International Labour Office The global financial, economic and social crisis and the Arab countries: A review of the evidence and policies for employment creation and social protection Zafiris Tzannatos The global financial, economic and social crisis and the Arab countries 2 The global financial, economic and social crisis and the Arab countries: A review of the evidence and policies for employment creation and social protection Zafiris Tzannatos Arab Employment Forum Beirut, Lebanon 19–21 October 2009 International Labour Office Copyright © International Labour Organization 2009 First published 2009 Publications of the International Labour Office enjoy copyright under Protocol 2 of the Universal Copyright Convention. Nevertheless, short ex- cerpts from them may be reproduced without authorization, on condition that the source is indicated. 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Catalogues or lists of new publications are available free of charge from the above address, or by email: [email protected] Visit our website: www.ilo.org/publns For ILO Regional Office publications, contact the following address: International Labour Organization Regional Office for Arab States P.O.Box 11-4088 Riad El Solh 1107-2150 Beirut, Lebanon. Website: www.ilo.org/arabstates Printed in Lebanon. Acknowledgements This paper was prepared as a contribution towards the Arab Employment Forum organized in Beirut from 19 to 21 October 2009 by the International Labour Organization (ILO) and the Arab Labour Organization (ALO) under the patronage of the Prime Minister of Lebanon. The views expressed in this paper are those of the author(s) and do not necessarily represent those of the ILO or the ALO or their officers. The paper describes research in progress by the author(s) and is published to elicit comments and to further debate. This paper was prepared under the overall guidance of Nada Al-Nashif, ILO Regional Director for the Arab States and Azita Berar-Awad, Director of the ILO’s Employment Policy Department. This document and its companion papers have benefited from contributions and suggestions from the Arab Employment Forum (AEF) task team, led by Maurizio Bussi and including Hicham Abou Jaoude, Christina Behrendt, Simel Esim, Walid Hamdan, Tariq Haq, Mary Kawar, Azfar Khan, Khawla Mattar, Mansour Omeira, Dorothea Schmidt and the participants of the prepara- tory meeting for the Arab Employment Forum held in Beirut on 28 July 2009. Special thanks to Alexandra Irani, Khatchig Karamanoukian, Deen Sharp and Noura Kamel for supportive research assistance and to Evelyn Ralph for editing the manuscript and providing useful suggestions. The author is also grateful to Reham Rached and Gida Ghandour for coordinating the translation and the production of this study. The global financial, economic and social crisis and the Arab countries i ii The global financial, economic and social crisis and the Arab countries Thematic Background Papers for the Arab Employment Forum A series of companion papers were prepared to inform At the 11th African Regional Meeting, which took place participants and frame the discussions of the thematic in Addis Ababa in April 2007, tripartite delegations sessions of the Arab Employment Forum. The subjects from Arab countries in Africa committed themselves of these thematic papers are: to a series of targets for the development of inte- grated Decent Work Country Programmes to accelerate 1. Growth, employment and decent work in the Arab progress towards the achievement of agreed interna- region: Key policy issues; tional development goals including the Millennium Development Goals. The conclusions of the Meeting em- 2. International labour migration and employment in phasized specific goals, including closure of the skills the Arab region: Origins, consequences and the gap, social inclusion through job creation, tripartism way forward; as a key governance mechanism for inclusive pov- 3. Tackling the global jobs crisis through social dia- erty-reducing growth, a fair regional policy on migrant logue: Issues, challenges and perspectives in the workers, freedom of association, the elimination of Arab region; child labour, slavery and discrimination, the extension of a basic social protection package for poverty reduc- 4. Supporting recovery policies through international tion, and escape from the informal economy trap. The labour standards and respect for workers’ rights: constituents also committed themselves to the African Issues and challenges for the Arab region; Decent Work Decade for the period 2007-2015, fol- lowing up on the conclusions of the Ouagadougou 5. Building adequate social protection systems and Summit of 2004 and its Declaration, Plan of Action protecting people in the Arab region; and and Follow-up Mechanism on Employment and Poverty Alleviation in Africa.2 6. Sustainable enterprise development and em- ployment creation in the Arab region: A review of The conclusions of the 35th Arab Labour Organization issues. Conference in April 2009 called for greater regional co- operation in the areas of employment, human resources The choice of the themes reflects the priority areas and and social dialogue. The Conference conclusions employment challenges facing the Arab region, partic- placed emphasis on developing regional initiatives, ularly as a result of the global financial and economic including a unified Arab Labour Law, and creating re- crisis. These thematic papers provide the background gional mechanisms to tackle shared challenges, such material for the realization of commitments made at as the establishment of an Arab Tripartite Forum and an the global and regional levels on decent work and on Arab Labour Market Information system. The ALO has the implementation of the Global Jobs Pact. Moreover highlighted the need for greater regional cooperation these papers are complementary to ILO approaches and coordination with the ILO to address the financial and they build on an ongoing process to support the re- and economic crisis. The ALO, in cooperation with the alization of decent work at the global level. ILO, organized the Arab Forum on Development and At the Fourteenth Asian Regional Meeting held in Employment in November 2008 that resulted in the Busan, Korea, in August/September 2006 the tripar- Doha Declaration, which identifies a shared set of re- tite delegates launched an Asian Decent Work Decade gional priorities. The subsequent Arab Economic, Social and committed to the achievement of specific decent and Development Summit (Kuwait, January 2009) work outcomes. The Meeting recommended coopera- ushered in the Arab Decade on Employment (2010- tion on specific initiatives at the regional level, where 2020) that established clear goals for the region, such joint action and sharing of knowledge and exper- as decreasing unemployment, halving the percentage tise will contribute to the realization of decent work. of working poor, enhancing production, promoting Recommendations also included strengthening employ- worker training, supporting small and medium enter- ment services, developing reliable regional statistics to prises and continuing the ratification process in the complement decision-making, providing support serv- region towards full compliance with international and ices for small enterprises, establishing benchmarks Arab labour standards. and good practices on the extension of social protection and strengthening labour inspection, dispute preven- tion and settlement.1 1 For further information, visit http://www.ilo.org/public/english/region/asro/ 2 For further information, visit http://www.ilo.org/public/english/region/afpro/ bangkok/ addisababa/index.htm The global financial, economic and social crisis and the Arab countries iii List of Acronyms AHDR Arab Human Development Report ALMPs Active Labour Market Programmes ALO Arab Labour Organization DE Diversified Economy EAP East Asia & the Pacific ECOSOC Economic and Social Council EIU Economist Intelligence Unit ESCWA