Fair Globalization for All: The Effect of Job Creation on Sustained, Inclusive and Equitable Economic Growth

A Background Paper

By: Sandy Mudiyanse

  1. Abstract

The recent job crises all over the globe have resulted in a more critical view of globalization and its reportedly negative impact. Globalization refers to economic integration and the transfer of policies across borders and the transmission of knowledge. According to the Organization for Economics Cooperation and Development (OECD) and the IMF definitions both refer to growing economic independence through trade.[i]

  1. Description and Definition of the Issue

The global crises have left countries and their populations more vulnerable to external shocks and economic insecurity and globalization has also accompanied by alarming rise of inequality both within and among countries. In the past two decades, the crisis in Scandinavia in the 1990s, Asia and the Russian Federation in 1997-98, Brazil in 1999, Ecuador in 2000, Argentina and Turkey in 2001 and Uruguay in 2002 have shown that the risks associated with economic and financial integration pose potential dangers for developing countries. In the aftermath of the global economic and financial crisis, the right to work has been compromised as employment opportunities stagnate. Nations are thus facing the question of how to boost economies. One strategy focused upon is job creation.Job creation is one of the main solution and one of the 8 millennium goals. It can contribute to economic growth, increase the availability to revenue.[ii]

  1. Glossary of the Issue

Organization for Economics Co-operation and Development-The mission of the Organization for Economic Co-operation and Development (OECD) is to promote policies that will improve the economic and social well being of people around the world. The OECD provides a forum in which governments can work together to share experiences and seek solutions to common problems. They work with governments to understand what drives economic, social and environmental change. They measure productivity and global flows of trade and investment.

International Monetary Fund- Is an organization created for Promoting global monetary and exchange stability, facilitating the expansion and balanced growth of international trade and assisting in the establishment of a multilateral system of payments for current transactions.
The IMF plays three major roles in the global monetary system. The Fund surveys and monitors economic and financial developments, lends funds to countries with balance-of-payment difficulties, and provides technical assistance and training for countries requesting it.[iii]

Article 23 of the Universal Declaration of Human Right – It explains that everyone has the right to work. Article 23 further articulates that everyone has the fundamental human right to choose their place of employment, receive equal pay for the same work being performed by others (which is further commensurate with cost of living in their country), and also to join unions as a way to ensure their rights are protected in the workplace.[iv]

International Labor Organization- It aims to decreaseunemployment through the Global Jobs Pact. The pact was concluded in 2009 between Member States, workers’ and employers’ organizations as a tool to enable states to create a “set of balanced and realistic policy measures that countries, with the support of regional and multilateral institutions, can adopt to ease the impact of the crisis andaccelerate recovery in employment. The policies focus on five key actions: generating employment, extending social protection, respecting labor standards, promoting social dialogue, and shaping fair globalization.

  1. History of the Issue

Scandinavian Crisis 1990s-The Scandinavian financial crisis of the early 1990s followed a period of financial liberalisation in the 1980s. These policies included liberalisation of bank lending volume, removal of interest rate caps, modernization of bank capital requirements, and the introduction of relatively high-risk financial products.This liberalisation caused a rapid expansion in the volume of bank loans. According to calculations by the International Monetary Fund, the cumulative fall in real gross domestic product over the crisis period was greater for Sweden than for its neighbor (5.3 per cent versus 0.1 per cent). Loan losses in the peak crisis year amounted to 2.8 per cent of GDP in Norway and 3.8 per cent in Sweden.

Russian Federation Crisis 1997-98 - The Russian financial crisis of 1998 marked a watershed moment in modern economic history. It was the first time since the chaos of the Great Depression that a major, western, industrial country faces the prospect of imminent economic collapse and a default on its sovereign debt. The Russian financial crisis of 1998 can be attributed to the overvalued peg of the Russian ruble, the unsustainable debt accumulation of the government and the external economic shocks that occurred due to the Asian financial crisis of 1997-98. Moreover, the mains reasons of crisis was the underlying weaknesses in the Russian banking system, the power of the 'Financial-Industrial Groups' and the systems of tax evasion, non-payments and arrears which all stemmed from the faulty and corrupt reform movement that characterized the break-up of the Soviet Union and the collapse of the command economy lead to the major crisis.

  1. Current Status

The recent slowdown in growth, the world economy is likely to create only half of the 80 million jobs needed over the next two years to reach the pre-crisis employment rates. International Labor Organization (ILO) baseline projections suggest a further increase in global unemployment up to 200 million in 2012 (of which about 75 million youth and 84 million female) and 206 million in 2016. Women are disproportionately represented in work situations.Women face the risks of short hours, low pay and limited access to benefits. Precarious work is a key factor contributing to the global pay gap between men and women.

Globally, the impact of the crisis was particularly harsh on youth. The lack of quality job opportunities for young people in the richest economies, as well as in the poorest countries where labor force growth is higher, is striking.

Migrants were estimated at 214 million in 2010, 60% of which moved to developed countries, although their flows into developed countries have been falling since 2008, while their unemployment rates have risen more sharply than those of citizens.

  1. Conclusion

A fair chance for a good job is critical for the majority of individuals and their families. For households, the productivity and the quality of work are major determinants of lifestyle, affecting nutrition, education and health. For society, an adequate supply of opportunities for productive and decent work.Lastly,work is particularly important for the poor, whoselabor is often their only asset and primary route to poverty eradication which one of the main UN Millennium Goals.In conclusion, questions to be considered by the delegates are How trade agreements impacts on employment?, What improvements can be made to encourage the global economy? And how might women's economic role be expanded through more job markets.[FF1]

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[FF1]Where are the citations?