International Labour Organization: 100th Session of the International Labour Conference
14 June 2011, Geneva, Switzerland
It is my pleasure to be here today at this very important conference to discuss “The role of decent work in a fairer, greener and more sustainable globalization”. For me, this panel discussion is very timely since it is taking place only three weeks after our 67th annual session of ESCAP – at which several of today’s issues were raised.
During the Commission session, I was gratified to note that the countries of the Asia-Pacific region are progressively moving towards shaping a new economic and social order to ensure a better and more secure future for all in the region. By working together, I am confident that we can build more resilient societies and economies for a future based on shared prosperity, social progress and environmental sustainability.
The first key observation that I would highlight is the need for Asian and Pacific countries to accord greater priority to equitable and sustainable development in the region.
Asia and the Pacific has been the world’s fastest growing region for much of the past four decades. In this year, just after the global economic crisis, in a time when many countries of the region are facing high food and fuel prices, Asia-Pacific developing economies are still projected to grow by 7.3 per cent.
Despite impressive aggregate growth rates, almost one billion people live on less than 1.25 dollars a day. Projections suggest the number of poor people may increase by more than 70 million during 2010 and 2011 – an outcome reflecting that economic growth in the region is often accompanied by a rise in inequality.
A main reason for this across regions and certainly in Asia-Pacific is that growth and job creation have mainly taken place in urban areas rather than in rural areas, where a majority of the poor reside.
In fact, the share of people in vulnerable employment in the Asia-Pacific region is the second highest in the world, being only surpassed by Africa. As a result, too many people in Asia and the Pacific have low and uncertain incomes, few assets, and limited or no social or legal protection.
The region’s main untapped economic potential rests with its women and girls. They continue to be disproportionately affected by unmoveable barriers and hardship. Empowering women and making use of their potential is therefore critical. A fundamental condition is to ensure that women are legitimate participants of workforces at all levels, from global politics to household management – including through having full and equal access to education and decent employment opportunities.
Ladies and Gentlemen,
Persistent – and in many countries rising – inequalities also raise concerns among people that increased globalization does more harm than good for ordinary people’s lives. Without a clear coordinated agenda for policy reform, there is an increasing risk that any positive benefits of a global economy will be weakened by protectionism and anti-globalization movements. Without an immediate agenda of reform, we will delay our abilities in reaching a greener, fairer and more socially inclusive development.
A critical goal for the Asia-Pacific region is therefore to ensure that the region’s economic gains are equitably shared and based on principles of sustainable development.
The absence of robust tax and income-support schemes make income redistribution problematic. In this respect, poorer countries generally benefit more from promoting economic growth that leads to an increase in average household consumption. As an example, in Bangladesh and rural India, every percentage point increase in mean consumption per capita has been seen to reduce poverty by 0.7 percentage points.
The challenges posed by ageing populations are also very significant because of upward pressures on public expenditures for old-age pensions, health systems, and other social services. In addition, government revenue from income taxation will shrink as the effective tax base falls due to a declining labour supply – a problem exacerbated by sizeable proportions of informal employment.
To pave the way for equitable and sustainable development in the Asia-Pacific region, we must strive towards more cohesive societies with stronger social protection systems, including more and better employment opportunities for all.
In past years, most ESCAP studies have focussed on how to achieve inclusive and sustainable development in the region. To ensure that economic and social gains reach those who have not been able to benefit from the region’s growth, we have to enhance connectivity in the region.
A lack of market access due to insufficient infrastructure has hampered effective job creation in many countries. We have, therefore, also identified the need to increase trade within the region to make it less dependent and more resilient to external shocks. Moving into new markets would also enhance job creation. There is a special potential in creating green jobs and some countries in the region, such as the Republic of Korea, have already spearheaded this development.
This leads me into my second point, namely that promoting decent work and sustainable development is an investment for shared future prosperity.
Having a good job in the formal sector of the economy is the chief antidote to poverty, income inequality and social unrest. Generally, these jobs also open up access to social protection, such as sickness and disability benefits, subsidised health care and old-age pensions. We also know that more, better, and greener, jobs are crucial to achieving inclusive social and economic advancement while respecting the limits of the earth.
Still, in Asia and the Pacific, informal employment accounts for about three-quarters of all employment. Informal workers generally occupy low-paid, low-productivity and hazardous jobs with very limited or no social protection. As a result, almost half of all workers in the Asia-Pacific region are living with their families on less than 2 dollars a day.
Transforming informal jobs into decent formal employment will undoubtedly improve working conditions and individual income security, and substantially reduce the precarious situation poor people face.
Such a development would also strengthen the tax base and facilitate the transition towards more comprehensive and universal social protection systems – a crucial underpinning of the inclusive growth and development agenda.
As part of this transformation, Asia and the Pacific is also pursuing a “green growth” strategy so that countries across the region will value the earth and her resources and ensure the sustainable nature of economic growth. Green growth will not only change the nature of economic growth for many countries across the region, but also accelerate it by providing green jobs that are also decent jobs.
There are already many examples of progress being made in this direction. China, for example, is becoming a champion of green growth by investment in clean energy and the creation of related jobs which also offer poverty reduction opportunities. The Republic of Korea has committed to a programme of over 30 billion dollars to create 1 million green jobs. In the Russian Federation, enhanced focus is also being laid on more comprehensive inclusion of environmental factors into the country’s economic development plans. Many other countries across the region are undertaking similar endeavours.
The transformation to sustainable and equitable development not only requires shifts in labour markets and creating demand for new skills and re-skilling programmes, it also requires social protection for all, and especially those who are at greatest risk of insecurity.
Several governments in the Asia-Pacific region already offer different forms of social protection – from education scholarships to cash transfers, to support for disadvantaged and marginalized groups, such as older persons and persons with disabilities. Some also provide limited forms of social insurance for health care or unemployment. But most often, these schemes have been narrow in coverage and are typically fragmented. As a consequence, social protection, to date, in and among some of the world’s most populous countries, has benefited only a fraction of those in need. There is much work to be done.
ESCAP member States adopted social protection as the theme topic for our Commission session held just last month in Bangkok. The 62 member States of ESCAP adopted a resolution to strengthen social protection systems in Asia and the Pacific. The resolution reflects, to some degree, a growing consensus in the Asia-Pacific region that social protection must be integrated into broader economic and social strategies to guarantee all citizens a minimum level of security.
Our governments committed to a range of actions, including:
ILO’s pioneering work on the social protection floor has made an enormous contribution to advancing our understanding of social protection and its role in development policy and planning. In this regard, I would like to acknowledge the leadership role of the Director-General of the ILO, Mr. Juan Somavia.
Ladies and Gentlemen,
Social protection can provide insurance to reduce the impact of external shocks, help individuals cope with transitions during economic downturns, facilitate job transitions, and provide needed income support, while having important positive spill-over effects on aggregate demand.
Social protection therefore offers a transformative future agenda to reduce poverty and exclusion.
To give you an example, one of the Asia-Pacific region’s most impressive large-scale programmes is India’s National Rural Employment Guarantee Scheme, which offers 100 days of work per family in rural areas at the minimum wage for agriculture. The scheme provides jobs for 34 million households at a cost of only 0.3 per cent of GDP.
More than half of all beneficiaries are agricultural and unskilled workers. In some districts, female-headed households account for over half of the beneficiaries. The majority of the beneficiary households purchase livestock with their higher income, and families spend more on both food and non-food items, thus enhancing economic growth.
Another example is the efforts of the Government of Thailand to extend social protection programmes to informal sector workers. In this new scheme based on partnership, the Government matches voluntary contributions from workers themselves. It is hoped that this will encourage 2.4 million previously unprotected workers to join, which is around 10 per cent of the informal workforce, which in turn is around 70 per cent of Thailand’s working population.
These examples, and many others, present a compelling case for action. While all countries will need to build their own systems based on national circumstances, there are opportunities for every country across Asia and the Pacific.
Regarding how to make social protection truly effective in the overall development context, there are three important lessons from the Asia-Pacific region:
Firstly, social protection, if based upon universal and rights-based principles, is an essential basis for inclusive social and economic development. By reducing inequality, it has a role in ensuring that economic growth benefits the poor. It also makes poverty reduction more sustainable by reducing risks and vulnerabilities.
Secondly, universal social protection is achievable and affordable. Actually, in most countries in Asia and the Pacific, a basic social protection package – covering child allowances, old age pensions and universal access to basic health-care services – would not exceed 3 per cent of GDP. And this is an investment that pays off in the future through greater resilience of the economy and by increasing productivity and unlocking the potential of marginalized groups. These productivity gains, in turn, further boost economic growth.
And thirdly, in order to unlock the region’s full potential, social protection must specifically address the needs of the most excluded and vulnerable groups in society, among others, those living with HIV, older persons, persons with disabilities, economically-dependent women, migrant workers, the rural poor, vulnerable children and unemployed youth.
Ladies and Gentlemen,
A system of social protection based on rights that reflects a social contract between a government and its citizens is fundamental to achieving inclusive and sustainable development in a globalizing world. Social protection must be seen as a universal right for all rather than a privilege for a few.
My third and final observation is that for sustainable development to be effective and inclusive there is a need for more systematic policy coherence.
Inequality creates economic and social challenges and is a major driving force for social and political unrest. We have seen this many times over the past decades and also very recently in other parts of the world.
We are still feeling the effects of the global economic and financial crisis. At the same time, the Asia-Pacific region has been severely affected by numerous natural disasters.
These recent events have generated a renewed interest in improving governance and investing in green decent jobs and social protection as tools to mitigate the impacts and to accelerate recovery for those most affected.
A key ingredient of such policy is to focus on quality of jobs and income redistribution. In this respect, policies should support women and vulnerable groups to contribute to society and the labour market on equal terms. In short, the goal should be to give decent employment opportunities to all persons who can and want to work.
One fundamental issue is developing inclusive and sustainable infrastructure across the region. This infrastructure challenge necessitates a shared approach in the delivery of projects between the public and private sector. With more efficient administrative and regulatory frameworks, as well as enhanced capacity, across the region, growth can be more equitably shared. Energy efficient mass transit systems can be developed, allowing greater productively and safer modes of transport for all.
To find sustainable solutions, short-term policy measures must take a long-term perspective to pave the way to better cope with our future goals and aspirations. Governments must work closely with key stakeholders, including civil society and the international community. To build broad political consensus around these, often sensitive, policy changes it is critical that the voices of vulnerable groups are heard.
By working together with common goals and greater policy coherence we can invest our knowledge and capital in regional economic development and create economic corridors to increase intra-regional trade and investment, and improve connectivity between our countries.
Initiatives such as South-South Cooperation, triangular and regional cooperation should therefore be further promoted and extended. Regional and bilateral trade agreements may include provisions to harmonize standards or to facilitate green investments.
Countries should also work together to share their experiences and tackle the economic implications of emerging challenges. Indeed, reforms undertaken in a coherent and coordinated way can be mutually reinforcing. Developed countries can support developing countries by accelerating the transfer and adoption of new technologies that contribute to environmental sustainability and create related jobs. Support can also be through financing. To this effect, Japan and many other developed nations recently reaffirmed pledges to give US$30 billion in 2010-12 to help poor nations fight climate change in spite of budget cuts.
Subregional organizations can also play an important role in enhancing policy coherence and promoting sustainable and inclusive development. Among the members of the Association of Southeast Asian Nations (ASEAN), decent work is seen to be a key factor for the success of ASEAN integration, while efforts are being made to harmonize labour legislation in order to facilitate the process of translating ASEAN into a community.
In the South Asian Association for Regional Cooperation, or SAARC, efforts are being undertaken to promote the agenda of decent work and social protection.
Turning to the Pacific Island Forum, work on enhancing coherence of policies that promote decent work and recognize the need for environmental sustainability is underway.
In addition, various United Nations entities have been working from local and national to subregional and regional levels to enhance governance and bring about greater policy coherence in a wide variety of areas, covering decent work, equity and green growth. For this to be truly effective a shared vision and systematic collaboration between sectors and stakeholders is essential.
Taking things one step further, we must also overcome the growing challenge of realizing global cooperation to reach global policy coherence so that development may be sustainable and prosperity may be shared by all.
I would like to end by concluding that we have both a great challenge and an opportunity in front of us. Responding to it requires coordinated actions on different levels and co-operation of different actors. Rather than remain passive, we should all seize the opportunity and take action now.
With these words, Ladies and Gentlemen, I thank you.