"Growth, Structural Change and Employment" - Statement by Jose M. Salazar-Xirinachs

Opening remarks by Jose M. Salazar-Xirinachs, Executive Director for Employment Sector of the ILO delivered at the Global Preparatory Meeting on the Post-2015 Framework for Development at the Japan International Cooperation Agency (JICA) Research Institute

Statement | Tokyo, Japan | 15 May 2012
Ambassador Kenji Hiramatsu, Director General for Global Issues at the Ministry of Foreign Affairs
Mr. Akio Hosono, Director JICA Research Institute
Miss. Akiko Yuge, Director of UN Rep Office in Japan
Mr Magdy Martinez-Soliman, Deputy Assistant Administrator and Deputy Director, Bureau for Development Policy, UNDP
Colleagues from the other international organizations
Distinguished participants,

It is a privilege for me to participate in this meeting. We are just at the beginning of an intense process of consultations and discussions on the contours of the development agenda for the years to come. The outcomes will be of value to our constituents and to people in all countries. With this meeting, I think we are starting off this process on the right foot.

Let me give you a few reasons why I think this is a special meeting.

First, for its method: an open, informed consultation with stakeholders and policy-makers from all regions. I welcome the representatives and the experts from governments, civil society, trade unions and employers. Dialogue and consultation with unions and the private sector are founding principles underlying ILO values and method of work. It is a practice entrenched in our own governing structures. We know by experience that it is a practice that leads to sound and effective design of policy and it ensures ownership in implementation.

Second, the content of this meeting - growth, structural change and employment - is one of the defining subjects of our times. A series of consecutive crisis – food, fuel and financial – have hit hard labour markets in both developing and developed countries, exacerbating an already precarious jobs situation.

Global unemployment estimates have increased from 170 million in 2007 to 197 million in 2011, reaching an unprecedented high, and are projected to grow further. A large portion of the unemployed - about 75 million - are young women and men. Youth unemployment rates are alarmingly high in the developed world: almost 50% in Spain and Greece, around 30% in Slovakia, Ireland, Portugal and Italy, 16% in the United States. And the rates are even higher when one incorporates the discouraged, those millions of people that have given up hope and are not searching for jobs any more. The ranks of people doing temporary and part time work have also increased dramatically.

In the developing world, underemployment, casual work and vulnerable employment remain widespread, and hard-earned progress in the fight against poverty is at stake. At the ILO, we estimate that one out of three workers in the world is living with their families below the US$2 a day poverty line.

This dramatic situation is made more difficult by uncertain perspectives for global economic growth. Projections for the next few years are pretty flat and we all know that employment recovery lags a few years behind economic pick-up. Moreover, a series of demographic and technological trends, which I will illustrate in my presentation later today, are adding structural pressures on labour markets.

In short, there should be no doubt in our minds that when the world leaders will meet in 2015 to set a new agenda for global action, the question of jobs and growth will be very much at the center of their attention. Hence the importance of the discussion we are launching today.

I would like to thank the Japanese Government for their support and commend their vision and leadership in giving priority to this topic as a theme of the first meeting in the whole post 2015 programme of consultations.
The meeting is an outcome of close and productive cooperation between UNDP, UNCTAD and the ILO, with the important contribution of participants from UNICEF, the Asian Development Bank, the World Bank and others. Interagency cooperation - I assure you - is not easy. We act under the straitjacket of bureaucratic boundaries, but such collaboration is certainly bound to grow and I am sure will characterize much of development assistance in the future. So - as I said before – we are indeed starting on the right foot.

I would like to briefly share with you some of the expectations that we have at the ILO about the way to 2015.

The Millennium Development Goals provided a major global framework for concerted development action. Undoubtedly, they strengthened advocacy for poverty alleviation and human development, improving coordination and focus on assistance. They introduced a format of simple targets and goals that helped monitoring and accountability. I should recall that, although a bit late in the game, a set of indicators for employment and decent
work was included under MDG 1 Eradicate Extreme Poverty and Hunger under overall target 1b on “Achieving full and productive employment and decent work for all, including women and young people”. As we look to the next phase, the challenge is to build on success and learn from experience in order to go beyond 2015.

How can we do this?

First, we may need to take into better account the complexity of development as a process of economic and social transformation. We should strive for a new global development framework that goes beyond the minimum common denominator of alleviating extreme poverty by means of aid from rich countries. Countries at any level of development must have an opportunity to stand on their feet and take care of their poorest and more vulnerable citizens. Ordinary people everywhere must see their fundamental human rights recognized and respected and enjoy chances for decent jobs in sustainable enterprises, if they are to benefit of the hospitals,  the schools and the clinics offered by outside help. The focus should be on home-grown policies well adapted to the situation of each country.

A new conversation about the need for investment in productive capacities and infrastructure; the role of enterprises; the importance of employment, labour market and skills policies; the urgency to set up social protection floors has already started - at the LDC conference in Istanbul last year and more recently in Doha. It will continue at the G20 Development Working Group in Los Cabos and at the ECOSOC Annual Ministerial Review next July. We should contribute to this stream of thinking and capitalize on it for our own agenda setting effort.

Second, we need to sharpen our understanding of how policies work. The MDG privileged ends, leaving undetermined the choice of means. Regrettably, this left room to oversimplified one-size-fits-all approaches. A global  framework for development should not be prescriptive, but sovereign national initiatives should benefit from frank and informed policy dialogue and exchange of good practice. We should collect policy lessons to crystallize our thoughts, beyond ideology, about the boundaries of markets and state. We must carry out a rigorous rethinking of what are good macroeconomic and financial policies in light of their impact on people, society and the environment.

Third, we must avoid a situation where narrowly defined targets and goals encourage disjointed operations and the prevalence of a “silos attitude”, with environment targets being acted upon by environment agencies alone, education targets by ministries of education and so on. A “whole of government” approach is the call to order for any effort to pursue inclusive, equitable and sustainable economic growth. The sustained generation of decent and productive jobs can be achieved only through macroeconomic and labour market policies working together, with trade, sectoral and financial policies playing important roles in fostering structural change, innovation and technological progress.

Fourth, we must give more emphasis to the question of the quality of jobs and consider labour market policies and institutions to protect workers. Uncertain, poorly paid and precarious work is not just associated with insecurity and inequalities among the poor and the vulnerable in developing countries. It is also affecting growing portions of the population of the most advanced economies. Even in this major industrial powerhouse that is Japan, the labour market has moved within a short period of time from life-time employment for most to a situation where many can only access temporary and unstable jobs. The inequalities and instabilities created by the lack of decent work are shaking our societies, regardless of where they sit in the development frontier. We must tackle them together.

Let me conclude. We have a hard task ahead and two days is not much time. I trust we will be able to move forward. As I mentioned, this is just the beginning of a process. The network of expertise and knowledge we have  gathered here should remain a core part of it.
The ILO is fully committed to uphold and continue this conversation.

Thank you for being here, thank you in advance for your contributions, thank you for your