Wrapping up his visit to Egypt, Director-General of the International Labour Organisation told Nermeen Abdel-Fattah about the importance of labour in stimulating growth in the economy, alleviating security risks and decreasing social instability What is the purpose of your visit to Egypt? My visit has two purposes -- first, to participate in the Labour and Social Affairs Commission Ministerial meeting. It is a very important commission of the African Union and played an important role in launching the Summit of the African Union on Poverty and Employment. I also had the opportunity of talking with the prime minister this morning, as well as with the labour minister and heads of employer organisations and trade unions. Can you give me the gist of your discussions with them? With the labour minister and employers and workers, we discussed the key function of social dialogue: dialogue as a way of helping to formulate policies, to resolve conflicts, and to find common interests. This is relevant in Egypt, especially with the current reforms. Reforms always generate different types of effects; so dealing with both the formulation of policies and their consequences is crucial. With the prime minister, we discussed a more global perspective. First of all, I noted the importance of conceiving the whole reform process as a balance between economic and social policies. There have been many structural reforms in countries in the past, and the social cost has been very high. The government's approach is that you have to take this into account, and that you have to see how you can go about balancing one thing with the other. This led us to discuss the issue of employment: the quantity and quality of work, and the fact that we are living at a time still very much determined by microeconomic policies. These produce growth, but a growth that does not produce enough jobs. We have to be able to significantly increase job-intensive growth. Were you in agreement concerning these issues? Yes. We need to have a more global look, because the macro-economic policies being pursued do not take employment sufficiently into account. You once said in the past that you don't approve of the "Washington consensus". What about now? I think that the Washington consensus is over, but its effects are still there. Now there is obviously a realisation that you cannot simply undergo reform whatever the social cost. That happened 20 or 25 years ago, and that is the experience of many Latin American countries, when you were told: "do it quickly, do it rapidly, it's going to hurt, but you will see that at the end you will solve the problems." The main issue is that, yes, the structural reforms were necessary at the end of the 1970s and the beginning of the 1980s, because most of the global economy was out of sinc and we had a very high inflation level. So you needed to put that into place. That has now been resolved but current policies dealing with new problems have not changed. Back to your discussions with the prime minister: did you agree on anything specific? No, we agreed on the overall perspective. We discussed the importance of social dialogue. In a process of reform, social dialogue plays a crucial role, and I put the ILO at the disposal of the government in order to look precisely at all of these balances. The key point is that we need dialogue on one hand and balanced policies on the other so that we can discuss and address individual issues. What about the roundtable discussions you'll be having with a number of Egyptian ministers today? It's being organised by the Ministry of Manpower and Migration and the economic centre headed by Samir Radwan. For myself, it is more of a learning opportunity to understand the experience Egypt is going through in more detail. Experience in reform or in creating jobs? The whole thing: in reform, jobs and the integration of economic and social policies. The ILO sees employment as the main route out of poverty. However, according to the World Summit results last September, this solution seems unsuccessful. Because growth is not creating enough jobs. That is the problem, the reason why the poverty target is not being met. The linkage between jobs and poverty is real -- if we don't have jobs, then we can't reduce poverty. Ask any person in the street how he can get out of poverty and he will tell you to give him a fair chance and a decent job. People want the challenge of work, people want the dignity of work, people are not looking for handouts to subsist. They are looking for work in order to be a person, to be an individual, to have a dignified life. Could the concepts of decent work and social dialogue jointly help to alleviate poverty? Alleviate poverty, stabilise societies, and reduce security risks. It's not only linked to poverty, but rather to the quality of work you want. We've developed the ILO Decent Work Agenda, which places importance on workers' rights, social protection, job creation and enterprise creation. What happened is that when we went outside of the ILO with this vision, we connected with people, with politics and with enterprises. People said, "This international organisation understands my problem. This is exactly 'Give me a fair chance and a decent job'." We connected with politics, because there is no politician in the world today that can go to an election without talking about jobs. It simply doesn't happen. But the vision also connects with enterprises because the ILO is outlining the problem of employment and discussing the quality of work, in which the enterprise plays a very important role. So we must be saying something right, but we don't necessarily have all the answers. We need to work together with all the international organisations: with the International Monetary Fund, the World Bank, the WTO, other specialised agencies, and with the UNDP. But this is not happening, and I think that this is a major failure of the multilateral system. But isn't there a framework agreement by which all the UN agencies meet the Egyptian government? Yes, but it does not discuss how to ensure that growth produces more jobs. And why is this not happening? Because some institutions, mainly the Bretton Woods institutions, are still caught up in the idea that sound macroeconomic policies will create jobs. And after 25 years of experience, we know that this is not so. So, we have to concentrate directly on job creation, in which other institutions play an important role. But it has to be done in a sound macro-economic framework, so we have no option but to work together on the issue. And this, from my point of view, is a major failure of the multilateral system today. We are unable to join and meet the most important demand of the people, which is: "give me a fair chance and a decent job". I know that you have an unfavourable view of the model of globalisation we have right now, making the rich richer and the poor even poorer. Yes. Since the present model of globalisation is producing growth without jobs, that's the product. When you don't create jobs, you have less consumption. If you have less consumption because people are poor, this increases poverty. But imagine you had more jobs, then you have more consumption; more consumption produces more demand, and more demand produces more investment. Because more people are working, they can contribute more to the pension system, and part of their salaries can go to taxes that can be used for social purposes. Jobs are at the heart of an economic model that can make the switch from growth that produces income inequality to growth that itself generates greater growth and equality. And that's why I say: job creation is not just a good social policy, it's a very sound economic policy. But we have to put it in an integrated package of policies. And we shouldn't declare economic success simply because our economy grew. Because looking at it from the perspective of an individual, people go and vote, and they vote for jobs, and then a year later, the statistics come back and say: "We grew, we had big success," and people say: "Great, but where are the jobs?" This is directly related to the functioning of the political system. Is President Mubarak's promise to create 4.5 million jobs over the next six years feasible? I think that putting jobs at the heart of policies is a very important thing. It is priority number one, and this is exactly what the ILO has been trying to say for some time. But if we don't have greater global agreement that the present policies-global policies-are not generating enough jobs and job-intensive growth, then that puts an enormous weight on each individual country. You believe it has to be done globally? We need to shift. When you mention "the Washington Consensus," you should note that the Washington Consensus does not give enough importance to jobs. We now need the Bretton Woods institutions to cooperate with other organisations, generating policy proposals that are more involved in the job creation arena. What about the YEN (Youth Employment Network) initiative, is it progressing? It's progressing because countries have moved forward in studying the linkage between the educational system and job creation. We now have much more information and data on jobs that actually exist, for which we may not yet have the competence necessary. But I think that the key question here is almost an ethical one. The reality in the world today is that youth unemployment is two, three, and sometimes four times the rate of adult unemployment, and adults run the employment policies. Adults are telling youth that new jobs are for themselves. What is the ILO doing to relieve the suffering of Palestinian workers? The ILO is the only institution that does a yearly analysis of the situation of Palestinian workers in the Arab occupied territories. We have just finished the report, and I will present it to the conference (of the ILO). What else do you do to help the Palestinian workers? We have a number of policies within our sphere, but the report is very important. The funds to do things come from where? From the World Bank, from the donors, they don't come from the ILO. We put the knowledge on the table, and then we work with our counterparts, reinforcing the employers, reinforcing the worker organizations. We have them set up a fund for employment creation, which they then also run. What do you think of the view that terrorism and violence are fuelled by unemployment and poverty? It's not possible to make a direct linkage between poverty and acts of violence. But if we continue to have growth without jobs, certainly this is going to become one of the biggest security problems. This is not because of violence, but simply because society is not going to tolerate more poverty and more unemployment. So, the biggest political question today is: how are we going to create decent work? This is essentially at the heart of politics today and if we don't solve the employment problem, we are creating the biggest security issue that the world has seen. It's a security issue fundamentally because it destroys society. When you destroy the dignity of a human being and do not permit that person to have a decent job, you are destroying the soul of your society.
