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The 98th International Labour Conference
Geneva 11 June 2009

The 98th International Labour Conference
Geneva 11 June 2009
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Ladies and gentlemen,

Ninety years after the ILO arose from the ashes of World War I, it has taken another crisis of historic proportions to bring this organisation to the centre stage of international affairs. That is where it belongs – because international affairs ultimately deal with the interests of people. And we decent jobs matter to the lives and self esteem for all of us.

We are learning day by day: no serious economic, social and labour market challenge can be tackled at the national level alone.

We have leaned how greed and mismanagement anywhere can be a threat to working men and women everywhere. In response, collective and more coherent international action is needed, across institutional barriers.

Within the limited time available, I would like to make three points:

First, let the market may be a good servant, but not a dominant ruler. Nine months after the fall of Lehman Brothers, it is now abundantly clear that the root cause of the crisis is not to be found in the US subprime mortgage markets alone.

There were other global imbalances, particularly in trade and finance, which caused the fire to flare up.

In short – we also witnessed a change in the balance of power of labour markets.

While supply and demand are important for market outcomes, so is regulation of rights and obligations.

As we know from longstanding experience in Norway, effective promotion and protection of workers’ rights are crucial in order to ensure fair and sustainable outcomes in labour markets.

Globalisation, driven by the twin revolutions of technology and deregulation, led to a welcome global integration that included major emerging economies.

True, this process has helped to lift millions out of poverty and into work. The result, however, was a rapid increase in the global supply of labour, and in many countries a significant shift in the balance of power between labour and capital – in favour of the latter. This trend was reinforced by insufficient regulation of labour markets, including the failure to promote and protect workers’ rights.

So as a result, while globalisation provided millions with jobs and income, there was a huge gap between their earnings and their social rights, and the great leap in global profits during the same period.

The policy of sustained low interest rates served to cushion the decline of a huge middle class in the short term. Cheap credit also softened the fall for workers in industrial countries. Many could maintain their purchasing power not only through access to cheaper goods, but also by using their homes as ATM machines.

Today it is easy to conclude: Such a state of affairs could not last. This form of de-regulated globalisation was neither morally acceptable, nor politically or economically sustainable. As Director General Somavia puts it, warnings were given as early as 2004 by the World Commission on the Social Dimension of Globalization, established by the ILO.

Now is the time to learn, sum up and look ahead – seeking an appropriate and necessary consensus on the way forward.

This leads me to my second point:

The ILO and the Decent Work Agenda are tailor-made to help protect the livelihoods of ordinary people from casino capital and misguided markets.

Although there are still too many people working in the informal sector, formal employment is the most important source of livelihood and dignity for the vast majority of people, everywhere.

The ILO Declaration on social justice for a fair globalisation last June sent a strong message: Neglecting workers’ rights – either as a strategy for protectionism or to improve competitiveness - is neither acceptable nor wise, if the goal is to build a dynamic and modern economy.

History has all the necessary lessons: Those countries who invest in human capital and treat working people – women and men alike – as a key resource are the ones who prevail. Workers’ rights and labour standards are vital for real democracy and self determination.

In ILO’s terms: social dialogue – tripartism of workers, employers and governments – foster cooperation and the legitimacy of economic policy, on the national as well as the international level.

Evidence is compelling: Social protection lifts the burden of adjustment, from the individual worker or company to society at large.

In other words, the ILO and all of us gathering to support its agenda hold a key to maintaining an open world economy. We look forward to the high level discussions next week on the ILO’s Global Job Pact, which aims at promoting job creation and social protection as the way forward.

My third point is this:

Governments, in a broad dialogue with the stakeholders of the international economy – employers and workers alike - must take a lead role in ensuring that the international community does not repeat the mistake of ignoring the ILO and its important message.

Based on the ILO social justice declaration, and on our own experiences in Norway, my government launched a 7-point strategy to strengthen worker’s rights world wide.

Last September, I hosted an international conference in Oslo, together with the leaders of Norway’s social partners, trade unions and business leaders. Director General Juan Somavia and WTO Director General Pascal Lamy were among the 250 participants from more than 30 countries, who came together to discuss the groundbreaking ILO Declaration on Social Justice for a Fair Globalization. At the conference, we pledged an extra effort to promote women’s economic empowerment – in the context of the MDG3 torch campaign initiated by Denmark.

In short: Efforts to improve the situation for women in the labour market must continue to be strengthened, and not undermined, during the ongoing financial crisis.

Let me conclude as we did in Oslo last fall: Key to our success on this agenda is to secure better coherence across all relevant institutions. There must be better consistency in terms of policy emphasis from governments and institutions. What we preach at the ILO must be consistent with what we preach at the WTO, IMF and World Bank – and vice versa. We need relevant forums to ensure such coherence, both at national and at international level. Because coherence cannot be partial – that would truly be a contradiction in terms.

A coherent approach to the Decent Work Agenda not only concerns matters of labour and trade. It is also relevant for other pressing global issues, such as human rights and our fight against climate change.

Globalisation means that interdependence is growing – giving weight to the argument that everything is connected. A coherent approach in dealing with all the global challenges is as important as ever. And what we need to meet those challenges coherently is the commitment of our world’s perhaps most valuable renewable resource: Political will.

I am pleased to say that this initiative has gained momentum. At lunch today, we are holding a follow-up event to take this agenda forward, this time in cooperation with South Africa and Germany.

I hope to see you there.

In the follow up we also need to see a strengthening of the capacity of the international system to follow up, monitor performance and hold governments and partners accountable. Such a vision for the international system in the age of globalisation must be an integral part of our efforts.

And a noble task to pursue.

Thank you