ILO is a specialized agency of the United Nations
ILO-en-strap
Governing Body

GB.274/ESP/4
274th Session
Geneva, March 1999

Committee on Employment and Social Policy

ESP

FOURTH ITEM ON THE AGENDA

Employment activities of the ILO
in the context of economic crises

Contents

I. Introduction

II. The global economic crisis

III. The global economic crisis and ILO activities and responses: An overview

IV. ILO action: Selected activities

V. Impact assessment and monitoring

VI. The future role of the ILO

Appendices:

  1. Major activities carried out in response to the economic crisis in Thailand
  2. Bulgaria: Monthly exchange rate and development of the consumer price index (CPI), 1996-97
  3. The ILO's Employment-Intensive Programme (EIP): An independent evaluation
  4. Table 1. Rates of unemployment worldwide
  5. Table 2. Growth rates of employment and labour force (percentages)
    Table 3. Revisions to world growth projections (per cent change in world real GDP)
  6. Table 4. GDP annual growth (per cent) compared to GDP for 1987 (at constant prices and exchange rates)
  7. Table 5. Increase in poverty due to the crisis (1998 forecasts)
    Table 6. Production and employment in selected countries in Central and Eastern Europe, 1989-97 (per cent change over period, production in constant prices)
  8. Annual economic growth in Latin America, and in two of its giant economies, Brazil and Argentina (Source: UN Economic Commission for Latin America and the Caribbean)

I. Introduction

1. At the 273rd Session of the Governing Body (November 1998), the Committee expressed concern at the growing economic crisis severely affecting many member States, and in particular in their inability to stem rising unemployment, poverty and job insecurity. The Committee noted that global growth was slowing, with most forecasts undergoing substantial downward revisions. While the crisis-affected countries of Asia recorded dramatic contractions in their GDP, many other countries, including those with significantly large economies, such as Brazil, struggle to avert a serious economic disaster. The Russian Federation is already in a state of deep economic distress. The Committee noted that while the current problems of specific countries are extremely serious and require immediate measures and action, there is an overall economic crisis which is virtually global and which is affecting many more countries.

2. In this context, the Committee requested the Office to provide a brief global picture of the nature of the worldwide crisis and the ILO's action to aid specific countries. The Committee urged the Office to identify its major activities in response to the global and national crises and to provide an account of the impact and monitoring mechanisms of such interventions in order to review the future role of the ILO in supporting its constituents in coping with and recovering from crises. The present Office paper has been prepared to address the above concerns of the Committee.

II. The global economic crisis

3. The ILO's World Employment Report, 1998-99 shows that even before the onset of the Asian financial crisis average unemployment rates in Europe remained high, and were increasing in many countries in Latin America, Africa and Central and Eastern Europe. In the United States and large parts of Asia on the other hand employment growth had outstripped labour force growth (see tables 1 and 2, Appendices IV and V). The advent of the Asian crisis has changed this situation, at least with respect to Asia. Unemployment, underemployment and poverty rapidly increased in the affected countries (see table 5, Appendix VII). In Thailand total labour input fell by some 7 per cent in a six-month period.

4. Recent trends in the world economy suggest that the turbulence is not geographically restricted and is likely to reduce global growth. Major forecasting institutions have revised their estimates of future world growth: the IMF has lowered its estimates for 1999 from 3.7 to 2.2 per cent. The World Bank has also reduced its estimates (see tables 3 and 4, Appendices V and VI).

5. Some countries are however better placed to deal with a financial crisis than others. In today's global economy the large concentration of output in a few countries affords them greater protection against external shocks. Seven industrialized countries account for around 44 per cent of world output, and all developing countries taken together account for some 40 per cent. The industrialized countries are thus a major determinant of world growth. The countries able to withstand the shock of a financial sector-led crisis in terms of its fallout on sustainable livelihoods and employment conditions are likely to be those with well-funded social protection systems.(1) 

6. The manner in which financial sector crises work themselves out in individual economies varies. It is however clear that the risks that accompany flows of capital and generate volatility in financial markets can trigger economic collapse in one set of countries and in turn produce chain reactions and contagion in others. The causes of such volatility are subject to debate, and explanations range from financial panic and inappropriate macroeconomic policies to the lack of transparency and moral hazard in the operation of financial systems. Highly indebted countries and those with a poor fiscal position are most likely to be at risk.

7. The current financial crisis continues to ravage several Asian countries, and carries the potential to drag many other countries down. However, it can be traced back to the mid-1980s, when growth in many developing countries shrank in line with recessionary tendencies in OECD member countries. Many developing countries failed to regain sustainable growth. The crisis spread further when the former command economies failed to realize a smooth transition to market economies. Several countries caught up in armed conflict saw their economies shattered as they struggled towards peace. These have been a special focus of ILO concern.

8. The broad regional dimensions of the global economic crisis described in the ILO's recent World Employment Report, 1998-99 are fairly bleak. The most dramatic changes in economic and social indicators have been registered in the crisis-stricken countries of Asia. A full analysis of the Asian crisis will be presented at the Symposium on the Social Impact of the Asian Financial Crisis during the current session of the Governing Body (19-20 March 1999).(2) 

9. The economic and employment outlook in Latin America is weak (see Appendix VIII). The region depends substantially on outside capital and the terms on which it can borrow have worsened. The economic scenario in Brazil is disturbing and may have an adverse effect on other Latin American countries. Slower growth in the region will reduce formal sector employment, which is in any case under threat from technological upgrading following liberalization and further increased competition. Open unemployment could reach nearly 10 per cent in 1999.

10. In the Arab States and southern Mediterranean countries the prospect of economic growth is uncertain. Many oil producers have not acquired the flexibility or the necessary approach to labour market functioning to diversify their production. Others are stuck at a mid-point between government control of production and support for private business so that the parameters of the business environment are discouragingly arbitrary.

11. Growth in Africa is strongly affected by commodity prices where the negative effects of low prices for primary exports outweigh the benefits of low prices for food and fuel imports. Major African countries have suffered setbacks for their own specific reasons, but the CFA countries, with an exchange rate fixed to the French franc (now effectively the Euro), have benefited from their currency's weakness against the US dollar. By and large the region has not made the breakthrough to sustained exports and economic growth despite years of structural adjustment reforms.(3)  Though some progress has been recorded on some social indicators, there has not been any significant rise in substantial labour productivity. Modest turnarounds in economic growth have taken place in several countries, but unemployment and poverty remain acute, and in many countries are on the increase.

12. In Central and Eastern Europe several economies are experiencing prolonged stagnation (see table 6, Appendix VII). Admittedly, the Visegrad countries close to Western Europe are better placed and their growth can be expected to pick up soon. Their unemployment levels are, however, likely to prove as obdurate as those in much of Western Europe. Increasing attention is being focused on the Russian Federation which, together with several other CIS countries such as Ukraine, is unable to stem the continuous decline in economic growth. The Russian economy is estimated to have contracted by almost 5 per cent during 1998, following a partial default on foreign debt in August 1998.

13. Finally, the means to reduce high unemployment and a large proportion of the long-term unemployed continues to dominate policy debate in the European Union. European economies need to attain substantial growth rates if they are to reduce substantially their current levels of unemployment and make a major contribution to global revival. While the United States has experienced several successful years of output growth and reduction of unemployment, the failure of the average wage of production workers to rise over a long period is a cause for policy concern. Among the OECD countries, perhaps Japan currently faces the most uncertain growth prospects, having experienced significant contractions in output during 1998 and recorded the highest rate of unemployment since the 1970s.

14. Economic growth has largely declined across all regions, and several countries are in a state of prolonged and protracted stagnation of output and employment, whether induced by conflict, adjustment reforms or transition-related factors. The Asian crisis, bringing dramatic downturns in growth and standards of living in several Asian countries, has added significantly to the global employment crisis, with close to a billion people unemployed or underemployed. The downward revisions of global and regional growth rates by major forecasting institutions introduce further reasons for concern about growing unemployment, poverty and job insecurity.

III. The global economic crisis and ILO activities
and responses: An overview

15. In November 1998 the Committee requested the Office to describe the major activities undertaken by the ILO in response to the economic and employment crises. Before discussing specific examples, the Committee may wish to reflect on the broader level of ILO response to the evolving challenges.

16. The main elements of the ILO's response to an extended period of weak employment brought about by the economic crisis include the following:

17. Throughout the 1980s and 1990s the ILO has continued to express concern at the global level over the so-called Washington Consensus on stabilization and structural programmes. Those concerns were not about whether countries needed to adjust to fast-changing global systems of production and trade, but rather the processes and instruments selected which had failed to deliver the intended goals of growth, on which higher employment was predicated. The ILO convened its first High-level Meeting on Structural Adjustment in 1987, expressing strong concern over the social impact of adjustment and the neglect of ILO principles. Similar themes were subsequently treated and discussed at tripartite regional meetings held in Africa, Latin America and Asia.(4)  The role of the ILO's responses and activities in relation to stabilization and structural adjustment programmes adopted in almost all developing countries has generally succeeded in shaping and articulating social concerns at the national level. Furthermore it has influenced the orientation of these programmes quite significantly towards the social dimensions of adjustment and the incorporation of special measures by the Bretton Woods institutions to cushion potential negative efforts of their reform policies (e.g. the social funds).

18. ILO principles were fully supported by the World Summit for Social Development in March 1995, at a time when the whole world was caught up in a wave of rising unemployment. World leaders responded by committing themselves to "promoting the goal of full employment as a basic priority of our economic and social policies and to enabling all men and women to attain secure and sustainable livelihoods through freely chosen, productive employment and work" (Commitment 3). This provided recognition that the goal of full, productive and freely chosen employment (Employment Policy Convention, 1964 (No. 122)) was not only feasible, but that there was a strong economic and moral case to regard it as a priority policy objective. World leaders also committed themselves to safeguarding basic human rights and to formulating policies with the participation of employers' and workers' organizations. They recognized that the ILO had a special role to play both on the national and international scene "because of its mandate, tripartite structures and expertise".

19. Since the Copenhagen Declaration, the ILO has tried to foster tripartite consensus on what would constitute sound economic and social policies to ensure growth and social protection. The tripartite conclusions of the Committee on Employment Policies at the International Labour Conference in 1996 provide broad guidelines that are relevant to all countries. The Committee may recall that the conclusions contained the following core concerns:

IV. ILO action: Selected activities

20. This section provides an illustration of ILO action in response to the employment crisis in selected countries. Five areas of major activity are covered, and the action taken described briefly. Where available, a short impact assessment of the action has also been included. The final section reviews selected target-oriented ILO programmes to address the gender dimension in crises, but it should be borne in mind that women's employment and gender discrimination are cross-cutting concerns incorporated in all other activities mentioned below.

(a) Job losses, the promotion of active labour
market policies and employment services

21. The ILO's approach to large-scale job losses and retrenchment is based on coordinated efforts between government agencies and employers' and workers' organizations. The specific measures that can be effective depend on the opportunities and constraints presented by the regulatory and legislative framework, firm labour-management relationships, and the strength of collective bargaining.(5)  In the specific circumstances of the Asian financial crisis, effective response packages have featured institutional support for improving labour market information systems; identifying long-term human resource development needs and designing appropriate retraining programmes; strengthening institutions for social dialogue at both the enterprise and national levels; enlarging the capacity of social security measures commensurate with growing needs; and assisting employment services in improving their performance as a job information clearing house.

22. In Asia the current crisis has highlighted the need for improved social dialogue at the national level to forge response strategies and, at the enterprise level, to enable firms to carry out adjustments more equitably. This was clearly endorsed at the ILO's Regional Tripartite Seminar on the Termination of Employment, held in Seoul in November 1998. In Thailand, the ILO organized a National Tripartite Forum (November 1997) to bring together Thailand's labour and employers' organizations to develop a common understanding of the causes and extent of the crisis and to agree on the specific action to be taken. Training in specific practices to promote tripartism has also been provided through courses in workplace cooperation, and efforts are being made to extend access to such training at both the enterprise and national levels elsewhere throughout the region. ILO efforts have also aimed at improving tripartite involvement in the decision-making of international and national policy bodies. The High-Level Meeting on the Asian Financial Crisis, held in April 1998, was the most visible of these efforts. The ILO is now following up on a large number of these tripartite recommendations within an overall framework of promoting jobs and job protection.(6) 

Promotion of active labour market policies

23. The ILO has advocated and promoted a wide range of active labour market policies and measures aimed at improving the employability of workers and the capacity of economies to create new jobs. Job retraining and job search assistance has targeted displaced workers and those at risk. Measures to accelerate employment creation have included finding the means to preserve existing jobs within the framework of restructuring; the design and promotion of various active labour market policies, including job placement schemes; support to national employment services; fostering the growth of small and medium businesses; training and retraining; and local economic renewal plans, etc.(7) 

24. In order to influence unemployment and employment adjustments more directly, cushion redundancies and integrate the unemployed in the labour market, government and social partners in the OECD countries have used labour market policy for quite some time. Passive and active labour market policies (ALMP) are among the few instruments in the tool kits of policy-makers with immediate consequences for the labour market: they enhance job searches and job matches, and the creation of additional jobs, while generally providing replacement income. Passive, income replacement-oriented programmes include unemployment insurance benefits and all other benefits paid on the condition of not being active, such as early retirement benefits. Active policies comprise a whole range of measures acting on both the supply (e.g. training) and demand side (e.g. job creation) of the labour market. These instruments are important both in spending and participation terms and have become virtually permanent institutional features of the labour markets of industrialized countries.

25. A recent ILO comparative review of four countries of the European Union (Austria, Denmark, Ireland and the Netherlands) highlights the important role of ALMP, observing that it has contributed, along with other factors, to the relative employment successes in those countries.(8)  The role of ALMPs is apparent especially in Denmark and Ireland, both of which make considerable use of ALMPs. The report has further examined mechanisms for more effective implementation of ALMPs, including improved implementation structures.

Promotion of active labour market policies in
transition economies of Central and Eastern Europe

26. After the introduction of economic reforms, the transition countries of Central and Eastern Europe experienced large contractions of employment which were partly translated into open unemployment, partly into economic inactivity and a rapid increase in informal employment. In response to these new challenges, all the transition countries amended their national labour legislation in order to create a sound regulatory framework for their labour markets. They also restructured their labour market institutions and established national employment services. In both these tasks the ILO supported several countries by helping to develop their capacities, improve their unemployment benefit systems and design their active labour market policies.

27. Technical assistance provided to Ukraine, for example, has concentrated on two main activities: preparation of the Country Employment Policy Review (CEPR), and the development of the national labour market information system. The aim of the CEPR was to identify the main problems in the labour market, identify weaknesses in labour market institutions and policies hindering proper responses to these problems, and make appropriate policy recommendations. In the seminar discussing the Review, the social partners stressed the importance of the conclusions and recommendations for improving national labour legislation (the concrete examples mentioned included the funding of labour market policies and the status of the Employment Fund) and for the improved functioning of the labour market. Follow-up activities comprise technical assistance to strengthen the capacity of the State Employment Service so as to implement labour market policies effectively and assist jobseekers in job placement, assistance in local labour market restructuring of the Chernobyl region, and several other activities.

28. Another substantial activity has concentrated on the improvement of the national labour market information system. Within this project (conducted by the ILO's Bureau of Statistics -- STAT), extensive assistance has been provided to improve the statistical methodology, labour market data collection and processing and the production of statistical materials, which have helped considerably to strengthen the capacity of national labour market institutions to provide better assistance to jobseekers and to refine labour market policies.

29. The ILO has also conducted several local area-based employment generating projects in selected regions suffering from high unemployment. Certain regions were disproportionately affected by economic transformation, especially those dependent on a single declining industry or privatization of major state-owned enterprises. The main goal of these projects was to bring together all local economic actors to discuss the problems in order to find proper, feasible solutions and closely cooperate on their implementation. These projects were conducted in the coalmining and steel-producing region of Ostrava (Czech Republic), the ore- mining region of Spišská Nová Ves (Slovak Republic), the textile region of Ivanovo (Russian Federation) and the rural region of Anenii Noi (Moldova). The latter was conducted with the aid of a UNDP-funded project. The ILO helped the social partners in these regions to elaborate a long-term development strategy; to strengthen regional tripartite bodies responsible for coordinating the activities of regional actors towards the revitalization of the region; to promote new job generation schemes; and to provide training in specific aspects of local labour market restructuring and adjustment.

Community-based training for self-employment

30. In 1993 a Meeting of Experts on Community-Based Training for Self-Employment and Income Generation reviewed experience of technical assistance in the development of national capacities for training and employment. In view of the limitations of conventional training and employment promotion programmes, community-based and community-owned, demand-driven initiatives appeared to be a viable and feasible approach in responding adequately to the needs of poor communities. The Meeting recommended developing a generic approach under the umbrella term of "community-based training for self-employment and income generation" (CBT).

31. The CBT approach is based on the application of a systems approach, comprising awareness building and the organization of support at the national and local levels, the identification of potential and actual employment opportunities and resources, the design and implementation of appropriate training programmes, the provision of post-training support services, and the evaluation of programme impact and sustainability. The CBT approach provides the necessary tools for the development of capacity among national and local employment and training organizations, and initiates working arrangements between the social partners and other support institutions (NGOs, the private sector, etc.). The CBT advocates an approach aimed at both specific areas and target groups, combining direct and indirect measures but with a strong emphasis on capacity-building among the institutions involved and feedback to policy-makers.

32. The ILO has played a catalytic role in the introduction of the CBT approach through the organization of national and regional technical and project-formulation workshops, as well as providing technical assistance and playing an advisory role in order to initiate and guide the process through technical cooperation projects, followed by the preparation of project proposals for Nepal, Kyrgyzstan, Azerbaijan, Belarus, the Russian Federation, Pakistan, Sri Lanka, Bangladesh, Uganda, United Republic of Tanzania and Bahrain. Projects have started in Azerbaijan, Belarus, Nepal and Sri Lanka. The necessary advisory services have been provided on the practical application of the CBT approach to various regional and national programmes and projects directed towards (self-) employment promotion and poverty alleviation.

Retraining the unemployed

33. The longer workers remain unemployed, the less likely they are to find a job. Skill levels run the risk of deteriorating, and employers are increasingly hesitant to employ them. The social dimensions of this problem are enormous, and should be tackled with policy measures and programmes aimed at reintegrating the unemployed into the labour market. The ILO's Modules of Employable Skills programme (MES) facilitates cost-effective skill upgrading for workers, training and retraining for the unemployed, and places emphasis on employability to ensure that training matches the skill requirements of the employment market. MES also supports training systems at both the national and regional levels, and promotes effective training on the job and in institutions.

34. With ILO assistance, a number of member States have made significant progress in the introduction of employment-oriented modular training methods and programmes. Such programmes and projects have been designed and implemented successfully in China, Bulgaria, Egypt, Sri Lanka, Kenya and, in the recent past, in Poland and the Russian Federation, where training centres for modular employment-oriented training were established. In the last two countries a national network of 150 training institutions was set up and modular training programmes developed. Some 500 persons were trained in modular curricula development, and regular seminars are being organized to train coordinators and representatives of enterprises and training institutions. Technical assistance projects aimed at introducing the competency-based modular approach to the training and retraining of adults and the unemployed commenced in 1997 in Belarus, Ukraine, and Bosnia and Herzegovina.

Employment services

35. While the global employment crisis warrants the vigorous promotion of active labour market policies, most developing countries and those in transition are poorly equipped in terms of the resources and institutions needed to cope with the challenges entailed. Furthermore, the labour market has become both more flexible and fragmented. The mechanisms of labour allocation have also changed with the development of information technology systems, the emergence of diverse providers of intermediary services for placement and training, and the increasing role of the social partners and local authorities in the redeployment of workers dislocated as a result of economic restructuring.

36. All these changes affect the Public Employment Service (PES), and have led to questions about the degree of involvement of public employment services in the operation of the labour market as a whole. In many countries they have become a service for the unemployed rather than an employment service operating within a wide labour market context. They have also faced pressure to reform and restructure. The privatization of the public employment service has been seen as a solution in a number of advanced countries, including Australia, New Zealand and the United States (in particular the states of Massachusetts, Texas and Michigan). Elsewhere, public employment services are poorly placed to contain the kind of employment crisis afflicting many developing and transition economies.(9)  The task of the employment services is recognized as significant, yet the means to implement the required labour market policies is pitifully low.

37. In Poland a technical cooperation project funded by the Swiss Government was implemented by the ILO from January 1995 to June 1997 to promote self-employment through the national employment services. The major activities of the project were the development of information materials (including audio-visual) for the unemployed and potential jobseekers; the preparation of reports and guides on self-employment to be used by employment services staff and the partners involved in the promotion of self-employment; the training of the staff of the employment services in self-employment promotion; the development of technical expertise on self-employment promotion among the unemployed; and the establishment of model local labour offices in six voivodships (municipalities), such as coalmining centres, which have undergone profound economic restructuring.

38. According to a tripartite evaluation workshop held in December 1996 in Sosnowiec, Poland, the model offices and neighbouring offices have been successful in setting up a system of information and initial counselling on self-employment alternatives for the unemployed and school leavers; setting up organizational structures to perform direct and referral functions for the promotion of self-employment for the unemployed; developing capacities and modalities for active cooperation with the self-employment promotion institutions and organizations concerned; developing training programmes and infrastructure to train employment services staff and local self-employment promotion partners; and in disseminating positive experiences to other voivodships and to the national network of employment services. What the technical cooperation project had not achieved on completion was the development of collaboration with banks (due mainly to a lack of interest on their part) and other public or semi-public institutions to attract funds other than the labour fund for the promotion and creation of self-employment among the unemployed.

39. Since 1990, the ILO has been undertaking technical cooperation activities in Africa to reorganize and improve public employment services in the English-speaking African countries seriously affected by structural adjustment programmes. This regional project is funded by Germany and is presently in its third phase. ILO activities implemented during the third phase (1995-97) consisted in providing advisory services at the national level (Egypt, Ethiopia and Uganda); implementing national and regional training courses (in association with the African Regional Labour Administration Centre, ARLAC); and establishing a model modern local employment services office in Harare. The major areas of ILO action were: (i) to sensitize participating countries to the principles of a modern and developed employment service and the possible role of public employment services in the revitalization of employment services; (ii) to provide guidance on how to reorient public employment services under structural adjustment; (iii) to develop a labour market information system and improve the performance of public employment services; (iv) to enhance the capacity of an established model public employment service office; and (v) to provide guidance on how to prepare and produce a career guide and vacancy bulletin. The major output of the project was a manual of practical guidelines for the establishment and development of public employment services in English-speaking Africa (published in December 1998).

40. The ILO's technical assistance in strengthening the capacity of public employment services is handicapped by funding constraints, the virtual lack of national resources to complement ILO efforts, and the poor quality of technical skills in most countries, which has been exacerbated by poor remuneration leading in turn to high staff turnover in labour administration.

(b) Employment-intensive works programme

41. The role of the ILO in combating the employment crisis -- through a variety of emergency employment and rehabilitation programmes and employment-intensive approaches to investment in infrastructure and construction -- has been acclaimed by the national authorities of countries where these activities have been implemented. The approach is well tested and evaluated and was strongly recommended by the Copenhagen Programme of Action adopted at the World Summit for Social Development.

42. The ILO's experience in this area, irrespective of the sources and causes of crises, shows that any severe negative effect on employment and income can be cushioned by rapid and well-designed public or non-governmental investment in works programmes. The countries in crisis that have sought assistance from the ILO for the creation of emergency employment include those facing a major natural disaster; those emerging from war and conflict; those whose economies fail to regain sustained growth in the aftermath of stabilization and adjustment programmes; and, more recently, countries that have suffered a dramatic downturn in growth and employment because of severe destabilization in their currency and capital and financial markets.

43. In November 1998 an Office paper was discussed focusing on the significance of this ILO activity for job creation; the evolving patterns of ILO programmes in this area with increasing emphasis being placed on the sustainability of job creation; the increasing involvement of ILO constituents and social dialogue in the design and implementation of programmes; and the potential to create wider impact through the integration of other programmes, notably various community-based cooperative activities, small and micro-enterprise development and vocational training. The paper also provided a number of examples of the above programmes, including direct impact assessment of selected interventions in various crisis situations.(10) 

Labour-intensive programmes in the current crisis in Asia

44. The establishment of the ASIST(11)  Asian and Pacific project in May 1998 with DANIDA support has been an important ILO response to the need to promote the wider and improved use of labour-based technology in the region where many millions of workers are in search of some form of income/employment entitlement, and where there is a serious need for improved infrastructure. In Thailand a general assessment of the job creation possibilities has been carried out and a training support programme has been initiated with the Ministry of the Interior's technical departments and the Social Fund Office of the Government Savings Bank. Both the Ministry of the Interior and the Savings Bank are responsible for implementing important components of the $480 million World Bank-supported Social Investment Programme, and both programmes involve extensive public works components. Through the ASIST programme local consultants have been engaged for special training programmes developed to support government technical staff in the design and execution of the labour-based components of these programmes, which are targeting the construction of 1,400 kms of bamboo-reinforced concrete village roads and a large number of irrigation rehabilitation projects in rural areas, as well as some 5,000 community-based programmes with emphasis on infrastructure works. The programme is initially expected to generate 1 million jobs.

45. In response to a request by the Government of Indonesia, the project has drawn up a programme of technical support for the labour-intensive padat karya programmes and to the labour-based programme of the Department of Public Works, responsible for an expanded programme of labour-based infrastructure works on roads, irrigation and human settlements. The current government budget for 1998-99, with support from the World Bank, targets the creation of 600 million work-days of employment. The ILO ASIST project is proposing a two-phase approach to the technical assistance needed for the public and community works programmes: the first phase consists in an assessment of the potential scope for the introduction of employment-based techniques into ongoing and planned public investment, leading to programme formulation and followed by a large-scale implementation and capacity-building phase. AusAID has agreed to fund the initial phase and the Government has approached the World Bank for additional financial support for the full phase of planned assistance. ASIST also participated in the World Bank mission (November 1998) for the IBRD Social Safety Net Adjustment Loan and has contributed to the design of the new programme components.

Employment-intensive investment policy in the CFA zone

46. In response to a resolution adopted by the Eighth African Regional Conference (Mauritius, January 1994), a Tripartite Meeting on the Socio-Economic Implications of the Devaluation of the CFA Franc, attended by the member States of the CFA Zone, was held in Dakar in October 1994.(12)  For the first time representatives of ministries of finance and planning were part of national tripartite delegations. This meeting examined in particular the implications of the devaluation for the formulation of employment, investment and enterprise development policies, and social protection issues in the context of devaluation. A follow-up meeting was convened in Yaoundé in April 1997.(13)  While most of the macroeconomic indicators showed signs of improvement, there had been no improvement on the employment front. The overall social situation, already difficult due to the impact of structural adjustment policies, had deteriorated further.

47. Follow-up activities by the ILO have focused on employment-intensive investment policy, as the use of labour has become much more "competitive" to equipment, most of which is imported, in the aftermath of devaluation. The meeting endorsed the ILO proposal to set up, within the ministries of planning or finance, a policy unit responsible for the promotion of labour-based investment approaches with the aim of orienting investment resources towards local labour and enterprises and other locally available resources. The ILO has also suggested that the steering committees of these policy units include tripartite representation, in line with Article 3 of the Employment Policy Convention, 1964 (No. 122). ILO constituents would thus be in a position to monitor concrete results in the fields of employment and labour policy; to assess the applicability of labour rules and regulations; to protect the right of association; to assist in the development of contract documentation more favourable to small labour-based contractors and to improving relevant working conditions; and to provide contractors and workers with training in subjects related to labour legislation and working conditions. Requests for ILO support in establishing such units have been received from several countries, including Senegal, Togo, Mali and non-CFA countries such as Guinea, Uganda and Madagascar.

Employment crisis induced by natural disaster

48. Natural disasters, though not economic in nature, sometimes create havoc in economies where the employment entitlements of the workforce are fragile and very little exists in the way of social safety nets or alternative forms of occupation. The adverse economic effects can have a long-lasting impact on employment and other social indicators.

49. The emergency employment situation in Central America caused by hurricane Mitch is most acute in Nicaragua and Honduras. This natural disaster has had tremendous human, social and economic consequences, compounded by the displacement of large numbers of migrants from these countries into Costa Rica. An exploratory mission undertaken by the ILO to these countries has assessed the possibilities of supporting rehabilitation and reconstruction processes as soon as the immediate humanitarian and emergency phase is over. Such support appears to be needed most in the fields of employment generation and local-level capacity building.

50. In Nicaragua, based on the mission's findings and recommendations actively endorsed by the Government and workers' and employers' associations, the ILO is to assist the UNDP in developing labour-intensive reconstruction programmes in some 25 municipalities in five departments. A specific consultancy mission was fielded in December 1998 in order to make initial proposals to introduce employment-intensive approaches into reconstruction programmes, to support small contractor development and to involve local communities with special attention to employment opportunities for women. These initiatives will be coordinated with an ongoing ILO training project and another project aimed at management training and improved access of small businesses to credit.

Crisis situations due to armed conflict

51. The ILO's employment-intensive approach to coping with crises in countries emerging from armed conflict is fairly widespread and duly recognized. There are several examples of relatively successful interventions through emergency employment-generating activities.

52. The assistance provided by the ILO in Cambodia is a good illustration of the contribution that it can make to rebuilding the economy in conflict-affected countries. Since 1992, in the context of the national Employment Generation Programme, ILO assistance has focused on three components:

53. Target groups include women, the rural poor, demobilized soldiers, returnees from refugee camps and internally displaced persons. Between 1993 and 1997, the principal achievements of the infrastructure component of the programme included:

54. Support is provided to the High-level Inter-Ministerial Task Force on Employment-intensive Infrastructure Works (created at the initiative of the ILO programme and comprising 12 ministries) for the use of local resource-based approaches to infrastructure development and rehabilitation. This is closely coordinated with the Ministry of Education for the planning, coordination and monitoring of vocational training; and the Association of Cambodian Local Economic Development Agencies for business counselling and training, credit provision and business opportunity identification.

55. Several economies of Central Africa are particularly affected by prolonged armed conflict. In 1996-97, the ILO provided input to the formulation of labour-based reconstruction programmes in Rwanda and the Democratic Republic of Congo, prepared in collaboration with the UNDP and currently being implemented by UNOPS. In December 1998, a meeting of several MDTs and the Turin Centre in Yaoundé reviewed issues and experience related to reintegration and reconstruction in a number of conflict-affected countries: Congo, Democratic Republic of Congo, Central African Republic, Chad, Rwanda and Burundi, and suggested that ILO activities should continue to provide support to these economies through coordinated activities on vocational training, self-employment, micro-enterprise development and labour-intensive works programmes.

(c) Social protection

56. The crises in recent years have clearly shown that countries with inadequate or inappropriately designed social protection systems tend to undergo greater social and economic instability, and face greater difficulties in weathering the adverse social outcomes of crises. It is evident in the crisis-affected countries of Asia that even rapid economic growth, though a necessary condition for the generation of employment and for raising standards of living, does not automatically guarantee equitable distribution or social protection. The near absence of a social security system in some of these hitherto fast-growing countries has exposed them to severe hardship, which could have been reduced had a built-in social protection system been introduced. A social protection system, in its broad elements, needs to be progressively introduced in the face of increasing job and income insecurity.(14) 

57. Following the collapse of their planned economies, countries in Central and Eastern Europe faced crises whose dimension was perhaps no less serious than that of the present crisis in South-East Asia. GDP contracted in some of these countries by almost 50 per cent in a short span of one to two years. These countries all had social protection systems in place, which continued to function in some fashion throughout the crises. Even if these systems were badly adjusted to the requirements and risks of market economies and were, or still are, in need of a substantial overhaul, they managed to provide some benefits to the populations even in the face of a virtual economic catastrophe. Imperfect as these measures may have been, they were able in most cases to prevent a social catastrophe and thus helped to stabilize the painful reform process. The lesson learned from the Central and Eastern European cases is twofold: first, there is no perfect social security in times of economic shock; secondly, having the delivery structure of functioning social protection system in place enables governments to react quickly and provide some form of protection even in severe economic crises.

58. In keeping with its commitment to the promotion of social justice and workers' protection, the ILO has been campaigning for and advocating the need for a broad-based social protection system and policies consistent with the social, economic and demographic parameters of individual countries. Policy advisory and technical cooperation assistance has been extended to several countries, as well as assistance on a range of social protection issues. A few specific illustrations of ILO assistance to crisis-affected countries are covered briefly (see box below). Developing the various elements of social protection systems is predicated on a number of activities, many of which require not only economic and legal policy decisions, but also concerted efforts of capacity- and institution-building.

A social security system in Thailand

59. The unemployment and poverty consequences of the economic crisis in Thailand is now well known. The social impact of this crisis has been compounded by two additional factors. First, it followed a period of sustained growth and economic optimism during which the modern sector of the economy developed. As a consequence of this and the associated social changes and population movements, there was some weakening of traditional family-based support systems. Secondly, Thailand, in common with most other countries in the area, had not progressed very far in establishing a social protection system that could offset the adverse social impact of the crisis.

60. Already towards the end of the last decade, the ILO assisted the Government in designing a strategy for the gradual introduction of a social security system that took account of the developing economy and administrative capacity. The Government decided to give initial priority to the establishment of a limited scheme which provided health insurance to formal sector workers, but not to their families, and also cash benefits in respect of invalidity, death and short-term incapacity for work on account of sickness and maternity. The legislation adopted in 1990 also provided for the eventual implementation of retirement pension and family benefits with effect from 1996 (although this has been delayed) and of an unemployment benefit scheme without a specified date for implementation.

61. Most recently, the ILO has been called upon to advise the Government on meeting the social impact of the crisis. The social protection system has been exposed as lacking both unemployment insurance, which could provide benefits to the involuntarily unemployed, and social assistance which could provide a safety net of minimum income to the poor. The feasibility study conducted by the ILO at the request of the Government considered various policy options for the introduction of an unemployment benefit scheme, and formulated cost estimates based on macroeconomic and labour market projections. It was concluded that the introduction of an unemployment insurance scheme was affordable, although the initially higher contribution rate combined with the increased contributions associated with the proposed introduction of the pensions scheme could cause some hardship if the scheme was introduced before 2001 while the impact of the crisis was still being felt.

62. The study concluded that if increased social protection were to be made available to unemployed workers, a system of unemployment insurance would seem to be the most appropriate. However, it was considered that implementation of an unemployment insurance benefit scheme should be linked to the establishment of more effective active labour market policies able to target benefit on those who were insured, who were involuntarily unemployed, registered as unemployed with the employment service and actively seeking work. The ILO awaits the Government's reaction to these recommendations and stands ready to support their implementation.
 

The Bulgarian currency crisis of 1996-97 and
ILO support to the social security system

Bulgaria's transition from a planned to a market economy required its social security system to be reoriented, and since 1993 the ILO has been involved in providing technical assistance through a UNDP-sponsored project. It has produced three substantial advisory documents on the issue. The ILO began assisting the Government with the National Social Security Institute's (NSSI) first budget in 1996. This entailed the development of a computer model for fulfilling NSSI's specific requirements. Follow-up activities for testing the model were however postponed because of delays in the national draft budget, which in turn was due to the currency crisis. The social fallout of the latter took on major dimensions in the winter of 1996-97. The project essentially had to be reoriented from "pure technical assistance" to catering to concrete short-term financial management advice.

The crisis started when, due to the slow pace of the reforms, short-term capital flows to Bulgaria started to dry up, which in turn led to Central Bank intervention in raising interest rates. Massive exchange-rate deterioration and inflation resulted (see Appendix II). Clearly this had constraining implications for the NSSI budget. In view of the slipping exchange rate, and at the behest of the IMF, a Currency Board Regime (CBR) was put in place. This in turn meant that the NSSI budget had to be revised to run on a surplus basis, irrespective of the budget considerations implied by the social security legislation. The proposed CBR changed the nature of the ILO project fundamentally. Three main tasks were now to be carried out simultaneously by the ILO: first, to align the 1997 draft budget estimates with the CBR requirements, taking into account the consecutive, and initially over-optimistic IMF-based macroeconomic frames; secondly, to simultaneously steer the NSSI cash flow through the period such that the social security legislation that was considered viable could be preserved; thirdly, the purchasing power of benefits paid out was to be protected against any rapid deterioration in prices. The ILO took advantage of its analytical instrument and in-depth knowledge of the NSSI financial situation and convinced the World Bank to postpone the implementation of some of the pension and other reform proposals to "better times". (15)   The result of the ILO's efforts is that not only has the NSSI budget been operating smoothly since mid-1997 in the CBR context, but viable social security legislation has also been preserved and is now the basis for future reform.

The Government of Bulgaria, subsequently asked the ILO in 1997, after the currency crisis was over, to provide assistance in two important fields of social policy:

    (a) an integrated training programme for the National Social Security Institute;
    (b) assistance in the formulation and implementation of anti-poverty policies and strategies.

One of the reports on (b) set out the methodologies required to identify and monitor poverty, presented an assessment of the current extent and profile of poverty and made recommendations relating to the establishment of a social assistance minimum and and for the administrative and financial management of future social benefits. It is likely to have a direct impact on the future shape of the NSSI budget. Both projects are currently ongoing.

63. The cases of Thailand and Bulgaria demonstrate that ad hoc crisis management is perhaps relatively easier in a situation where a social protection mechanism is in place, which might have to be adjusted to the crisis circumstances (for example in Bulgaria), while in a case like Thailand, with only a rudimentary scheme in place, new channels of benefit delivery are needed, which take time to develop.

Strengthening social protection in sub-Saharan Africa

64. While the severe poverty and employment crisis in the region must be addressed through general poverty alleviation and employment-generating programmes, there is an important role for social protection systems. These need to work within the current political and economic environment to ensure as far as possible that at least a minimum standard of living is provided for all, that there is access to adequate basic health care and social services, including food security, and that there are mechanisms for income security when people are no longer able to work.

65. In responding to the crisis in social protection provision in sub-Saharan Africa the ILO is pursuing a dual strategy: one dimension will focus specifically on the majority of the population excluded from social protection, and the other on improving the structure and administration of existing schemes and social security institutions. Many of those outside the scope of institutionalized social security schemes are working on their own account or are in irregular, casual or seasonal employment. Their income is also irregular and their perception of their social protection needs are often short term and concern the consequences of immediate risks such as ill health, injury or death rather than old-age pensions. Many communities and groups of workers in Africa have in the absence of social security coverage established their own associations in order to provide each other with mutual support both in relation to income-generating activities and social protection.

66. The ILO has established a special global programme -- Strategies and Tools against Social Exclusion and Poverty (STEP) -- which focuses on community-based schemes which provide social protection and social services to members on a mutual support basis, and on how this decentralized system can in the future be articulated with formal social protection systems. STEP strategy is based on the development of ILO expertise in this new and complex issue, built on a comprehensive survey of the major existing initiatives and on detailed case studies of field experience. The objective is to develop a concrete package of services (knowledge-based) to promote and strengthen such community-based schemes on a large scale. At the same time advocacy activities are launched, in particular for an active resource mobilization strategy. In Africa the initial focus of this programme has been on access to basic and emergency health care in rural communities in the United Republic of Tanzania and nine West African countries (Ghana, Nigeria, Guinea, Togo, Mali, Côte d'Ivoire, Burkina Faso, Senegal and Benin). The project, which is co-funded by the Government of Belgium, has linked with and is co-financed by other development agencies including USAID, GTZ, France, Switzerland, the Netherlands, UNDP, UNFPA and UNICEF, and has attracted additional donor support. Initial success in West Africa led to a special regional workshop in Abidjan in June 1998 to outline strategies to support the development of micro-insurance techniques for improved social protection. This resulted in a general endorsement of STEP strategies called the Abidjan Platform. Training manuals have been developed based on the West African experience and will be used in other parts of Africa with country-specific modifications to strengthen other community-based initiatives for providing health care and other social protection benefits. A special programme is being developed in collaboration with the Government of Portugal to extend the STEP principles to Portuguese-speaking Africa (five countries). A similar programme is being developed with USAID to cover East and southern Africa.

67. As regards institutionalized social security schemes, ILO technical cooperation has given special emphasis to sub-Saharan Africa. Comprehensive reviews of social security systems in a number of countries have been completed, including Madagascar, Gabon, Central African Republic, Togo, Benin, Kenya and Botswana, and ILO technical assistance has played a significant role in the introduction of new social security schemes in the United Republic of Tanzania, Namibia and Zambia. Particularly in French-speaking Africa, special emphasis has been placed on the problems that have beset the governance of social security schemes and which are common to many countries. At three separate meetings of social security institutions in French-speaking Africa in Dakar (1994), Abidjan (1996) and Yaoundé (1997) the countries of West and Central Africa have issued statements of principle with regard to social security reform. These declarations, endorsed by the institutions and by the social partners, provide a clear message to policy-makers. They correspond closely to ILO recommendations that although economic growth is essential for poverty alleviation and improved living standards, social protection systems are necessary to ensure that the vulnerable are able to benefit from development.

(d) Job creation through enterprise and cooperative development

68. In response to the alarming global economic and employment crisis, the ILO is being increasingly called upon by member States to support their efforts in expanding job creation, particularly through small and medium enterprise development. The ILO's programmes in this sector are fairly pervasive and expanding, and constitute for the ILO a critical instrument of support, whether given effect through policy advice, technical assistance, or both to the social partners in addressing the need for accelerating job creation, while increasing productivity and good working conditions. Irrespective of the nature and causes of crises and of the level of national development, job creation through enterprise development -- as vindicated by the increasing demands from diverse crisis-affected countries -- can continue to act as a crucial vehicle for economies in employment crisis. In practically all the tripartite ILO fora -- national, regional and international -- there is an unambiguous call for ILO support to enhance job creation prospects through enterprise development.(16) 

69. In response to the growing global unemployment crisis, in 1998 the ILO launched ISEP, the International Small Enterprise Programme. ISEP aims at consolidating and expanding ILO efforts promoting small enterprise development. It is also the main ILO vehicle to help member States apply the provisions of the recommendation concerning general conditions to stimulate job creation in small and medium-sized enterprises, adopted by the International Labour Conference in June 1998. ISEP is a comprehensive, integrated, high-impact and cost-effective programme specifically designed to help small enterprises unlock their job creation potential. It fosters an entrepreneurial spirit and helps small enterprises create more jobs and improve their quality and sustainability in an increasingly competitive environment. ISEP does so by addressing the numerous constraints that prevent small enterprises from achieving their full potential in a systematic and integrated manner. ISEP benefits those trying to escape the vicious circle of unemployment and poverty. The ultimate beneficiaries of the programme are the millions of existing and potential small entrepreneurs who are barely surviving. Among these, ISEP pays special attention to small enterprises headed by women in view of the gender-specific constraints they face. It is also developing special activities to assist retrenched workers in countries affected by the financial crisis.

70. To maximize its outreach ISEP operates through cooperation with local partners involved in small enterprise development. Government agencies, employers' and workers' organizations, chambers of commerce and associations of small enterprises and NGOs providing business support services are some of ISEP's partners. It pays special attention to the improvement of job quality in small enterprises, in line with international labour standards.

71. Job creation through the ILO's programmes of enterprise development has been successfully carried out in a large number of countries at various levels of development and suffering employment crises of varying severity.(17)  In Ecuador, at the request of the Government, a national small enterprise development programme was designed and presented at a workshop held in November 1998. The ILO is expected to be involved in the implementation of the plan. Similarly, despite the recent turnaround in the growth rates of some countries, the majority of sub-Saharan African countries face a serious employment crisis and poverty. In the context of the urgent need for employment creation and poverty alleviation, the ILO has assisted the Governments of Ethiopia, Kenya, Nigeria, Seychelles and Uganda to formulate employment policies by promoting micro, small and medium enterprises, improving their access to credit, building entrepreneurial capacity, and supporting the design of an enabling environment for the development of SMEs. In the case of Ethiopia, employment promotion through cooperative development has been fostered through ILO support for the unit in the Office of the Prime Minister responsible for cooperative development and the promotion of the regional affairs. Through ILO technical assistance and advisory services, a national workshop was held to review the role of cooperatives in a market-oriented economy and to sensitize policy-makers, planners, government and private institutions, donors and NGOs to the development of cooperatives in Ethiopia. A national Proclamation (policy) on Cooperative Development has since been enacted. Another ILO-sponsored workshop was held in Ethiopia to expose and sensitize government policy-makers, institutional heads, donors and NGOs to the importance of entrepreneurship development in technical, vocational and higher institutions. As a result of the workshop, the Ministry of Education is formulating a national policy for entrepreneurship development in technical and vocational institutions and universities.

Conflict-affected countries

72. Countries emerging from armed conflict face the task of reintegrating large numbers of returning refugees, internally displaced persons and ex-combatants. The only way to ensure the lasting reintegration of these groups and thus prevent conflict from recurring is to provide them with employment and income. Many government services have completely or partially ceased to function, while most conflict-affected countries are characterized by devastated social and productive infrastructure, stagnant or negative economic growth, and high levels of unemployment combined with high population growth. As many of these countries are often also implementing structural adjustment programmes, job opportunities in the public and formal sectors are extremely limited.

73. The ILO has over the last few years supported technical cooperation programmes in a number of countries which show that it is possible to overcome existing constraints and generate employment in such difficult circumstances. One way this can be done is to create local mechanisms to facilitate economic initiatives to promote and support small enterprises and cooperatives: in Central America the ILO participated in PRODERE, a multidisciplinary, multi-agency UN programme for displaced persons, refugees and returnees funded by the Government of Italy and implemented between 1990 and 1995 as part of the international community's efforts to consolidate the peace process in Central America. Within this framework the ILO was responsible for the promotion of Local Economic Development Agencies (LEDAs), which helped build a consensus at the local level around economic objectives among parties which had often been at opposing sides during the conflict, by bringing together all those with a stake in the local economy to help identify business opportunities and organize small enterprises and cooperatives to exploit these opportunities. Stakeholders included local representatives of the relevant government agencies, employers' and workers' organizations, private enterprises, UN agencies, other international organizations, NGOs and churches present at the local event.

74. Following the signature of the peace agreement in October 1992, Mozambique was faced with the enormous task of reintegrating 100,000 demobilized soldiers, 1.7 million refugees from neighbouring countries and 4 million internally displaced persons in an economy devastated by 16 years of civil war. Because of their importance in the consolidation of the peace process and national stability, demobilized soldiers were given priority in the reintegration process and the ILO was requested to design a targeted skills and entrepreneurship training project. The project was implemented by the Ministry of Labour between 1994 and 1998. It combined accelerated vocational training, the provision of tool kits and basic business skills training to make it easier for demobilized soldiers with viable business ideas to start their own enterprises by assisting them in the preparation of a business plan and facilitating their access to micro-credit schemes. Not only did the project train some 10,000 demobilized soldiers, of which over 70 per cent became (self-) employed in a sector related to their training, but it also succeeded in establishing technical capacity in the Ministry of Labour to apply the project methodology on a wider scale to other target groups.

Self-employment in industrialized countries

75. In response to the serious long-term unemployment problem faced by many industrialized countries, the ILO is currently undertaking an action programme on enterprise creation by the unemployed through micro-finance in industrialized countries. It takes stock of and evaluates the performance of self-employment programmes in the United States, Canada, the United Kingdom, Ireland, France, Germany and the Netherlands, looking at such issues as business survival factors, displacement effects, the performance of public-private partnerships, the quality of self-employment (income, working time, working conditions, etc.) and funding arrangements for business start-ups and longer-term prospects. In each country a steering group composed of key stakeholders such as the government agencies concerned, social partners, banks, micro-finance programmes and research institutes sets the agenda for activities at the national level, with the ILO acting as facilitator. The lessons learned will be used to advise on self-employment legislation and policies.

76. The action programme has attracted substantial interest from a wide range of private and public agencies and organizations, including well-known foundations and other international organizations such as the OECD, who are willing to share the cost of the surveys, investigations and meetings to be undertaken. Although it is premature to say what impact the action programme will have on self-employment and micro-finance programmes in industrialized countries, this positive response by a wide variety of organizations and agencies has made it evident that the action programme is meeting a real demand and that the ILO is well placed to play a facilitating and catalytic role in industrialized countries.

Cooperatives and crisis-coping

77. Cooperatives have over the years proven their effectiveness in generating employment and income for large numbers of people. They are key players in certain sectors of industrialized economies, such as agricultural marketing, consumer retailing and banking. At a time when public enterprises are being privatized and restructured and the role of the State in economic life is diminishing, cooperative enterprises, especially in agriculture and agro-industry, are well placed to provide sustainable employment for those who otherwise risk becoming redundant. The ILO is therefore intensifying its efforts to help member States fully exploit the employment creation potential of cooperatives. Cooperatives are not only employers in their own right (more than 5 million people are directly employed by cooperatives in Europe) but, more importantly, they provide an appropriate organizational framework for productive self-employment (some hundred million people are members of workers' cooperatives worldwide) by enabling individuals to pool resources, skills and knowledge. Moreover, cooperatives help consolidate existing employment opportunities, particularly in rural areas and the informal sector, by providing individual producers with appropriate pre- and post-production services, including finance. Cooperative small enterprise networks are also excellent tools to strengthen such enterprises and thus optimize their employment potential.

78. Based on its comprehensive research into the issue of job creation by cooperatives, the ILO is advising governments through its COOPREFORM programme in formulating appropriate cooperative development policies and cooperative legislation that provide a favourable climate for the creation and growth of autonomous cooperatives which can function as economically viable private sector enterprises. It also provides technical assistance to promote employment generation in cooperatives through such programmes as ACOPAM, a programme that has created and consolidated tens of thousands of jobs in the Sahel region of Africa, INTERCOOP, an interregional programme that creates jobs through the establishment of trade relations between cooperatives in the South and the North, and Jobs for Africa, whose cooperative component intends to create 8,000 and consolidate a further 16,000 jobs through the promotion of non-conventional types of cooperatives in ten African countries. In providing this support the ILO collaborates with a large number of development partners such as the International Cooperative Alliance, national cooperative movements, the UN system, the World Bank and bilateral donors.

(e) Economic crisis and the gender dimension

79. There is ample evidence to suggest that during economic downturns women are far more adversely affected than men. This emphasizes the vulnerable position of women in the job market owing to a number of factors including the economic, legal and institutional frameworks of societies. While removal of gender discrimination would require comprehensive countervailing policies and measures -- which the ILO is currently pursuing under its International Programme on More and Better Jobs for Women -- specific targeted policies and action programmes are required to offset the employment and income losses of women and to improve their access to social insurance and social safety nets. The various ILO activities cited above include specific elements to incorporate support for women's employment: in the ILO's emergency employment campaign in Cambodia, 43 per cent of the recorded 2.7 million work-days of employment generated were for women. In addition to attempts to incorporate the gender dimension in various activities, the ILO has undertaken specific targeted actions to mitigate the adverse effects of women in crisis situations, described in the following section.

Promotion of women's employment in the context
of structural adjustment and economic reform

80. In the 1980s and through the 1990s, many developing countries adopted stabilization measures and structural adjustment programmes, and only in the late 1980s did the social costs of adjustment and the particular vulnerability of certain groups of the population begin to be recognized. Even then the vulnerability of women was related to their reproductive and maintenance roles within the family, which suffered, for example, from reduced spending on health and education. The needs of women as workers and producers were overlooked. Structural adjustment is a matter of resource mobility and the way with which people and resources shift in response to signals and incentives given by reform policies. This capacity to shift from contracting trades and sectors to growth sectors determines the depth and distribution of costs and benefits to different groups of people. Yet, because of gender differences in control over and access to productive resources (including education, skills, land and capital), men and women possess different capacities and receive different incentives.

81. In close consultation with social partners, NGOs and academia, the ILO has launched a multi-country programme which has so far been implemented in Sri Lanka, India, the United Republic of Tanzania, Zimbabwe and Côte d'Ivoire, and plans are currently under way for implementation in Egypt. DANIDA, CIDA and the Government of the Netherlands have provided additional financial support towards the ILO's regular budget resources for the implementation of this programme.

82. Depending on the socio-economic context and specific priorities at the country level, three kinds of activities have been implemented: initiating and institutionalizing tripartite social dialogue through the organization of national workshops and fora, followed by the establishment of national task forces or networks to pursue the dialogue initiated and to implement the priority activities identified. In almost all countries these workshops were the first occasion that policy issues dealing with the interaction between gender, employment and economic reform had been tackled at a national level. The workshops and task forces have brought together a broad spectrum of government agencies, workers' and employers' organizations, women's associations, researchers, academics and local structures. They have made it possible to confront the gender-specific employment effects of economic reforms in the urban informal sector, the formal, private and public sectors, and the rural-agricultural sector, and to articulate their needs and perspectives. In the United Republic of Tanzania, the Task Force on Gender Issues in the World of Work was officially recognized by the Ministry of Labour and Youth Development in January 1998 as the national forum for gender, employment and labour issues.

83. Adopting a priority plan of action. In India, Sri Lanka, the United Republic of Tanzania, Zimbabwe and Côte d'Ivoire, the policy workshops resulted in the adoption of action plans, identifying priority areas for research and data collection, legislative reforms, employment promotion in specific sectors and social protection measures. Follow-up action plans have been assisted and completed in India and are ongoing in Sri Lanka, the United Republic of Tanzania and Zimbabwe. Memoranda of Understanding between the ILO (as in DANIDA-funded activities) and the governments have been signed, providing the operational framework for follow-up action plans. In the United Republic of Tanzania and Zimbabwe, where labour laws are being reviewed and modified, the Task Forces have assigned top priority to the completion of their review of the gender aspects of existing and proposed legislation which affect employment. In both countries the assessment of the distinct needs of women in the urban informal sector and development of their earning capacity figure prominently in the action plans.

84. Data collection and dissemination. Lack of accurate data on the impact of economic reforms on specific sectors of the population has been a major bottleneck in developing appropriate policy responses. The collection of information and data and undertaking specific studies were thus important elements of the programme, involving numerous statistical researchers and research institutes, as well as government statistical offices. The information collected was used in the workshops to identify priority issues and action plans and disseminated through the networks and task forces.

Social safety nets, employment promotion and
poverty reduction

85. Since 1996 activities have been undertaken within the scope of both an ILO Action Programme in 1996-97 (Economic reforms and structural change: Promoting women's employment and participation in social funds), and an ongoing technical cooperation project with DANIDA funding. Social safety nets and social funds (a new generation of social safety nets from the 1980s) have rapidly developed in Latin America, Africa, Asia and Eastern and Central Europe and more recently due to the Asian crisis, and are regaining prominence as a policy instrument to mitigate the negative social consequences of economic crises, adjustment and transition. There continues to be a great deal of debate on the ultimate focus of such programmes, which range from short-term, palliative emergency measures to structural poverty eradication. Policy debate on social funds and social compensatory schemes has however failed to address two essential issues from the ILO perspective: the role and performance of employment promotion and gender equality.

86. A series of in-depth case studies of the gender dimensions of social funds and other social safety nets was carried out covering experience in Bolivia, Honduras, Mexico, Peru, Egypt, Madagascar and Zambia. This evaluation pointed out several shortcomings of social safety nets, the limited role of employment promotion schemes within social funds' investment portfolios and the limited outreach to women, especially of employment promotion schemes. The dialogue has resulted in the attribution of higher priority to the integration of a gender dimension in the new generation of social funds. Guidelines developed as a result of the in-depth assessments have provided the ground for further dialogue at the national level and with the international community, the World Bank and regional banks, on the appropriate design of social safety nets. Most recently, for example, these have been used as input to a World Bank review mission to Indonesia in October 1997, and to ILO initiatives in Thailand aimed at building up national capacity in developing social safety nets. Further activities are planned to enhance women's access to social safety nets in Asia and strengthen the gender and dimension of selected social funds in the area of employment.

Homeworkers in the global economy: The Asian crisis

87. Homeworkers are among the more vulnerable segments of the workforce, as they are generally outside the scope of protective labour legislation and social security systems. They have precarious income sources. They wield little bargaining power vis-à-vis contractors and their principals and agents, and because they often perform their work within the confines of their homes and are socially invisible and unorganized. In the global economy, the incidence and spread of home work as a form of production and employment relationship has become marked as homeworkers form part of the global decentralized production system. The current crisis in Asia has highlighted the vulnerability of homeworkers, particularly those linked to international trade and to downturns in the global economy.

88. Technical cooperation activities on home work, beginning with initial work in India with beedi-rollers, papad-rollers, sari-embroiderers, etc., and continuing in Thailand, the Philippines and Indonesia, have developed a multi-pronged approach aimed at both enhancing homeworkers' employment and incomes and expanding their access to social protection. The approach involves four types of action, with variations in scope and form depending on the socio-economic context of each country: (i) building up organizations and networks of homeworkers and strengthening their negotiating power, thus enabling them to bargain for better terms of employment as well as undertake activities to improve their incomes; (ii) enhancing their income-earning capacity through skills training, entrepreneurship development, marketing assistance and productivity improvement; (iii) widening their access to social protection through legislative reform, legal literacy and membership of social insurance programmes and group-based non-conventional social insurance schemes; and (iv) giving visibility to home work through research, policy dialogue and better data collection and dissemination on home work.

89. These activities have led to the implementation of structures and mechanisms that are valuable today in the current crisis. Homeworkers' groups and networks of national government and non-governmental institutions formed to assist homeworkers are actively seeking and providing collective responses to the effects of the crisis. Further efforts must be devoted to strengthening homeworkers' organizations and to elaborating measures to upgrade homeworkers' social insurance and social safety nets to a sustainable level. In close consultation with national partners, new activities to respond to the needs of homeworkers in the context of the present crisis in Indonesia, the Philippines and Thailand are being formulated and will be launched in 1999.

V. Impact assessment and monitoring

90. While the ILO activities discussed above offer direct responses to requests from constituents to address particular crisis situations, it is difficult and often impractical to assess their relative impact on the overall crisis being experienced by any one country. The direct impact of specific activities has already been cited (see Appendix III for an evaluation of the ILO's employment-intensive programme, EIP). The scale and nature of activities tend to define their potential impact: the rehabilitation of ex-combatants in Mozambique through enterprise and cooperative development achieved a substantial impact, although certainly inadequate within the overall perspective of Mozambique's rehabilitation needs. It should be emphasized that the full impact of an individual activity on employment cannot be ascertained simply from its direct results. There are linkages and synergies as well as the impact of demonstration effects and the catalytic role of the activity.

91. In a situation of pervasive crisis, it is important to undertake a concerted and coordinated approach to bring about a visible and lasting impact. The operations would need to combine substantive interrelated activities, such as employment-intensive infrastructure building, the promotion of small enterprises, the establishment of local economic development agencies and vocational training and skills development. The coordinated role of the ILO in Cambodia's recovery and reconstruction process has been fully recognized by national and international authorities. Such coordinated approaches, compared to isolated and ad hoc projects, are likely to attract more technical cooperation funding in the future. Another example of a coordinated approach was in the Republic of Congo.

92. At the request of the UNDP's Resident Representative and Coordinator for Humanitarian Affairs, an inter-agency mission was led by the ILO in November 1998 to formulate a strategy and priority actions for the integration of the youth of the Congo, which experienced two relatively short but very intensive and violent civil wars in 1993 and 1997.

93. Reintegration possibilities through a coordinated framework of vocational training, apprenticeship, micro and SME development and employment-intensive works were discussed with the ILO's social partners and relevant ministries. The outcome of the mission was the Programme for Social and Economic Reintegration of Youth, which has seven technical components: (i) education for all to re-establish peace; (ii) culture, leisure and communication; (iii) vocational training and apprenticeship; (iv) promotion of micro and small enterprises; (v) credit for micro, small and medium enterprises; (vi) rehabilitation of infrastructure; (vii) health and social protection. Other conflict-affected countries in Central Africa have requested the ILO for similar assistance, including the Democratic Republic of Congo and Burundi. The social and economic reintegration of young people -- in conflict-affected countries or otherwise -- requires a multisectoral approach and offers an opportunity for the ILO to enhance its role in inter-agency cooperation.

94. The ILO often responds to requests from constituents in terms of policy advice, the true impact of which is often difficult to measure. The implementation of policy recommendations rests with the governments concerned. However, the ILO would need to monitor more closely the follow-up on the policy advice given. There is also a need to review follow-up on activities carried out to ensure the continuation of projects and activities where necessary beyond their termination. The Office is taking steps to ensure close monitoring and impact evaluation, and hence the more effective delivery of services.(18) 

95. Activities directed towards employment promotion and protection, even if urgently undertaken, often involve slow and difficult processes of design, formulation and the development of capacities and institutions. Furthermore, in order to meet the objectives effectively, the activities must address the conditions under which the objectives are best carried out. For instance, employment promotion is contingent upon sustained economic growth and rising productivity; employability is influenced by a host of factors, including skill upgrading and diversification; employment protection and security is dependent on the institutions and mechanisms of social protection in the individual countries. While the ILO continues to address the problem of the employment and income entitlements of workers severely affected during crises through its immediate employment measures, several other ILO activities focus on durable capability enhancement of the workforce through the promotion of increased productivity, skills upgrading, social protection and institution-building.

96. The responses and activities of the ILO cited above have been carried out in consultation with the social partners. The ILO has actively promoted continuous dialogue between the social partners on potentially conflicting issues and on measures concerning follow-up on a particular crisis: subregional projects(19)  are being implemented in Africa and Asia to promote social dialogue by strengthening tripartite consultative institutions and by enhancing the capacities of the social partners to play an active role in tripartite consultations on national economic and social policies. Promoting social dialogue at a very early stage of the reconstruction process has proved an extremely valuable ILO contribution to countries emerging from conflict. Part of the strategy is the development of particular training schemes in labour law and labour relations, especially in countries in transition towards democracy. These schemes aim at promoting democracy at the workplace through worker and employer sensitization to non-discrimination principles and through the prevention and resolution of disputes. An interesting example of such activities is the ILO/Switzerland project on the prevention and resolution of conflict and promotion of workplace democracy in South Africa and the ILO/Switzerland pilot project to promote industrial relations, peace and stability in southern Africa. Similarly, the ILO's Action Programme on Structural Adjustment, Employment and the Role of the Social Partners is designed to facilitate the participation of workers' and employers' organizations in the design and implementation of adjustment policies that would minimize the negative effects of economic reforms.

97. The economic and employment crisis in several Asian countries is already threatening to spread to other parts of the world. It has provided the ILO with the opportunity to carefully review its responses within broader, coordinated perspectives, liaising closely with national counterparts to define its "package" of activities and a time-differentiated implementation plan within the national policy framework. The Committee may wish to note that the large number of activities undertaken by the ILO in the context of three crisis-affected Asian countries are detailed in an Office paper submitted for discussions at a Symposium during the present session of the Governing Body. These discussions are expected to provide further guidance on the future role of the ILO in countries in crisis.(20) 

98. Apart from the direct responses and activities, the ILO is playing its part as the lead agency in the field of employment in various joint activities in collaboration with international financial institutions and other UN agencies. Many of the financial institutions have undertaken to establish social funds and various social sector activities, and the ILO is being invited to participate as an active partner in the World Bank and Asian Development Bank's social sector lending in Thailand. Furthermore, the ILO is increasingly being called upon to contribute and discuss its perspectives on issues related to coping with crises and to establish rules-based global governance. At such fora, whether of the G7 countries or the Bretton Woods institutions, the ILO has persistently emphasized the need to ensure the centrality of employment in policy formulation; the need to build a social consensus on such policy-making; and to extend progressively social protection systems to safeguard basic workers' rights.

VI. The future role of the ILO

99. It is clear that the ILO has a distinctive role to play in mitigating the adverse social effects of the global economic crisis. The ILO's activities will be all the more in demand given that economic prospects in many member States are uncertain, especially under the high contagion risks created by the financial crises in a number of significantly large economies. Moreover, with the unfolding of the Asian crisis and its pervasive social concerns, a fuller and more comprehensive assessment of the crisis and of the ILO's activities is called for.

100. The current economic crisis provides renewed assurances and support for ILO principles and policies on enhancing social justice and the democratization of societies. As the world enters the twenty-first century with a clear call for increased democracy and the upholding of fundamental human rights, the ILO's principles and policies provide a well-defined framework for integrating economic and social progress. Among the international organizations, the ILO has a unique advantage in being not only the common forum of business and labour, but also in the setting and supervision of labour standards to promote economic and social progress and to guard against social retrogression. In a period of increasing human insecurity and potential conflict among the players, which are visibly accentuated during crises, providing respect for the ILO's core labour standards as endorsed by the Copenhagen Declaration of the Social Summit and the ILO Declaration of 1998 on Fundamental Principles and Rights at Work would provide guidelines on economic advancement and avoiding social crises.

101. The extent to which the ILO can be involved in speeding recovery from a crisis and in lessening the risk of repetition of a crisis depends largely on how the causes of a crisis first occurring and then continuing are interpreted. Crises can often arise as a result of policy errors in areas that are clearly beyond the ILO's competence, but there is no doubt that the effective application of the principles and policies that the ILO espouses, such as transparency in policy-making, tripartite dialogue and appropriate levels of social protection, can play a significant part either in avoiding crises or in shortening their duration.

102. Within these principles and in full consultation with the social partners, ILO activities would need to be articulated within an integrated national policy framework towards crisis management and economic and social recovery. Such a policy framework would mean accommodating social and labour policies, agreement on which can be attained through the persistent promotion of tripartism and the strengthening of workers' and employers' organizations. Such social contracts can provide strong impetus to create the environment necessary to ensure the speedy recovery of economies in crisis.

103. Progress towards social justice, freedom and security cannot be appropriately ensured on a sustainable basis without economic growth and recovery. Productive employment cannot be generated without sustained growth and increased productivity and competitiveness in terms of skills. The ILO's technical expertise needs to be fully geared towards supporting the social partners in the design and implementation of policies to enhance job creation through enterprise development, to promote the quality of jobs, to seriously address the informal sector by enhancing its productivity and working conditions and to upgrade skills and employability. Such activities will need to incorporate and reflect fully the ILO's concerns on women's employment and gender discrimination.

104. The Active Partnership Policy (APP) has been set up to define individual countries' needs for ILO advice and technical assistance. The APP could thus be used as a vehicle for the ILO to exchange views on issues and assessments of the crisis itself and on the broad thrust of the policies which governments and social partners consider require the support of the ILO. The range and priorities of ILO activities would then be worked out more fully within the resource and capacity constraints of the Organization. This may call for special missions to crisis-affected countries and charting the course of ILO action in a more coordinated way, in full consultation with the social partners. In terms of technical cooperation, future activities, if designed within a coordinated framework and packaged as a possible high-impact strategy, are likely to have a higher probability of attracting external resources, thereby producing better and more visible results.

105. The resource and capacity constraints of the ILO would largely determine the extent and efficiency of the activities designed and undertaken. Greater demand and requests for the ILO's services would not only require greater resources, but would also call for a review of the technical and institutional capacity to deliver. When asked to recount their responses to crisis situations in their respective regions, most of the ILO's field units emphasized the inadequacy of resources and often the absence of specialists in the region.

106. The recent experience of the ILO in countries experiencing severe social crisis suggests that there is a growing invitation to the ILO from multilateral agencies, the international financial institutions and the donor community to share its expertise in mitigating the adverse social effects of crises. While the ILO has been participating in such activities, the Committee may note that they largely relate to the reduction of the adverse social impact of crises. The ILO needs to pursue closer dialogue with the Bretton Woods institutions not only in areas of crisis mitigation, but also in insisting on the recognition of its concerns in the design of growth policies so that they benefit employment, wages and income. In order to give effect to the commitment of member States on full employment under the Copenhagen Declaration, and as endorsed by the Declaration of Philadelphia, the ILO will need to participate increasingly in supporting its constituents in the design of employment-friendly growth strategies. This view was again reaffirmed at the ILO's tripartite Sixth Biennial Employment Planners' Meeting, held in Abidjan in February 1999.

107. The recent crisis has clearly vindicated the view that, alongside economic growth and competitiveness, there is an urgent need for societies to define and institute systems and mechanisms of social protection -- irrespective of their level of development -- and avoid or reduce the social catastrophe now being witnessed in the crisis-afflicted Asian countries. More significantly, these social disasters have occurred in countries which were being referred to as examples of miracle growth. Growth is certainly necessary for income and employment generation, and individual prosperity. However, unless the social foundations of growth are well laid and social protection systems are well defined, the suffering can be enormous. As a result, social consensus may break down, income distribution may worsen and recovery be much delayed. The ILO will continue to advance this fundamental concern through its campaign for basic human rights, as well as through its policy advisory and technical assistance services.

108. The Committee may wish to discuss the experience so far of the ILO in responding to the global economic crisis and the activities and measures it has undertaken to support its member States and social partners in their efforts to cope with the crisis. Further, the Committee may wish to specify issues and provide guidance on the future role of the ILO in crisis-affected countries.

Geneva, 23 February 1999.

1. See E. Lee: The Asian financial crisis: The challenge for social policy, ILO, Geneva, 1998.

2. GB.274/4/1; GB.274/4/2; GB.274/4/3.

3. See ILO: Jobs for Africa: A policy framework for an employment-intensive growth strategy, Geneva, 1997.

4. ILO: Economic restructuring and the world of work, Part I, Director-General's Report, 13th Conference of American States, 1992; ILO: Employment policies in economic restructuring of Latin America and the Caribbean, Geneva, 1991; ILO: Report of the Director-General, Eleventh Asian Regional Conference, Geneva, 1991; ILO: The challenge of adjustment in Africa, Geneva, 1989.

5. See C. Evans-Klock et al.: "Worker displacement: Public policy and labour-management initiatives in selected OECD countries", Employment and Training Papers, No. 24, ILO, 1998.

6. See The social impact of the Asian financial crisis: Technical report for discussion at the High-Level Tripartite Meeting on Social Responses to the Financial Crisis in East and South-East Asian Countries (Bangkok, 22-24 April 1998), ILO, March 1999 (http://www.ilo.org/public/english/60empfor/cdart/bangkok/index.htm). The Government and social partners are closely involved in the design and implementation of these activities.

7. Employment and Training Paper No. 24, Apr. 1998.

8. See GB.274/ESP/5; and P. Auer: "Europe's employment revival: Four small European countries compared", paper submitted to an ILO Symposium on Social Dialogue and Employment Success, 2-3 March 1999, Geneva.

9. For recent initiatives concerning the promotion of active labour market policies and the strengthening of public employment services in the crisis-affected countries of Asia, see GB.274/4/3.

10. GB.273/ESP/4/1.

11. Advisory Support, Information Services and Training for Labour-based Infrastructure Programmes.

12. GB.261/ESP/4 and GB.261/6/28.

13. GB.269/5.

14. See E. Lee, op. cit. (1998), for a more detailed treatment of the rationale for and design of social protection policies.

15. In fact, most differences between the ILO and the World Bank at that time were not over the contents of or need to reform the Bulgarian pension system, but mainly on the timing and sequencing.

16. See for example the Conclusions of the Committee on Employment Policies at the International Labour Conference in 1996, and more recently the tripartite Report of Common Understanding reached at the Asian Regional Consultation concerning Follow-up on the World Summit for Social Development (Bangkok, 13-15 January 1999).

17. Several examples are cited in GB.273/ESP/4/2; for an assessment of the activities on enterprise creation, currently under way in the Asian crisis economies, see GB paper prepared for the GB Symposium in March 1999.

18. GB.273/TC/1.

19. These projects are: ILO/Norway project for the promotion of tripartism and social dialogue in national policies in southern African countries; ILO/Belgium project to promote social dialogue in French-speaking Africa (PRODIAF); ILO/Norway project on the promotion of tripartism and sound labour relations in Asia.

20. See Appendix I for the range of activities undertaken by the ILO in the context of the economic crisis in Thailand. See also GB.274/4/3.

Appendix I

Major activities carried out in response to the
economic crisis in Thailand

Regional activities

National activities

Appendix II

Bulgaria: Monthly exchange rate and development
of the consumer price index (CPI), 1996-97

Exchange rate measured as Leva per US$: shadowed columns; CPI: black columns. Both rates calculated as per cent change over previous month's value.

Source: ILO-ECO (Directory Bulgaria, 1998).

Appendix III

The ILO's Employment-Intensive Programme (EIP):
An independent evaluation

An independent evaluation was carried out in 1997 of the ILO's Employment Intensive Programme (EIP), which has been under way since the early 1970s. The objectives of the EIP are to strengthen the capacity of member States to design and implement employment-intensive infrastructure programmes that reduce poverty on a sustainable basis through economically sound job-creation programmes, especially in rural areas.

The programme follows a strategy with three levels of action:

The evaluation found that thorough experience at the micro-economic level had given the ILO technical competence, credibility and visibility in the area of labour-based techniques. The evaluation concluded that the ILO had a major comparative advantage for labour-based contracting compared with bilateral donors, who may wish to promote their own equipment and techniques, and multilateral donors, who do not have the necessary technical skills or experience within their own resources and are reluctant to use outsiders. The terms "labour-intensive" and "employment-intensive" mean that labour was used under any circumstances to replace machines. The term "labour-based" -- the EIP's current strategy -- means that an optimum mix of labour and machines was used to suit local conditions. The type of labour-based technique varied from country to country. EIP was therefore flexible in practice.

Labour-based techniques are still not widely known, or are viewed by many as backward. Evidence showed that they might be both effective and efficient in certain situations. The cost-effectiveness of the EIP has been proven and documented: labour-based methods create three to five times more employment and use 60 per cent less foreign exchange than equipment-based approaches. The weakness of many member States (especially in sub-Saharan Africa and South Asia) in terms of competent and motivated staff hindered capacity development. On the other hand, other States had firmly embedded the design and implementation of the EIP within the government structure.

The organization of the EIP, especially the location of ASIST (Advisory Support Information Services and Training for Asia and the Pacific) and ACTIF (subregional EIP projects) in the overall ILO support structure has to be clarified.

The sustainability of created employment and constructed infrastructure is increasingly being addressed by the EIP, with some measure of success. This is important, since governments where the EIP is based seem to have given low priority to the maintenance of infrastructure, which is essential to ensure lasting effects.

The evaluation recommended that the ILO formulate an overall employment-creation strategy that the EIP could integrate and which would give clear priorities to programme managers. Better communication on the EIP and its experience with labour-based techniques within and outside the ILO should be established, and the EIP should find a way to foster the active involvement of the ILO's social partners in the programme. The EIP needs to measure its impact by developing simple, measurable and manageable indicators of achievement at the micro, meso and macro levels. The report specified that the programme's evaluation and documentation unit should be re-established.

The most important lesson learned from the evaluation exercise was that the EIP should continue to link ground-level activities with macro-level advice to demonstrate that concentrated action at all levels is necessary and should be well founded. Attention should also be paid to the maintenance of infrastructure to ensure sustainability.

Appendix IV

Table 1. Rates of unemployment worldwide
 

Unemployment rates

Percentage growth in numbers unemployed

 

 

 

1987

1993

1997

1987-97

1993-97

Developed countries

7.6

8.0

7.3

0.7

1.6

Europe

10.4

10.6

10.5

1.1

0.01

Japan

2.8

2.5

3.4

2.9

8.5

United States

6.2

6.9

4.9

1.0

6.8

Other developed countries (Australia, Canada, New Zealand)

8.3

11.0

8.8

2.0

4.1

Latin America and the Caribbean

5.7

a

-

7.4

7.3

b

-

China

2.0

2.6

3.0

c

-

-

India

3.8

2.3

-

-

-

Other countries in Asia

4.3

4.4

4.2

1.6

0.8

Central and Eastern Europe and Russian Federation

-

7.2

9.6

d

-

9.1 e

a 1990. b 1990-97. c 1996. d 1996. e 1993-96.
Source: ILO: Yearbook of Labour Statistics 1997 (Geneva, 1997) and Informa: Panorama laboral '97 (Lima, 1997); OECD: Employment Outlook 1998 (Paris, 1998) and OECD: Labour Force Statistics (Paris, 1997). Calculations are based on labour force surveys (developed countries, other countries in Asia, Central and Eastern Europe), household surveys and official data (Latin America and the Caribbean) or national sources (China, India). No comprehensive data for Africa are available.

Appendix V

Table 2. Growth rates of employment and labour force (percentages)
 

Employment

Labour force

 

 

1987-97

1993-97

1987-97

1993-97

Developed countries

1.1

1.0

1.1

0.8

    Europe

0.9

0.4

0.9

0.3

    Japan

1.0

0.4

1.1

0.6

    United States

1.4

1.9

1.3

1.3

    Other developed countries
    (Australia, Canada, New Zealand)

1.3

2.0

1.4

1.4

    Latin America and the Caribbean

2.9
(1990-97)

-

3.2
(1990-97)

-

China

2.2
(1990-94)

-

1.5
(1987-96)

1.1
(1993-96)

India

2.4
(1987-93)

-

2.2
(1987-93)

-

Other countries in Asia

2.0
(1990-96)

2.4
(1993-96)

1.9
(1990-96)

2.3
(1993-96)

Central and Eastern Europe

-

1.8
(1993-96)

-

0.9
(1993-96)

Source: ILO: Yearbook of Labour Statistics 1997 (Geneva, 1997) and Informa: Panorama laboral '97 (Lima, 1997); OECD: Employment Outlook (Paris, 1998) and OECD: Labour Force Statistics (Paris, 1997). Calculations are based on labour force surveys (developed countries, other countries in Asia, Central and Eastern Europe), household surveys and official data (Latin America and the Caribbean) or national sources (China, India). No comprehensive data for Africa are available.

 

Table 3. Revisions to world growth projections
(per cent change in world real GDP)
 

World Economic Outlook Issue (IMF)

1997

1998

1999

2000

October 1997

4.2

4.3

4.4

4.6

December 1997

4.1

3.5

4.1

4.4

May 1998

4.1

3.1

3.7

3.8

October 1998

4.1

2.0

2.5

3.7

December 1998

4.2

2.2

2.2

3.5

Appendix VI

Table 4. GDP annual growth (per cent) compared to
GDP for 1987 (at constant prices and exchange rates)
 

1997

1998 (F)

1999 (F)

2000 (F)

 

 

 

WB

IMF

WB

IMF

WB

IMF

WB

IMF

1. Thailand

0.4

0.4

7.0

8.0

0.3

1.0

2.6

2. Rep. of Korea

5.5

5.5

6.5

7.0

1.0

1.0

3.5

3. Indonesia

4.6

4.6

15.3

15.3

2.8

3.4

2.3

4. Malaysia

7.9

7.7

5.1

7.5

0.5

2.0

4.2

5. Philippines

5.2

5.2

0.5

0.2

2.5

2.5

4.4

    1, 3, 4 and 5 (ASEAN)

3.7

10.6

1.4

    1-5 (all)

4.5

8.0

0.1

3.2

6. Japan

0.9

1.4

2.5

2.8

0.5

7. China

9.1

8.8

7.2

7.2

6.6

8. Brazil

3.0

3.2

0.7

0.5

1.0

9. Russian Federation

0.9

0.7

5.0

5.7

8.3

    World

3.2

4.2

1.8

2.2

1.9

2.2

2.7

3.5

F = Forecast

Notes: GDP growth per cent p.a./GDP at 1987 constant prices and exchange rates.
Sources:
World Bank (WB), Global Economic Prospects 1998-99 (Dec. 1998), tables 1-9, 1-2, and table A-2-1.
IMF: World Economic Outlook , Dec. 1998, tables 4.1, 4.6 and 1.1.
World Bank: Global economic prospects and the developing countries 1998-99: Beyond financial crisis, IBRD, Washington, 1999.
IMF: World Economic Outlook , Dec. 1998, Washington, DC, Dec. 1998.
IMF: World Economic Outlook , Dec. 1998, Washington, DC, May 1998.

Appendix VII

Table 5. Increase in poverty due to the crisis (1998 forecasts)
 

Increase in the number of poor

Due to unemployment

Due to inflation

 

 

 

Millions

Percentage of population

Millions

Percentage of total increase

Millions

Percentage of total increase

Indonesia

39.9

20

12.3

30.8

27.6

69.2

Republic of Korea

5.5

12

4.7

85.5

0.8

14.5

Thailand

6.7

12

5.4

80.6

1.3

19.4

Source: IMF: World Economic Outlook, Oct. 1998.


Table 6. Production and employment in selected countries in
Central and Eastern Europe, 1989-97 (per cent change
over period, production in constant prices)
 

GDP

Employment

Bulgaria

35.8

24.7*

Czech Republic

2.5

7.6

Hungary

9.6

27.4*

Poland

+11.8*

11.7

Estonia

22.9

23.0*

Russian Federation

41.4

13.5

Ukraine

59.8

11.5

* 1989-96.
Source: Economic Survey of Europe , Geneva, UN/ECE, 1998, No. 2, cited in Follow-up to the Social Summit in CEE countries.

Appendix VIII

Annual economic growth in Latin America,
and in two of its giant economies, Brazil and Argentina
(Source: UN Economic Commission for Latin America
and the Caribbean)


Updated by VC. Approved by RH. Last update: 26 January 2000.

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