International Labour Office Office of the Director-General

Statements 2005

Address by Juan Somavia Director-General of the International Labour Office to the Ministerial Session of the Group of 24 (Washington DC, 15 April 2005)

Monsieur le Président, Ministers of Finance, Dear Friends,

It is a special privilege and pleasure for me to speak to you today—to follow up on our discussion last October when I introduced the Report of the World Commission on the Social Dimension of Globalization. I want to thank you for your last Communiqué which welcomed that Report—and its guidance that employment should be at the centre of the Millennium Development Goals (MDGs) and the development agenda—and underscored “ the role of employment in poverty reduction”.

So, I welcome this opportunity to share with you some of the important signs of progress in working towards this objective but I will also share some of my concerns and hopes for the future.

In my statement prepared for the International Monetary and Financial Committee tomorrow I have stressed that, to attain the MDGs by 2015, much more needs to be done. Let me mention three key priority areas:

First, of central concern today is the inadequate creation of productive jobs; Second, attaining the development goal of poverty reduction relies critically on making major progress in Africa; but Third, we need to take a much more balanced approach toward economic and social policies, an approach that needs to integrate these policy spheres more closely to increase competitiveness and productivity.

To this end, we need to give more weight to the creation of decent jobs if we are ever to attain the objective of halving poverty by 2015. As you know, at recent rates of economic growth, the objective will not be attained in too many developing countries.

But we all know well that the issue is not economic growth alone. It is sustainable, job-rich growth—and “job-rich” refers not only to generating more jobs at given rates of economic growth but to increasing quality jobs, on which to build personal dignity, family stability and peaceful communities. Many positive efforts in that direction are underway in many countries.

I am glad that the UN Secretary-General’s recent report to the General Assembly underscores the importance of “providing decent jobs that both provide income and empower the poor, especially women and younger people”. It gives greater emphasis to the centrality of productive

Page 1 employment for poverty reduction, thus rectifying an omission in the Millennium Declaration and the Development Goals.

Many, worldwide, believe that we must begin to think of productive employment as a development goal in its own right—not as another individual MDG, but as a cross-cutting objective that contributes to the realization of all the others.

I cannot put it any better than the caucus of African ministers of finance who declared the following in a statement for the African Union Extraordinary Summit on Employment and Poverty Alleviation in Africa last year in Ouagadougou, Burkina Faso:

“The ministers of finance stressed the decisive role of employment in poverty reduction. They welcomed recent progress in the African economies but deplored the fact that the creation of decent work has not followed the same path. Experience has shown that although strong and sustainable economic growth, in the context of an integrated and globalized economy is essential, it is not sufficient in itself to reduce poverty. Growth has to be supported by a diversified economy and its benefits have to be equitably shared. Furthermore, it has been demonstrated that there is a close correlation between decent work creation and poverty reduction. However, the Ministers noted that employment issues had not been sufficiently taken into account in poverty reduction strategies and, more generally, in development policies and strategies. They recognized the need to correct this situation”.

This was taken up by the Heads of State and Government of the African Union at their Third Extraordinary Session—chaired by President Obasanjo of the Federal Republic of Nigeria—who, in their declaration, committed themselves to “place employment creation as an explicit and central objective of (their) economic and social policies at national, regional and continental levels, for sustainable poverty alleviation.”

The question before us, of course, is how? What is the right combination of national and global policies to make it happen in very different national contexts?

I want to share with you today several brief examples of how countries are taking practical steps to achieve their employment goals as part of their efforts to implement the MDGs and poverty reduction.

As you know, for some years the ILO has been collaborating closely with the World Bank and International Monetary Fund on their Poverty Reduction Strategy (PRS) processes, especially at the national level. Our own contribution to the PRS process has been focused on working with our tripartite constituents—governments, employers and workers—at the national level, to create an enabling environment and support for the central role of enterprise development and decent work as a development objective.

One such case is that of Ghana—where leaders have taken up efforts to adopt a sector-wide approach to fund capacity development, embark on cross-sectoral decent work creation efforts and ensure that employment is a central theme within the Ghana Poverty Reduction Strategy (GPRS). A proposed Presidential Employment Summit will take place later this year. South Africa held one last year. Nigeria is planning one for this year. The follow up to the Ouagadougou Summit is clearly underway.

Argentina is another example where they have launched a National Decent Work Programme that reflects Argentina’s efforts to meet the MDGs by better integrating labour, economic, and social

Page 2 policies between relevant ministries in Argentina—and also through better policy integration. Argentina has explicitly made decent work a part of their national MDG strategy.

There are many more examples of ILO member States—and members of the G-24—taking practical steps to promote job-rich poverty reduction strategies. The importance of these examples is that they show not only how it can be done at the national and local level—but demonstrate that countries are prepared to address this basic challenge. And this is a mushrooming issue: it’s being addressed even by the “fast growers”, such as China, which, with the ILO, organized the China Employment Forum in April 2004 which explored a broad array of employment challenges in the country. And employment will top the agenda again in the Fall at the Summit of the Americas.

The ILO believes that such an employment-centered approach to looking at development is the business of all countries. It is certainly the fundamental need of the poorest countries, but it is equally relevant to the World Bank’s Country Assistance Strategies in non-PRSP countries.

Taking into account the G-24 communique’s “call for the Bretton Woods Institutions to stress employment creation in their programmes”, the ILO continues to promote enhanced collaboration with the World Bank and the International Monetary Fund in this area. One initiative that I believe holds out particular promise is the Youth Employment Network.

This is a special initiative led by the ILO with the committed partnership of World Bank President James D. Wolfensohn and the UN Secretary-General Kofi Annan. Eleven countries have voluntarily stepped forward to become “lead countries” to develop National Action Plans on Youth Employment as called for by UN resolution A57/165.

Six of these countries are from Africa—and these efforts were reinforced by the African Union Extraordinary Summit Declaration that supported “developing and implementing strategies that give young people in Africa a real chance to find decent and productive work”.

If I may, Mr. Chairman, I would also like to take a moment to draw your attention to two other issues:

First, one of the recommendations from the report of the World Commission on the Social Dimension of Globalization was to bring together relevant multilateral institutions to strengthen governance at the global level regarding a number of priority policy issues. The ILO is presently undertaking such an initiative on the very basics—growth, investment, and employment—with the participation of the World Bank, IMF, UNCTAD, UN/DESA, ILO and others. The goal is to identify relevant activities underway within the various institutions with a view to identifying opportunities for collaboration and synergies for the future.

The results of this initiative may indeed be relevant and useful to the G-24. It is clear that there are new opportunities and demands for all multilateral institutions to work more effectively and efficiently—and to work together, because no one institution can reasonably claim to have all the policy answers. Our member States expect us to take full advantage of those opportunities, within our mandates and knowledge base, to give them coherent and convergent policy advice. This initiative is a specific and practical step forward—and I look forward to sharing the results with you in the future.

Second, based on the ILO’s experience during the past few years of working with the G-24, I believe that there are also opportunities for us to work closer together—and better—on some of the major economic and social challenges facing each of our institutions. Therefore, I look

Page 3 forward especially to enhanced collaboration between the ILO and your research and technical activities related to economic and employment growth. Perhaps a joint research exchange, an exchange of informed views, could be a beneficial way to begin—a contribution from us to your work and vice versa.

I thank you for this opportunity to be with you. I am convinced that ministers of finance— individually as well as together within the G-24—have a vital role to play in placing employment at the centre of the MDGs and the development agenda at the global, regional, national and local level.

I look forward to working with you closely in the critical times ahead.

Thank you.

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