WASHINGTON (ILO News) ─ The Director-General of the International Labour Office, Juan Somavia, has called for a series of urgent and coordinated financial, social, regulatory and development measures to avert a slide into recession and address the “grave” consequences of the global financial crisis (Note 1).
In a statement to the International Monetary Fund (IMF) and the World Bank meeting here, Mr. Somavia says, “The crisis of the international financial system has grave consequences for enterprises, workers and families around the world. Coming on top of still high food and fuel prices, its effects are provoking a slide into a recession that unless averted by prompt and coordinated government actions could be severe, long lasting and global.”
“We have abruptly moved from an era of changes to a change of era”, the statement says.
Mr. Somavia’s statement calls for immediate action to “get credit flowing again quickly through continued coordinated action by monetary authorities before more serious damage is done to the productive capacity and social fabric all around the world”.
The statement also urges that a “floor” be built through “maintaining and enhancing social protection for workers, ensuring that productive enterprises – in particular small businesses – can access credit, avoiding layoffs and wage cuts, and increasing official development assistance to least developed countries”.
“Those who had no responsibility for the crisis but are now and in the near future suffering job and income loss must be supported”, the statement says.
The statement also says, “we must start rebuilding the regulatory regime for global finance markets to reduce chronic volatility and instability. Money must work for people. The foundation of a new regime for market economies is the old ethic that good hard work deserves a fair reward. Our financial systems must support, not undermine, fairness in society and the importance of sustainable enterprises and decent and productive work to stable, peaceful communities”.
“When deregulation is regarded as always the best policy in all circumstances it becomes an ideology not a tool”, the statement says.
It also calls for “financial policies that promote productive investment, restrain speculative behaviour, ensure transparency and rebuild credibility in the system”, adding that the mechanisms of the IMF “must apply with equal weight to big and powerful nations as well as smaller and weaker countries”.
In addition, it urges a rapid move from “recovery to sustainable development” to support “a fair globalization providing opportunities for all”.
“We were in a crisis before the financial crisis erupted”, the statement says. “It is a crisis of continuing and now increasing massive poverty worldwide and growing social inequalities in advanced, emerging and developing countries. An effective and coordinated effort to address the immediate financial crisis must be a first step towards increased cooperation and coherence in global policy-making.”
The statement also calls for construction of “a new stronger international institutional architecture that fosters a balanced and integrated approach to sustainable development. Developing integrated policies among relevant international organizations to generate Decent Work opportunities worldwide is one of the foundations of a sustainable recovery and a fair globalization”.
Note 1 – Sustainable Recovery and Shaping a Fair Globalization, Statement by Mr. Juan Somavia, Director-General, International Labour Office, International Monetary and Finance Committee and Development Committee, Washington, 10-11 October 2008.