9-11 December 1997), the International Labour Organization convened a High-Level Tripartite Meeting on Social Responses to the Financial Crisis in East and South-East Asian Countries in Bangkok from 22 to 24 April 1998. The Meeting adopted the following conclusions:
1. The Meeting welcomed the initiative taken by the ILO in organizing the Meeting and in preparing the background report for the Meeting. It expressed grave concerns at the deterioration in labour and social conditions in some countries. It also expressed appreciation for the opportunity to have a dialogue with representatives of the IMF, the World Bank and the ADB on the issues concerning the financial crisis.
General considerations
2. The currency and financial crisis in South-East and East Asia has led to a severe decline in the GDP growth in the worst affected countries. For those countries, this has caused a swift and substantial rise in unemployment, underemployment and poverty that has been unprecedented in recent decades. This shock is all the more severe since it was totally unanticipated after decades of sustained high growth in output and employment and has occurred in a context of relatively underdeveloped systems of social protection in some countries.
3. The crisis was caused by several factors. Weaknesses in the international financial system amplified the depth and contagion effects of the currency and financial crisis which were initially provoked by accumulating deficiencies in domestic economic policies. Prominent among the latter were macroeconomic policies and financial systems which led to unsustainable levels of private sector external indebtedness. This was aggravated by a lack of transparency in economic management and corporate governance which led to a substantial misallocation of resources.
4. The response required is appropriate policies and programmes of structural reform and institutional change that are directed at achieving a restoration of stable economic growth. It is only in the context of sustained economic growth that durable solutions to social problems are to be found. A major element of this reform process will involve the correction of policy and institutional deficiencies, where appropriate. There should be greater efforts to ensure that the necessary decisions are made to establish appropriate regulation of financial systems and improve corporate governance, and the functioning of markets. It is important to note that it is only in the context of well functioning and undistorted markets that competitive enterprises will emerge and thrive. And this, in turn, is vital for sound economic growth and sustainable employment creation.
5. These reform processes can provide a foundation for the development of efficient and equitable economic and social policies. This is especially true with respect to the development in some countries of adequate systems of social protection which are essential for coping better with problems of economic restructuring and possible future crisis. In this context, respect for basic international labour standards provides fundamental enabling conditions for independent, strong and representative worker and employer organizations to develop productive social partnerships. The Meeting reiterates the call by the Twelfth Asian Regional Meeting for countries of the region to respond to the Director-General's campaign for the ratification of the core international labour standards.
6. The strengthening of social protection is required, and especially the development and extension of mechanisms for basic social protection to those sectors of the workforce that are currently unprotected, and expanding schemes which may include unemployment insurance, and basic minimum pensions as appropriate, having regard to the situation prevailing in each country. To alleviate the social impact of the economic crisis, appropriate temporary measures are required such as direct employment-creation programmes, and measures to facilitate the redeployment of displaced workers. In this regard, assistance from the ILO is essential.
7. These measures to help relieve distress need to be accompanied by strong efforts to minimize further increases in unemployment during the current economic downturn. In this context, economic policies and worker-management cooperation to save economically viable enterprises and jobs need to be vigorously promoted.
8. In dealing with all these immediate policy priorities, tripartite dialogue and cooperation at the national level has an indispensable role to play. It is the means for ensuring an equitable sharing of the burden of adjustment, for mobilizing broad social support that is essential for the successful implementation of programmes, and for promoting harmonious and cooperative, positive-sum solutions to pressing economic problems.
9. The attainment of these reform objectives and the restoration of growth will be greatly facilitated by enhanced international cooperation, especially at the regional level. Cooperation can also yield other mutual benefits such as the mutual expansion of markets. There is a need for countries to share information on a wider and more timely basis, as it would enable governments and the social partners to react to adverse conditions expeditiously.
10. Similarly, enhanced collaboration between the ILO and the international and regional financial institutions will contribute to a strengthening of the social dimension of economic adjustment programmes. In particular, increased consultations between the social partners and the financial institutions on the design and implementation of economic adjustment programmes will strengthen social support for them and hence significantly improve the prospects for successful implementation. Such a role for the social partners should also be promoted in relation to other international agencies involved in economic adjustment programmes. The meeting called upon the IMF, the World Bank, the ADB and the ILO to increase their cooperation in the design and implementation of programmes.
11. Within this overall framework the Meeting identified several priority areas for action in containing the social costs of the crisis and in building stronger policies and institutions for the future. These are intended to provide a broad set of guidelines for the formulation of country-specific policies and programmes which would, in turn, determine priority areas for ILO action at the national level, based on tripartite consultations with the country concerned.
12. The Meeting called upon the ILO to mobilize its resources in the region and at headquarters, in order to provide the assistance required. The ILO should also make every effort to seek funding from, and coordinate closely with, external donors, including the international financial institutions.
Employment promotion policies
13. The substantial job losses that have occurred in the wake of the crisis have served to highlight the importance of paying attention to the sustainability of jobs that are created, as jobs created in enterprises that are fully competitive are most likely to remain durable. It is important to strengthen the capacity of governments to gather information and monitor the employment implications of overall economic policies and development. Close collaboration between labour and economic ministries can contribute significantly to the maximization of the rate of sustainable and productive employment creation.
14. It will also be important to pursue, as a major objective of employment policy, the continual upgrading of the educational and skill levels of the labour force. Such investments in human resource development are essential for supporting the constant industrial restructuring and technological upgrading that is required to maintain international competitiveness in a globalized world economy. Increasing skill levels contribute to greater adaptability and higher productivity of the labour force. Moreover, from the standpoint of the individual worker higher skills also means greater employability and hence confers increased employment security. For all these reasons government policies should promote both public and private investment in human resource development. It will be particularly important to provide incentives for employers to invest in skill development and for workers to seek to upgrade their skills.
15. Institutions for designing and implementing active labour market policies will also need to be strengthened. Current capacity in this respect is limited and this has precluded a substantive response to the problem of redeploying displaced workers during the current crisis. The development of comprehensive labour market information systems to allow for timely monitoring and anticipation of labour market problems is one basic requirement. Another is the development of public employment services that are fully capable of facilitating job search and placement, of organizing retraining for displaced workers, and of implementing cost-effective employment promotion schemes. Both public and private employment services will be important for increasing the reach and effectiveness of active labour market policies.
16. Issues concerning migrant workers have become acute as a result of the crisis, which has made more urgent the need for clearer policy goals and better implementation. Bilateral agreements, where appropriate, can assist in this process. The ILO should provide advisory services and technical assistance in particular training to facilitate the reintegration of migrants upon return to their countries of origin.
17. There is a need for more information and analysis on the impact of the crisis on the problem of child labour, particularly on the most intolerable forms of child labour, such as child prostitution, child trafficking and work in hazardous conditions. The ILO should continue to mobilize resources for the International Programme on the Elimination of Child Labour (IPEC), including monitoring and analysis of the developments of the child labour situation in the countries concerned. It should also actively promote the ratification and implementation of the Minimum Age Convention, 1973 (No. 138).
18. More information and analysis is also needed on the impact of the crisis on the employment and working and living conditions of women, to serve as a basis for developing appropriate policies and programmes in order to prevent and remedy any possible discrimination against women. The ILO should provide assistance in this regard.
Enterprises and job creation
19. As stated in the conclusions of the Twelfth Asian Regional Meeting, employment should be promoted through sound enterprise development strategies, investment in human resources and a business environment which is conducive to sustained enterprise competitiveness in a rapidly changing global economy, and new employment opportunities will largely depend on private enterprises, particularly small and medium enterprises. Job creation, which is the most vital strategy for recovery, depends on competitive and successful enterprises. It is therefore important to create a business environment that promotes investment, including foreign direct investment, and enterprise activity. Such an environment would include transparency in economic management, stable macroeconomic policy, open markets, investment in human resource development, avoidance of excessive regulation, responsive labour markets and sound industrial relations.
20. The measures suggested in the proposed ILO Recommendation on "General Conditions for Employment Creation in Small and Medium Enterprise" which is being considered for adoption at the 1998 International Labour Conference provide an appropriate framework for action which can be targeted at the following areas: (a) creating an enabling policy, legal and regulatory environment conducive to enterprise creation and development; (b) promoting local economic development for job and enterprise creation; (c) promoting enterprise development for retrenched workers; (d) entrepreneurship development for women; (e) enterprise development for trainees from skills training centres; (f) improving access of micro, small and medium enterprises to business development services including credit; (g) improved working conditions in SMEs; and (h) capacity-building for employment and advisory services to provide effective support for the small and medium enterprise sector.
21. Consideration should be given to the implementation in the countries concerned of the ILO's new International Small Enterprise Programme (ISEP) which provides an integrated approach to SME development, and incorporates a range of existing practical small enterprise development support materials, including the Improve Your Business (IYB) and Start Your Business (SYB) programmes, Know About Business (KAB), Work Improvement and Small Enterprises (WISE), and the Women's Entrepreneurship Development (WED) initiative recently launched in the region.
22. The ILO can contribute to the strengthening of existing enterprises through programmes to improve productivity and competitiveness, including bipartite approaches at the enterprise level. ILO action programmes in areas such as productivity and quality jobs, small and medium enterprise development, and local economic development can form the basis for advisory services to the affected countries.
23. The social consequences of enterprise restructuring and privatization should be addressed through bipartite and tripartite consultation and the ILO can assist by providing advice and support, such as training, retraining, compensation packages and employment creation.
24. Special assistance can be provided to enhance the productive job-creation capacity of the rural and informal sectors. In the rural areas, an emphasis on skills training can be combined with opportunities for self-employment through micro-enterprise development programmes and revolving credit schemes to support self-employment and income-generation activities. ILO actions can contribute to improving the quality and productivity of jobs in the informal sector. In relation to the urban informal sector, the ILO's work under the Interdepartmental Project on the Urban Informal Sector has generated ideas to improve employment and working conditions, and these have been incorporated into the global programme, "ILO Urban Employment Programme: Better Jobs for the Informal Economy".
Social protection
25. Countries should seek to preserve, and if possible, increase social budgets, which during this time of crisis, are indispensable to provide basic protection in relation to incomes and essential services for those most in need. This issue should be included in dialogues with the international financial institutions.
26. The ILO should as a matter of priority promote the introduction of unemployment insurance and provide information on potential costs and administrative feasibility. It could provide advice on actuarial and social budgeting and assistance in drafting laws and regulations and in planning the implementation of a new scheme. Care should be taken not to impair the viability of enterprises.
27. Countries affected by the crisis should take appropriate action to ensure adequate protection of workers' wages and severance pay, taking into account the Protection of Workers' Claims (Employer's Insolvency) Convention, 1992 (No. 173) as well as the Termination of Employment Convention, 1982 (No. 158). The ILO could provide advice on the establishment of wage and severance pay guarantee schemes, with the active involvement of employers' and workers' organizations. Moreover, the ILO should assist governments in strengthening the capacity of the labour inspectorate to ensure effective protection of workers' rights, taking into account in particular the provisions of the Labour Inspection Convention, 1947 (No. 81) and the Labour Administration Convention, 1978 (No. 150).
28. Governments are encouraged to provide a social safety net for those affected by the crisis and those who have no access to unemployment insurance or even severance pay, particularly the most vulnerable groups such as women and children. Since the design and funding of such safety nets is complex and will take time, alternative temporary relief measures will need to be identified and implemented as a matter of urgency.
29. In the long term, provision of a basic minimum pension to the large and growing number of people too old to work and without other forms of income, is a crucial step in preventing poverty and mitigating the effects of a financial crisis. The ILO should provide advisory services to its constituents on the introduction of basic pension schemes.
30. The crisis revealed the importance of having adequate social security systems to protect the unemployed and other vulnerable groups. The affected countries should review the adequacy of their systems. The ILO, which has the necessary expertise, can assist in this.
31. National authorities should also endeavour to improve the governance of social security systems. The ILO should assist them, in consultation with employers' and workers' organizations, to improve compliance, record keeping and administrative efficiency, and to control costs, with the aim of ensuring effective protection for workers covered by the social protection system.
32. Informal sector workers in urban and rural areas should be a priority target group for ILO assistance, since they enjoy no social protection. This should include assistance to countries to broaden as appropriate the base of their social protection system, including development of policy for the informal sector, determination of target populations and the priority social protection areas, assistance in designing schemes for the informal sector and in building capacity to implement and monitor pilot schemes, as well as measures to improve conditions of work and life.
33. Care should be taken that despite the cost-cutting pressures on enterprises resulting from the crisis working conditions and occupational safety and health standards should not be reduced. Indeed, measures to improve working conditions and prevent occupational accidents and diseases can and should be fully consistent with higher enterprise productivity and competitiveness, and the ILO should provide practical assistance to employers and workers in this regard, taking into account relevant international labour standards on occupational safety and health and working conditions, especially the Occupational Safety and Health Convention, 1981 (No. 155).
Tripartism, industrial relations, and international labour standards
34. The ILO should make available all possible assistance to improve compliance with the seven fundamental Conventions.
35. The debate highlighted the importance of the participation of workers and employers in the search for solutions to crisis-induced problems. Independent strong and representative organizations of workers and employers are the foundation for such participation to occur, for tripartism to be credible, and for collective bargaining to develop. Improving respect for freedom of association is a prerequisite for the growth of these organizations and thus for reaping the benefits of participation. The reform of labour laws in order to remove obstacles to freedom of association should be given priority. The ILO should increase its technical assistance to governments in this regard, to ensure that employers and workers can enjoy their fundamental rights of association and free collective bargaining, as defined in Conventions Nos. 87 and 98.
36. With the removal of legal and practical obstacles to the formation and functioning of workers' and employers' organizations, their development and growth will depend in part on the quality of services these organizations offer. The ILO should increase assistance to both workers' and employers' organizations in their efforts to build their capacity and improve their services.
37. Tripartism at the national level can play an effective role in building the social consensus required for difficult policy choices in varying circumstances. To strengthen tripartism, the ILO should accelerate its training activities since workers' and employers' organizations, as well as governments, often need training in tripartism, the range of its possible mechanisms, the roles played by the tripartite actors, and the skills of negotiation and conciliation required to sustain social dialogue. The range of matters subject to tripartite deliberation has often been narrow; there is now greater need for the scope of national tripartite dialogue to cover the full range of economic and social policy choices. So that they can fulfill this function properly, the ILO should assist in upgrading the expertise of workers' and employers' organizations in areas such as labour market or economic policy, or social security.
38. There is also a need to strengthen collective bargaining and labour-management cooperation at enterprise level. Job losses will be inevitable, but experience confirms that there often exist alternatives to retrenchment. Labour-management dialogue can reveal ways in which costs can be lowered and flexibility, productivity and job security improved. Governments, as well as workers' and employers' organizations should actively promote workplace cooperation. The ILO should assist through training in workplace cooperation, in negotiated solutions to enterprise restructuring and through dissemination on information on best practices. The establishment of bipartite or tripartite mechanisms at all appropriate levels to further the search for solutions to problems of job loss, training and retraining, income and employment security should also be pursued.
39. There has been a rise in the number of labour disputes associated with the crisis. The ILO should continue to offer training to labour inspectors, conciliators, mediators, arbitrators, labour court judges and the like, as well as employers' and workers' organizations and labour-management committees in techniques of dispute resolution. Efforts should also be directed to the prevention of labour disputes through building or strengthening workplace cooperation, and to the improvement of the mechanisms and institutions for the prevention and settlement of disputes, including the relevant legislation and its application.
40. Sound industrial relations provide social stability, improve enterprise performance, provide the means for securing commitment to adjustment measures and ensure a fair burden-sharing of their costs. Independent, strong and representative worker and employer organizations are necessary partners in labour market governance. The ILO should promote sound industrial relations as a major element of economic and social development in Asia.
41. The Meeting encourages governments to continue their efforts, in consultation with the social partners, to alleviate the adverse social consequences of the crisis and to stimulate economic growth.