Countries must enter into a ‘global jobs pact’ to arrest job losses due to the ongoing economic crisis, head of the Geneva-based International Labour Organization (ILO) said on Tuesday.
“The financial, trade, economic, employment and social roots of the global crisis are interlinked and so must be the policy responses,” Juan Somavia, the ILO chief, told reporters, arguing that the response to the global economic crisis had so far been excessively focused on one or two areas but not on jobs and workers.
Launching a broadside on the lack of systemic coordinated responses, he said around 32 governments, which had spent about $1.19 trillion on stimulus packages, had spent a meagre 9.2 per cent on labour market measures and 1.8 per cent on social policy responses.
He said the ILO’s estimates suggested that over 38 million people lost their jobs, even as the expected job creation this year was going to be far below what it was two years ago.
Somavia suggested about 90 million people were going to be employed this year, but more and more people were becoming vulnerable to the spreading economic contagion.
“This is totally unacceptable,” he said, underscoring the need for “a coherent and coordinated jobs-oriented recovery strategy, based on sustainable enterprises, as soon as possible.”
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In his report presented to the ILO’s governing body on “The financial and economic crisis: A decent work response”, Somavia said the stimulus packages lean heavily on financial bailouts and tax cuts instead of job creation and social protection. “Fiscal stimulus packages for the real economy are five times smaller than financial bailout packages,” he emphasised.
Meanwhile, latest figures released by the World Trade Organization suggested that the collapse in global demand due to the “biggest economic downturn in decades will drive exports down by roughly 9 per cent in volume terms, the biggest such contraction since the Second World War”.
“Economic contraction in most of the industrial world and steep export declines already posted in the early months of this year by most major economies, particularly those in Asia, makes for an unusually bleak 2009 assessment,” according to the WTO’s annual assessment of global trade.