The global economy is on the verge of a new and deeper jobs recession that may ignite social unrest, the International Labour Organization (ILO) has warned. It will take at least five years for employment in advanced economies to return to pre-crisis levels, it said.
The ILO also noted that in 45 of the 118 countries it examined, the risk of social unrest was rising. Separately, the OECD research body said G20 leaders meeting in Cannes this week need to take bold decisions.
The Organisation for Economic Co-operation and Development said the rescue plan announced by EU leaders on 26 October had been an important first step, but the measures must be implemented promptly and forcefully.
The OECD's message to world leaders came as it predicted a sharp slowdown in growth in the Euro zone and warned that some countries in the 17-nation bloc were likely to face negative growth.
In its World of Work Report 2011, the ILO said a stalled global economic recovery had begun to dramatically affect labour markets. It said approximately 80 million net new jobs would be needed over the next two years to get back to pre-crisis employment levels.
But it said the recent slowdown in growth suggested that only half the jobs needed would be created.
We have reached the moment of truth. We have a brief window of opportunity to avoid a major double-dip in employment, said Raymond Torres from the ILO.
The group also measured levels of discontent over the lack of jobs and anger over perceptions that the burden of the crisis was not being fairly shared. It said scores of countries faced the possibility of social unrest, particularly those in the EU and the Arab region.
Meanwhile, in its latest projections for G20 economies, the OECD forecast growth in the Euro zone of 1.6% this year, slowing to 0.3% next year. In May, it had forecast growth of 2% per year in both 2011 and 2012.
It also cut its growth forecasts for the US to 1.7% in 2011 and 1.8% in 2012. It had previously expected growth of 2.6% and 3.1% respectively.
For Japan OECD forecasts negative growth this year, 0.5% turning to positive 2.1% in 2012. While for China the estimates are 9.3% and 8.6%.
The organisation called for G20 leaders, who meet on Thursday and Friday, to act quickly.
Much of the current weakness is due to a generalised loss of confidence in the ability of policymakers to put in place appropriate responses, the OECD said.
It is therefore imperative to act decisively to restore confidence and to implement appropriate policies to restore longer-term fiscal sustainability.
It also called for the Euro zone to cut interest rates. (BBC)