ILO: Africa Has Weathered Global Economic Crisis

12 Oct 2011

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By Linda Eroke

Director General, International Labour Organisation (ILO), Mr. Juan Somavia, yesterday said Africa has weathered the global economic and financial crisis better than other continents. Somavía told the ILO African Regional Meeting, which started yesterday in Johannesburg, South Africa that the continent had recorded tremendous growth rate in export and foreign investment.

He, however, told delegates from governments, employers and workers, as well as representatives from other inter-governmental organisations gathered at the meeting, that more needed to be done to create decent jobs and reduce poverty.

This, he said, was especially important against the background of the crisis in the Euro-zone, Africa’s main trading partner, and with global growth in the second half of 2011 significantly down, leading to worries of a new global recession.

“The global growth model developed in the last 30 years has not served Africa or the world well as demonstrated by the current crisis. It is not efficient in generating sufficient productive, formal, decent jobs, in reducing inequality, in improving working conditions, in sharing benefits. It wound up producing an unfair, unbalanced and unsustainable globalisation,” he warned.

He called for a change of course and outlined six policy challenges, adding that some African countries needed more efficient growth and employment strategy, which does not measure success by growth alone but by the roles played by Small and Medium Enterprises (SMEs) in delivering employment is key.

He observed that experience from the crisis had shown that SMEs can make a difference and be an engine of growth, job creation, and sustainable livelihoods.

He stressed the need for governments to promote productive investments in the real economy warning that  a return to austerity would not be a sustainable policy answer.

According to him, there is need for balance between polices that create jobs, produce real growth and demand, keep basic social protection, and generate fiscal income that will allow the debt to be repaid.

“Ultimately, we need to put productive investment in job-generating sustainable enterprises in the driver’s seat of the global economy,” Somavía said.

He added that the financial system must concentrate on providing resources needed for innovation, investment trade and consumption and not on “casino options in short or long selling and obscure financial products. There is too much concentration on how to give confidence to financial operators and too little on how to retain the trust of citizens.”

President of South Africa, Mr. Jacob Zuma, who attended the opening session, underscored the importance of the ILO’s Decent Work agenda in leading to sustainable development. He said his government’s policies “clearly spell that our most effective weapon in our campaign against poverty is the creation of decent work.”

Tags: ILO, News, Nigeria, Featured, SMEs, Economic Crisis

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