Fighting Global Unemployment Requires Cooperation

ASTANA – The problem of global unemployment became one of the key topics of discussion at the recent Sixth Astana Economic Forum (AEF).

The situation in the global labour market is already deplorable and only worsening. By the end of 2012, according to disappointing forecasts by the International Labour Organisation (ILO) the number of unemployed people was estimated to reach 197 million (75 million of them young people); in the next five years, this figure will increase to 211 million.

What solutions are offered by the ILO to increase employment during this crisis? What factors determine the state of crisis? Director of Technical Support of Decent Work and the ILO Office for Eastern Europe and Central Asia Ms. Dimitrina Dimitrova, who arrived in Astana to take part in the AEF, tackled these and other questions in an interview.

Please tell us briefly about the mission of the ILO. As far as we know, it has a nearly century-long history.

Yes, you are right. The International Labour Organisation is one of the oldest and most representative international organisations, founded in the times of the UN’s predecessor, the League of Nations. The main purpose of our organisation is to ensure decent work within the globalising world economy.

Economic growth by itself does not guarantee social progress when the growth of wealth is combined with an increase in poverty. To strengthen the link between social progress and economic growth, the guarantee of fundamental principles and rights at work are of special importance and meaning. These principles were important throughout the century-long history of the ILO, but now, in the context of globalisation, the importance of these principles becomes more acute.

This has happened because regulatory mechanisms of labour relations before the era of globalisation were set at a national level. With the rise of globalisation, the ability of states to regulate all aspects of economic growth sharply decreased. In this regard, governments could no longer fully influence socioeconomic policies. We have more than 200 conventions that create minimal but good social and labour standards. Therefore, the value of the ILO in the era of globalisation has increased significantly.

How did the ILO grow? Was it able to predict these negative effects of world economic development?

According to ILO estimates, globalisation from the very beginning contained internal risks, because the state is no longer able to adequately regulate financial and economic flows. Many processes got out of hand.

Ten years ago, the ILO warned all 187 member states of the organisation that globalisation creates economic imbalances. Ever-increasing socioeconomic inequality engendered discontent among populations. This was true for the developed countries as well. All these factors have led to political instability; a wave of social protests took place in some European countries. Therefore, the global crisis was not unexpected for the ILO. We warned and made recommendations prior to it.

When the current crisis broke out, the ILO responded immediately. In 2009, the ILO adopted a Global Jobs Pact for employment. These are comprehensive measures in the area of macro-economic, labour and social policies that could minimise the adverse impact of the global financial meltdown. Naturally, those were only recommended measures; each state had a choice to accept them or not.

Some countries that adopted timely measures to stimulate economic growth and began to fight unemployment by creating temporary employment measures have experienced success despite the global crisis. Those countries that have not heeded our advice and went the way of cuts in public spending, meaning they adopted the policy of austerity, simply drowned in the abyss of the crisis. You see, they only aggravated the situation. Most of all the ILO fears that social unrest could lead to a protracted political crisis.

What solutions does the ILO offer to increase employment during this global economic crisis?

To overcome the existing situation the ILO offers to work actively in three directions. First is to improve investment climates and create new work places, and the key factor in this direction is the improvement of business environments in each state. Second is to stimulate global demand, which is lowered by unemployment and fluctuating employment and in turn slows economic growth and fosters unemployment. We should break this vicious cycle by all means. Finally, the third direction is to overcome the discrepancy between supply and demand on the job market. For instance, many professions are not in demand today or are even extinct. On the other hand, new professions emerge but require new skills, thus leaving people on the sidelines. This creates the necessity to improve educational systems and systems of professional training.

As you know, as part of the Road Map of Employment 2020, state programme retraining and skills development are being conducted in Kazakhstan. Thousands of Kazakhstan citizens have taken professional courses and learned new professions. From what you’ve observed, are these programmes effective?

I just wanted to continue the conversation on measures to ensure employment of the population in Kazakhstan, but you have beaten me to it. Yes, you’re right, Kazakhstan has made very rapid strides in that direction, which were recommended by the ILO. In the crisis period of 2008-2009, a decline in production, increase in inflation and decline in employment occurred in Kazakhstan. Exactly at that time, the Road Map of Employment 2020 was adopted, which allowed the creation of non-permanent jobs, ensuring temporary employment. This is very important because the action was very timely, as the crisis was advancing on all fronts.

The prompt action of Kazakhstan’s government, aimed at preventing a sharp rise in unemployment, has given people the opportunity to not only find jobs, but also to solve a number of pressing problems in housing and communal services and infrastructure. In this regard, Kazakhstan is now developing at a relatively stable rate both economically and socially. The ILO highly appreciates Kazakhstan’s efforts to address the most pressing issues of reducing unemployment and increasing employment.

Kazakhstan’s dependence on hydrocarbon exports holds considerable weight in the national economy. It is therefore very important to develop the non-oil sector of the economy, to diversify. As I know, Kazakhstan adopted a programme of accelerated industrial-innovative development. It is very good. However, most importantly, Kazakhstan has a long-term perspective. Alas, many countries have lost the opportunity to influence long-term prospects.

Tasks set in the development strategy Kazakhstan 2050 are very ambitious, both economically and socially. Now we need to move toward stimulating domestic demand. This is a very important question, which I would like to emphasise. The economy moves forward if there is an external demand for domestic products. But if there is domestic demand, it is a double success. It is a guarantee of firmness and economic stability. Noting the success of Kazakhstan, one must always keep in mind the risks. Therefore, we cannot rest on our laurels but must build on the success and develop further.

How does the ILO perceive the maintenance of standards of decent labour in Kazakhstan, such as salaries, labour administration and other indicators?

Kazakhstan has ratified 21 conventions in the field of labour relations, eight of which are of fundamental importance. According to international experts, Kazakhstan’s wage level belongs in the category of well-off countries. Once again, I would like to note that Kazakhstan has a very low unemployment rate, about 5.3 percent. The rate of unemployment of young people also demonstrates very good performance.

Working conditions are a factor that requires additional improvement. This applies to the oil and gas, construction, chemistry and metallurgy sectors and so on. In this respect, the ILO is already working with the Ministry of Labour and Social Protection (MLSP) of Kazakhstan, and I hope that we will move forward. The main thing is that we have a point of contact.

In the field of labour relations, the individual is not strong enough to defend his rights. Therefore, the free association of individuals in organisations that collectively could defend their rights against employers is fundamentally important to the ILO. Kazakhstan is interested in further development of social dialogue mechanisms. The ILO is already working with the MLSP of Kazakhstan on this issue. We also appreciate Kazakhstan’s efforts to develop partnerships and find ways for the civilised settlement of labour disputes.

I also want to note that the Ministry of Labour and Social Protections contacted the ILO with an enquiry to develop recommendations on the draft law in the field of employment, taking into account global experience. The ILO will formulate the main important components of this bill and will make recommendations. As I have already noted, the Road Map for Employment 2020 programme already exists and for its implementation the right legal framework is required. It will be a new law on employment.

The ILO is also working with Kazakhstan on issues of youth employment in rural areas and on the protection of labour. By the way, an ILO mission will soon arrive in Kazakhstan to analyse the degree of effectiveness of the support for the ILO’s work. Based on this analysis, we will make recommendations. The degree of implementation of our recommendations will be decided at the level of national government and social partners: employers and unions. The directions mentioned previously are the priority areas of our cooperation with the MLSP of Kazakhstan.

Some successful countries in the world are seeking to strengthen their competitive positions by developing their human intellectual capital. That is, they are moving away from older definitions of human resources. Do employers realise that attitudes towards workers as capital will be a major factor in development?

There is no universal answer to this question yet. There are big companies that have unique cultures, methods and concepts related to the worker as capital. There are employers who absolutely do not value their staff and work them 12 hours a day and pay them very little money. This is harshly criticised by the ILO, which fights for the eradication of such negative trends in the global labour market. Nothing can be said about rapid success, but I know there are companies that are trying to invest in the individual: in his education, skills, motivation and so on. Undoubtedly, these companies are developing more successfully and dynamically.