Globalisation: recent trends, social impact and role of ILO Raymond Torres Director, International Institute for Labour Studies ILO

What is new about globalisation? Growing number of actors: –BRICs represent 45% of labour supply, most of them were marginal participants in the world economy in the early 1990s –Increased global awareness of social problems (role of civil society)

What is new? Financial globalisation: –Financial assets represent nearly 5 times annual GDP of developed countries (it was at par with GDP in the early 1990s) –Similar trends, but with a lag, in emerging economies and developing countries Increased technical possibilities to outsource production

What is the social impact? New growth and job creation opportunities: –Since early 1990s, nearly all regions have enjoyed robust employment growth –But significant cross-country differences The benefits have been unequally shared: –Income of rich households has grown fast relative to middle- class and poor households, in over two thirds of countries –Real wages have grown moderately, much less than productivity gains, in nearly all countries. Profit shares have increased

What is the social impact? The labour market is more unstable: –Systemic financial crises were ten times more frequent in the 1990s than in the 1980s  Instability of financial flows –Firms respond more quickly to shocks (because of international competition and outsourcing possibilities) –Rising incidence of “non-regular” employment

Labour demand has become more responsive to shocks

How to respond? Aim is to enhance opportunities and ensure that they are equitably shared Comprehensive policy package: the Decent Work Agenda: i) Policies should aim at promoting employment opportunities: good for the economy and society (employment is probably the most effective redistribution mechanism)

How to respond? ii)Social protection, consistent with employment, should be available: shares costs of adjustment, supports re-employment and enhance support for change iii)Fundamental principles and rights at work: key for a balanced development and an input to development (e.g. child labour) iv)Social dialogue: a method to ensure that reforms are properly discussed and implemented, and a way to share the gains from reforms

How to respond? Possible obstacles to implementation of the DW agenda: –Funding of the measures –Technical difficulties of certain measures, need to tailor them to country circumstances –Perception that there may be gainers and losers?

Two recent ILO initiatives 1998 Declaration on Fundamental Principles and Rights at Work and its follow up 2008 Declaration on Social Justice for a Fair Globalization and its follow up

Selected references ILO-WTO report entitled “Trade and Employment - Challenges for Policy Research”, Forthcoming report of the IILS, World of Work See IILS web site on Declaration available on Declaration available in the room.