New jobs crucial for faltering economy, Annan says

UN Secretary-General Kofi Annan and ILO Director General Juan Somavia said terrorist attacks have damaged the world economy Keystone

Government and business must create jobs to bolster the terrorism-weary world economy, UN Secretary General Kofi Annan said in Geneva.

“The impact of September 11 is now reverberating around the world,” Annan told the Global Employment Forum on Thursday. The economic impact of the terrorist attacks has meant the loss of countless jobs, and a heavy financial toll.

“Nobody can forecast with precision the economic and social consequences, but we already know that poor economies will pay the highest price,” he said.

“We don’t how serious the crisis will be, nor how long it will last,” says Juan Somavia, director of the International Labour Organization, which arranged the forum.

The message the ILO would like to see coming out of the three-day meeting is that stimulating growth is the only way of reversing the downward trend.

The Geneva-based ILO is predicting that 24 million jobs are at stake around the world, and that industries like tourism, aviation and insurance – all important in Switzerland – are likely to be hardest hit. In the past week, the ILO has held crisis meetings to discuss the upheavals in these sectors as a result of the attacks on America.

It has warned that nine million workers in the global hotel and tourist industries could lose their jobs, and that a further 200,000 jobs have gone or will go in the airline business. The organisation added that it will take years for revenue in these industries to return to its pre-September 11 levels.

Coordinated response

The Global Forum, the ILO’s follow-up to last year’s UN Social Summit in Geneva, was organised well before the attacks on the World Trade Center and the Pentagon, and Juan Somavia feels September 11 should not be allowed to distract attention from the goal of economic recovery.

“One incident does not change the world. We still need a coordinated global response,” the ILO chief says. “If not, it’s a recipe for disaster. There is a serious risk of insecurity.”

The head of the labour department at the Swiss Economics Ministry, Jean-Luc Nordmann, says that while consumer confidence may have taken a big hit in the wake of September 11, the attacks may succeed in persuading decision makers to work more closely.

As for Switzerland, Nordmann predicts that unemployment will jump from its current figure of around 1.8 per cent to 2.2 per cent. The tourism sector will be especially badly affected, with losses of around SFr1 billion.

He told swissinfo that Switzerland, like other countries, should beware of the danger of adopting protectionist measures: “We must keep markets open. There is a positive link between trade and employment,” Nordmann says.

Even before the current turmoil, the ILO was warning of social and economic instability around the world if the estimated 500 million people who were expected to join the labour market over the next decade could not find decent jobs.

“Investors rely on consumer confidence, and consumer confidence relies on jobs. The reactivation of the economy all boils down to employment,” Somavia says.

The ILO considers itself an ideal forum to come up with strategies to cope with the economic crisis, since it is the only international body that includes all the actors in the “real economy” – governments, employers and trade unions. It is also fights the corner of the developing world.

“The industrialised countries have already taken measures to deal with the crisis. But it won’t only affect those states. The rest of the planet simply doesn’t have the means to cope,” Somavia warned.

Protectionist temptation

The employment forum comes just a week before the World Trade Organisation (WTO) ministerial conference in Doha, and Somavia is hoping that any new round of trade liberalisation negotiations that might be launched at that meeting will do more than the previous Uruguay round in taking into account the needs of poorer countries.

“If their needs are not considered, I don’t hold out great hopes for Doha. It mustn’t concentrate on the wishes of the richest countries,” the ILO chief says, adding that the WTO must give a clear signal that growth and open economies are the best way out of the crisis.

“The developed world must resist the temptation to close itself off. We must not give in to protectionist tendencies,” Somavia says.

by Roy Probert