ECONOMIC AND SOCIAL COUNCIL HOLDS DIALOGUE WITH EXECUTIVE SECRETARIES

 

OF REGIONAL COMMISSIONS

 

(Reissued as received)

GENEVA, 6 July (UN Information Service) -- The Economic and Social Council this morning held a dialogue with the Executive Secretaries of the Regional Commissions on the regional dimension of creating an environment conducive to generating full and productive employment and decent work for all, and its impact on sustainable development. 

Kim Hak-Su, Executive Secretary of the Economic and Social Commission for Asia and the Pacific, introducing the report of the Secretary-General on Regional Cooperation, and making a presentation on the sub-theme of jobless growth, said in many countries around the world, employment had not kept pace with economic growth.  This was called jobless growth.  The Asia-Pacific region’s economy had been growing rapidly over the last decade.  Yet, during the same period, unemployment had been growing.  Increased economic output generally led to increased employment, but this had not been the case. 

Marek Belka, Executive Secretary of the Economic Commission for Europe, introducing the sub-theme on how unique were the labour market changes during the transition, said what was different in transition economies was that long-term and structural unemployment was much larger, and there was a greater geographical variation within countries.  They were much more characterised by jobless growth, which was much more likely to result in poverty, a movement towards an informal economy or towards agricultural subsistence and migration.  Labour force participation rates were lower, and had fallen after transition from unnaturally high levels and were much lower than in the European Union in general.

Jose Luis Machinea, Executive Secretary of the Economic Commission for Latin America and the Caribbean, introducing the sub-theme of labour markets and social protection, said Latin America did not seem to have the problem of jobless growth, and the problem was rather a lack of growth.  In the region as a whole, sluggish economic growth generated weak labour demand, and led to a deterioration of the main labour market indicators.  Low growth had created high levels of unemployment, and there was low productivity and high levels of inequality. There was a certain improvement on the labour markets since 2003, but there were still huge employment problems. 

Abdoulie Janneh, Executive Secretary of the Economic Commission for Africa, introducing the sub-theme on growth and employment for inclusive development in Africa, said Africa was growing at levels which had not been seen before, but this had not been having the type of impact which would have been expected on people’s lives.  Poverty continued to persist, and there had been a very slight movement of the number of people below the poverty line.  The growth had been concentrated in capital-intensive activities, and there had been no trickle-down effect.  On the relationship between growth and poverty in Africa, it was thought that the reason growth had not been able to impact on poverty was due to the lack of employment which was central to inclusive development. 

Mervat Tallawy, Executive Secretary of the Economic and Social Commission for Western Asia, speaking on the sub-theme of youth unemployment: challenges and prospects, said for the ESCWA region and the Arab World, youth unemployment had been chosen as a topic as it had specificities in the region, as there was a high number of young people between 15 to 24.  This age group was 20 per cent of the whole population.  The implication of this was that there was a need for some 80 million new jobs over the next 15 years just to keep pace with population growth.  The ways forward included the creation of an environment for raising productivity and boosting competitiveness, and assisting in facilitating training and investment in training that was relevant to employment requirements. 

A range of questions and comments were raised during the interactive segment, including the need to follow-up on the work towards the achievement of the Millennium Development Goals; improved cooperation between regional actors in order to link activities and to support country-level activities; the effects of globalisation and its social dimension which required efforts that went beyond borders; the need to have serious reflection on the reason for which economic growth did not cause increased employment in Africa; the need for Governments to ensure that social protection was given the right priority in their policies; and the new phenomenon in unemployment as it provided new grounds for terrorism and an incitement to the young to join such groups due to a lack of opportunities.

The dialogue was moderated by Seydou Bouda, Minister of Economy and Development of Burkina Faso.

Speaking in the interactive dialogue were the representatives of Brazil, Finland on behalf of the European Union, Guinea-Bissau, Pakistan, Nigeria, the Russian Federation, Barbados, the United States, Japan, Guinea, Norway and China.

The next plenary of the Council will be on Thursday afternoon at 3 p.m., when the Council will open its coordination segment, beginning with an introduction and general discussion.

Documents on the Regional Dimension of Creating an Environment Conducive to Generating Full and Productive Employment

The report of the Secretary-General entitled Regional Cooperation in the Economic, Social and Related Fields (E/2006/15 and Add.1) provides an update to the Economic and Social Council on the perspectives and developments in regional cooperation and the work of the regional commissions in relevant areas since the Council’s substantive session of 2005.  In section I, the report reviews the regional dimension of global issues and the global dimension of regional issues as contained in the report of the executive secretaries. That section also provides an update on the role and contributions of the commissions to support the implementation of the internationally agreed development goals, including the Millennium Development Goals, and reflects developments regarding effective linkages among the regional commissions and their institutional partners at the country, regional and global levels. An analytical presentation of the regional dimension of creating an environment conducive to generating full and productive employment and decent work for all, and its impact on sustainable development, is submitted in section II.

The report entitled Economic Trends, as well as Risks and Opportunities, for the Economies in the Economic Commission for Europe Region (E/2006/16), provides a summary of the assessment of main economic developments, as well as the risks and opportunities, faced by the economies in the Economic Commission for Europe (ECE) region in 2005. The deceleration of growth in the economy of the United States during 2005 is expected to continue into 2006, as it is increasingly challenged by a number of structural macroeconomic weaknesses, including low household savings rate, large external deficit and associated indebtedness.  Sustained high prices of energy and rising interest rates also constitute important downside risks.  The growth outlook for Western Europe remains lacklustre, in particular for the major economies.  In contrast, growth of the economies of the new members of the European Union is expected to strengthen as a result of stronger exports and increased long-term investment.  Growth in the Commonwealth of Independent States countries is expected to remain robust.  Growth in South-East Europe is expected to remain strong but to decelerate somewhat. While increased foreign direct investment inflows would continue, more restrictive macroeconomic policies, to counter expected overheating of these economies, may marginally affect private consumption.

The report entitled Overview of the Economic Report on Africa 2006: “Recent Economic Trends in Africa and Prospects for 2006”  (E/2006/17) reviews the economic and social conditions in Africa for 2005.  It also presents an outlook for medium-term developments and prospects for growth in 2006.  Overall, the report finds that economic conditions in the region have improved over the recent period but much more remains to be done to significantly reduce poverty and improve social conditions in Africa.  The report concludes with a set of policy recommendations aimed at accelerating and sustaining growth in African countries as a means of creating more employment, reducing poverty and improving social conditions consistent with achieving the Millennium Development Goals.

The report entitled Economic and Social Survey of Asia and the Pacific 2006, (E/2006/18), says global economic growth slowed to 3.2 per cent in 2005, down from the record growth rate of 4.0 per cent in 2004.  The growth rate of developing countries in Asia and the Pacific also decelerated moderately in 2005.  The slowdown in the global economy and in developing countries in the Economic and Social Commission for Asia and the Pacific region was the result primarily of high and volatile oil prices and a softening of global trade. More expensive oil also heightened inflation in the region; however, overall price pressures remained mild by historical standards.  Prospects for 2006 indicate that gross domestic product growth should maintain its current momentum while price pressures should abate slightly.

The report entitled Latin America and the Caribbean: Economic Situation

and Outlook, 2005-2006 (E/2006/19) says the Latin American and Caribbean economy grew for the third consecutive year in 2005.  Gross domestic product (GDP) expanded by an estimated 4.5 per cent, equal to a per capita GDP growth rate of almost 3 per cent. The dynamism of the global economy was behind the most outstanding feature of that period of economic growth, namely an expanding surplus on the balance of payments current account. The current account surplus for 2005 was equivalent to 1.3 per cent of GDP, exceeding the surpluses recorded for the previous two years. Major differences exist, however, between subregions.  Latin America and the Caribbean recorded an inflation rate of 6.2 per cent (as against 7.4 per cent in 2004), a continuation of a downward trend in this indicator for the region.  Economic growth also led to a decrease in unemployment, although the jobless rate is still high. The expansion of the business cycle is expected to carry over into 2006, with an overall projected economic growth rate of 4.6 per cent.

The report entitled Summary of the Survey of Economic and Social Developments in the Economic and Social Commission for Western Asia Region, 2005-2006 (E/2006/20) says the economies of member countries of the Economic and Social Commission for Western Asia (ESCWA) continued to grow for the third straight year after two decades of stagnation. This growth, however, is relatively jobless and dependent on one unsustainable trend: a huge surge in the price of oil.  Sooner or later, the trend will end, possibly abruptly, and when that happens the drop may be even more acute because resources are being intermediated by speculation on a poorly regulated regional asset market. Using windfall oil rents to speculate on slowly expanding assets doubly exposes the region to more volatility.  Instead of bubble-building in the regional stock markets (some doubling in value in less than a year) and capital diversion abroad, the current relative abundance of capital should offer ESCWA member countries a timely opportunity to implement some of the structural changes that are urgently needed to set the region on the path of rights-based development and employment-intensive growth free from the vacillations in the price of oil.

Statements

KIM HAK-SU, Executive Secretary of the Economic and Social Commission for Asia and the Pacific, introducing the report of the Secretary-General on Regional Cooperation, said each vision was characterised by its unique specificities on productive and decent employment.  Economic growth and employment generation should be consistent with the long-term goal of sustainable development.  The regional Commissions played an important role in facilitating policy analysis and dialogue.  They also served as conduits for the exchange of experience and good practice in their respective regions. 

Making a presentation on the sub-theme of jobless growth, he said that in many countries around the world, employment had not kept pace with economic growth.  This was called jobless growth.  The Asia-Pacific region’s economy had been growing rapidly over the last decade.  Yet, during the same period, unemployment had been growing.  Increased economic output generally led to increased employment, but this had not been the case.  The employment elasticity had declined in some countries.  Globalisation had often been blamed for this.  Job creation could also be affected by various factors, including rigidities in the labour markets, the Government incentive structure, and the lack of an appropriate policy environment.  Striking the right balance between high growth and employment increase was an important issue for Governments. 

There was a range of strategies for increasing employment, and these included the establishment of appropriate monetary and trade fundamentals, improving the functioning of labour markets, skills development, increased focus on labour-intensive sectors, how to incentivise capital-intensive investments while balancing this with job creation, and how could the Government make the private sector lead whilst protecting workers.

MAREK BELKA, Executive Secretary of the Economic Commission for Europe, introducing the sub-theme “how unique were the labour market changes during the transition”, said the comparison of regional specificities in the field of labour markets could be very interesting.  Unemployment levels in the UNECE region were pretty heterogeneous.  The former Eastern European States had started with unemployment rates being nominally at zero, and they now were similar to those in the rest of Europe, except for in CIS countries where this was suspiciously low.  Labour market flexibility was usually described better than in the Western part of the continent. 

What was different in transition economies was that long-term and structural unemployment was much larger, and there was a greater geographical variation within countries.  They were much more characterised by jobless growth, which was much more likely to result in poverty, a movement towards an informal economy or towards agricultural subsistence and migration.  Labour force participation rates were lower, and had fallen after transition from unnaturally high levels and were much lower than in the European Union in general.  Although increased labour flexibility could increase employment, it did not explain the differences.  The magnitude of structural adjustment was also unrelated to the level of unemployment, and there was no relationship between GDP changes and unemployment. 

The answer was the sequencing of reforms.  But there were still many unanswered questions as to the labour situation in the transition economies.

JOSE LUIS MACHINEA, Executive Secretary of the Economic Commission for Latin America and the Caribbean, introducing the sub-theme “labour markets and social protection”, said Latin America did not seem to have the problem of jobless growth, and the problem was rather a lack of growth.  In the region as a whole, sluggish economic growth generated weak labour demand, and led to a deterioration of the main labour market indicators.  Low growth had created high levels of unemployment, and there was low productivity and high levels of inequality.  There was growing labour market participation of women, but this was still comparatively low due to problems of access, and there were still wage gaps and higher female job instability.  There was a certain improvement on the labour markets since 2003, but there were still huge employment problems. 

There was no problem of elasticity of job growth, but rather a problem of lack of growth.  One of the features of trends in the Latin American labour market was that while there was social protection based on the labour market, this was not capable of generating jobs in the informal sector, resulting in social protection being low, and this was a reason for social exclusion.  The 1990s reforms had sought to create a greater link between employment and social protection and formalisation of the labour market.  There had been an improvement in some countries, and there was now a great amount of difference between the countries of the region.  There was a need for a new social covenant to universalise social protection.  Differences in reforms would depend on each country. 

ABDOULIE JANNEH, Executive Secretary of the Economic Commission for Africa introducing the sub-theme on growth and employment for inclusive development in Africa, said Africa was growing at levels which had not been seen before, at about 5.3 per cent.  This growth had not been having the type of impact which would have been expected on people’s lives.  Poverty continued to persist, and there had been a very slight movement of the number of people below the poverty line.  The growth had been concentrated in capital-intensive activities, and there had been no trickle-down effect.  On the relationship between growth and poverty in Africa, it was thought that the reason growth had not been able to impact on poverty was due to the lack of employment which was central to inclusive development. 

A decent job was the most effective and sustainable path out of poverty and was crucial to achieving the Millennium Development Goals, but employment opportunities were lacking.  Only a few privileged benefited from decent jobs.  The nature of the employment challenge in Africa was characterised by low productivity and unemployment in rural areas, by low wages and poor conditions in the informal sector in urban areas, a critical situation for women, high unemployment levels for youth, and a high incidence of child labour.  The consequences of this were many both for individuals and African society, and they included poverty, social exclusion, skills loss, deterioration of human health, family breakdown, young people engaging in risky behaviour, resorting to crime or migrating, and there was conflict and political instability.  This was a time bomb, and Africa and its partners had to find ways of responding to these challenges as soon as possible.  Governments should consider policies that were employment-friendly. 

MERVAT TALLAWY, Executive Secretary of the Economic and Social Commission for Western Asia (ESCWA), speaking on the sub-theme of youth unemployment: challenges and prospects, said without employment, many of the Millennium Development Goals could not be attained.  For the ESCWA region and the Arab World, youth unemployment had been chosen as a topic as it had specificities in the region, as there was a high number of young people between 15 to 24.  This age group was 20 per cent of the whole population.  The implication of this was that there was a need for some 80 million new jobs over the next 15 years just to keep pace with population growth. 

There was a great dependence on subsistence economies, and there was a need to move to a productive economy.  Wage compression and weak macro economic performance prompted migration.  There was a mismatch between the outputs of the educational system and the labour market requirements, and a poor or absence of institutional or systematic career counselling at all educational levels.  The ways forward included the creation of an environment for raising productivity and boosting competitiveness, and assisting in facilitating training and investment in training that was relevant to employment requirements.  Self-employment initiatives should also be encouraged.  ESCWA was devising policies in order to face the problem of youth unemployment, and was promoting relevant institutions which proved to be successful in confronting youth unemployment, among other things. 

Interactive Dialogue

In the interactive dialogue, delegations asked various questions and made comments, including the need to unite political efforts to increase levels of social protection; the need to follow-up on the work towards the achievement of the Millennium Development Goals; system-wide coherence and United Nations reform in general, including that of the UNECE; improved cooperation between regional actors in order to link activities and to support country-level activities; the effects of globalisation and its social dimension which required efforts that went beyond borders; the need to have serious reflection on why economic growth did not cause increased employment in Africa; the need for Governments to ensure that social protection was given the right priority in their policies; the new phenomenon in unemployment as it provided new grounds for terrorism and an incitement to the young to join such groups due to a lack of opportunities; how the regional Commissions acted as a bridge-builder in the areas, and what specific initiatives they had in mind which could be adopted built on existing synergies more effectively; the issues of peace and security with regards to development as these impeded their progress; and whether there were possible models for social security in Africa.

KIM HAK-SU, Executive Secretary of the Economic and Social Commission for Asia and the Pacific (ESCAP), responding to the questions and comments, said the regional dialogue between the European Union and Asia and between the European Union and Africa were very important.  ESCAP had a tenth annual meeting between its Secretariat and the head of ASEAN among others coming up shortly.  Last year it had decided to go ahead with a database on what the regional entities were doing, and action on poverty and energy trade would be coordinated, as would activities on HIV/AIDS.  On jobless growth, this complex situation had been lasting for a significant period of time.  A big part of the reason for this was the capital-intensive technology that prevailed in Asian manufacturing, and globalisation affected the management of the supply chain.  The labour market also lacked flexibility. The Asian-Pacific future population dynamics would also have a significant effect, with increased urbanisation and population aging.  

MAREK BELKA, Executive Secretary of the Economic Commission for Europe, responding to the questions and issues raised, said the issue was not just employment, but it was decent jobs.  This was due to the globalized world with higher aspirations than just employment to escape starvation, but a decent job that would lift them out of poverty forever.  The informal economy was one example, as a job therein was better than no job, but rarely could such a job be called a decent job.  This was an important matter for the discussion.  On fairness versus growth, this issue could be discussed and viewed from different angles, but the very discussion about decent jobs showed that fairness in employment was an important issue.

The transition economies, even though they recorded a very low growth of the labour force, sometimes due to serious demographic aging, had a serious problem of unemployment, although the prerequisites were there to tackle it perhaps even more than they were in other regions.  Institution-building had to be examined, as well as the proper causes of macro-economic policies.   There was nothing worse for employment than crisis fighting - the best way to tackle unemployment was to prevent crises, with a policy of foresight during times of prosperity.  In cases of turbulence in the economy, the burden fell on the disadvantaged. 

JOSE LUIS MACHINEA, Executive Secretary of the Economic Commission for Latin America and the Caribbean, responding to the questions and issues raised, said on growth and employment, Latin America had more than a problem of jobless growth, but one of a lack of growth, and that was the main problem today.  The quality of work and decent employment was a serious problem in the region and it had been learnt during the 1990s that greater labour flexibility did not work.  On the importance of social dialogue and social covenants, this was of central importance for Latin America and the Caribbean region which had a consensus to the effect that macro-economic stability was necessary.  But there was no consensus on other matters such as the need for reform and on matters relating to social protection or social cohesion.  European countries had had an impact from social governance which had helped in the North of Europe.

Political will had to be converted to more efficient social spending, but the actual situation in the countries was different.  It was not possible to resolve everything together.  Today it was clear that growth and equality and equity were not incompatible.  Greater inequity generated lower growth.  Greater social spending and greater poverty reduction did not necessarily restrict growth; they were compatible.   There was a concern that the regional Commissions should set priorities, but these should be set by Governments.  The Commissions could help in determining best practices and the consequences of reforms.  The regional systems did not show a great amount of solidarity. 

ABDOULIE JANNEH, Executive Secretary of the Economic Commission for Africa, said the comments and questions had been very encouraging.  Within the context of growth the continued relevance of the economic Commissions and their institutions had been raised, but this was not a question for Africa, where the usefulness of the Commission was fully recognised, and had been done so formally by the Assembly of the Heads of States.  The Commission for Africa was a key for development policies and goals in Africa.  Africa was aware of the challenges, with national frameworks for the development priorities, and the Commission was working to ensure that these were effective, bringing countries together in a peer learning mechanism to ensure that the various initiatives including the Millennium Development Goals were really being captured in the frameworks. 

On growth, there was no need to go into polemics as to where to start.  The levels of poverty in Africa were so deplorable, there was no argument as to whether this should be tackled by encouraging growth.  The problem in Africa was that people were very low, and growth should be implemented, accompanied by fairness including democratic principles.  Africa was managing itself better, and there was an increase in democratic principles.  Africa was increasingly aware of the challenge, the need to upscale efforts, to make sure that there was less exclusion and that the benefits of economic growth had a benefit for the majority of African people.

MERVAT TALLAWY, Executive Secretary of the Economic and Social Commission for Western Asia, responding to the questions and comments, said if giving a regional perspective to the five regions was interesting, then the representative of Guinea-Bissau should think of giving a direction on the next subject next year and the subject which required more attention on a regional basis.  On the issue that globalisation required to go beyond national boundaries, this was an objective of the regional Commissions.  The Commissions were doing a unique specific analysis of the situation at the regional level, advised Member States on the regional perspective, and allowed the Council to know exactly what was happening at the regional level.  They helped other inter-governmental regional entities, which could not participate in WTO meetings. 

The important thing was that the issues of growth and fairness were being raised, and that the discussion went into detail.  Economic growth, which was needed by all, should be based on equity, and this was the kind of responsibility, which the Council should live up to in the future.  

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