MercoPress. South Atlantic News Agency

Financial meltdown could increase jobless by 20 million

The global financial crisis could increase world unemployment by an estimated 20 million women and men, the Director-General of the International Labour Office (ILO) said on Monday.

"We need prompt and coordinated government actions to avert a social crisis that could be severe, long-lasting and global" added Director General Juan Somavia. Based on revised global growth estimates by the International Monetary Fund, the UN and early reports suggesting rising job losses for most countries where data was available, ILO preliminary estimates indicate that the "number of unemployed could rise from 190 million in 2007 to 210 million in late 2009." Mr. Somavia added that "the number of working poor living on less than a dollar a day could rise by some 40 million – and those at 2 dollars a day by more than 100 million". Mr. Somavia also said that the current crisis would hit hardest such sectors as construction, automotive, tourism, finance, services and real estate. He also noted that the new projections "could prove to be underestimates if the effects of the current economic contraction and looming recession are not quickly confronted". "This is not simply a crisis on Wall Street; this is a crisis on all streets. We need an economic rescue plan for working families and the real economy, with rules and policies that deliver decent jobs. We must link better productivity to salaries and growth to employment", Mr. Somavia said. "Protecting and promoting sustainable enterprises and decent work opportunities must be at the heart of the Summit on the Financial Crisis recently announced by Presidents Bush and Sarkozy", he added. "We must return to the basic function of finance, which is to promote the real economy. To lend so that entrepreneurs can invest, innovate, produce jobs and goods and services." Mr. Somavia said his concerns included restoring credit flows; maintaining and enhancing social protection, including pensions, unemployment benefits, child support and health care schemes; ensuring enterprise access to credit to avoid layoffs, wage cuts, bankruptcy and permit recovery, respect for workers' rights and deepening social dialogue to deal with the impact on enterprises; ensuring ODA flows; rebuilding a regulatory regime for global finance; and moving quickly from recovery to sustainable development through investment and growth. "We welcome the current calls for better financial regulation and a global surveillance system of checks and balances, but we must reach beyond the financial system", the ILO Director-General said. "Long before the current financial crisis, we were already in a crisis of massive global poverty and growing social inequality, rising informality and precarious work – a process of globalization that had brought many benefits but had become unbalanced, unfair, and unsustainable", he said. "We need to get the balance right and concentrate on rescuing people and production. It's about saving the real economy." "In order to keep open economies and open societies going, we must begin working together among relevant international organizations to develop a new multilateral framework for a fair and sustainable globalization. Trade talks are stalled; financial markets are on the brink, climate change continues; any reconstruction will have to find ways to integrate financial and economic, social and labour and environmental policies in a common sustainable development approach", he said. "This is the time to think and act in bold and innovative ways to confront the huge challenges before us, particularly for the United Nations", Mr. Somavia said, referring to the forthcoming meeting next weekend of the United Nations Chief Executives Board (CEB) chaired by the Secretary-General Ban Ki-Moon