Dr. Rabiei in ILO ASPAG Meeting: Economic Growth Devoid of Sound Policies Unable to Guarantee Equal Opportunities for All

Iranian Minister of Cooperatives, Labour and Social Welfare and the Chairman of ILO Asia and Pacific Group said: “The economic growth devoid of sound and rational policies is unable to ensure equality of opportunities and treatment for more vulnerable groups such as women and the youth. Therefore, self-employment needs to be taken into account as a key objective within the context of macroeconomic policies, and not merely the outcome of economic growth.”
Dr. Rabiei said, “Productive employment and decent work are real headaches of policymakers all over the world. Developing countries have experienced decades of hard efforts to harvest the fruits of macroeconomic policies, prescribed under “The Washington Consensus”, mostly concerned with achieving financial and budgetary discipline, price stability, trade liberalization and deregulation, and capital account controls; however, not all initiatives ended happily. The global economic crisis was another reality in the same course of events that affected almost every part of the world, developed or developing countries, and in many cases resulted in an unemployment rate increase and harsh employment conditions. Indeed, it is true that the developed economies suffered more seriously in the global financial meltdown in terms of unemployment growth, but the big concern for developing countries is setbacks in achieving goals caused by the crises. Besides, political and economic instability are deeply interconnected with high unemployment rate and absence of an enabling environment for decent work in the developing countries, which in turn increasingly impede return to the path of development. Take for instance the unrests in north of Africa and the Middle East region that are basically flared up due to lack of decent work for the youth. Notwithstanding rapid GDP growth rate, in most cases, job scarcity and/or inaccessible job opportunities have been experience.
Insufficient capacity in creating decent jobs, even at the time of significant economic growth, brings about wide range of negative aftermaths for development, poverty alleviation and income distribution. It is important to recognize that economic growth that is only measured through GDP increase does not necessarily result in more development opportunities. Furthermore, the economic growth devoid of sound and rational policies is unable to ensure equality of opportunities and treatment for more vulnerable groups such as women and the youth. Therefore, self-employment needs to be taken into account as a key objective within the context of macroeconomic policies, and not merely the outcome of economic growth.
Structural adjustment programmes of 1980s and 1990s turned out to build the standard framework of macro economy that left a huge impact on our concept of macroeconomic policymaking, particularly with regard to three major topics: monetary policy, financial policy, capital account policy and foreign exchange rate. 

So, it is high time to review such restrictions in order to better adapt macroeconomic policies with the SDGs. The question here is to draw a macroeconomic policy blueprint that not only leads to growth, but makes achieving SDGs possible, including poverty alleviation and employment creation. It is critical to establish stability and to launch policy measures and reforms tailor-made for every country. We should specify customized policy instruments for a developing country facing massive shortage of resources. Achieving SDGs requires courtiers be able to create more sustainable resources for public investment and improve growth and employment at the same time.
Employment plays a key role in conducting economic growth towards effective poverty reduction. It means that economic growth by itself may not be able to reduce poverty, unless it is used as an employment engine with the capacity to provide people with more and equal opportunities. We should not disregard the fact that linkage between employment and poverty can realize both. On the one hand, the more employment is created, the better poverty will be tackled; and on the other, the less poverty, particularly extreme poverty, the more productivity will result in the long run.
Country-based policy design means to invest in countries’ own advantages, something referred to as endogenetiy; economic sectors that bring about not only the growth but also the employment at its highest capacity.
Also, we need a policy framework to face major restrictions and to provide a stable environment for development of sectors (disciplines). Certain key constituents that should be taken into account could be outlined as follows: Skills. Lack of skills hinders development of productive sectors and productivity growth. Teaching and learning systems should be adapted to needs of priority sectors in terms of skilled workers quality and quantity wise.
Finance system. The role of financial system in meeting the needs of private sector in terms of access to capital for productive investment. If an employment-centered sectoral strategy is to succeed, SMEs should be encouraged as a priority sector. They are indeed the backbone of entrepreneurship. To this end, the financial system needs to be revised and improved in order to face limited and costly access to credits.
Employment-friendly macroeconomic policy. One side of macroeconomic and trade policy framework is enabling incentives and supports to develop and reinforce priority sectors. It plays a sensitive role in allocation of scarce resources and diversification of production capacities. Public investment (transportation, communication, power supply infrastructures, education, health, ….), along with financial incentives, easy access to credits and a relevant foreign exchange system may enhance development of priority sectors and increase their competitiveness in global markets.’
Connection to the world market. Creating required opportunity and ground for connecting employment-intensive sectors to the world market in a way that their full potentials are unlocked according to high demands.

 

Jul 4, 2016 11:28

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