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Remarks Prepared for Delivery by
U.S. Secretary of Labor Elaine L. Chao
96th Session of the International Labor Conference
Palais des Nations
Geneva, Switzerland, Monday, June 11, 2007
The year 2006 marked an important economic milestone for the world's workers. It was the fourth consecutive year in which growth in developing countries exceeded 5 percent — a record never previously achieved.
The International Monetary Fund noted the "impressive growth performance" of developing countries. The World Bank reported the growth rate in developing countries in 2006 was 7.3 percent — well above the 2006 estimated average rate of 4 percent. The Organization for Economic Cooperation and Development (OECD) expects growth in the developing world to be between 6 and 7 percent in 2007 and 2008.
These achievements seem to contradict a central message of the report on "Decent Work for Sustainable Development," which is that workers in developing countries have not benefited from the growth of the worldwide economy. Without growth, there can be no job creation. And without job creation there can be no decent work. It is hoped that future ILO reports will place more emphasis on the responsibility of national governments to create the climate for growth and job creation within their own countries. Factors that favor sustainable growth and job creation include free markets, openness to trade, transparent and accountable institutions, and the rule of law.
The recent achievements by developing countries make it clear that market forces and trade liberalization have not been discredited. In fact, countries embracing market reforms and trade liberalization are showing the strongest growth, creating the greatest number of jobs, and lifting the largest number of people out of poverty. A recent World Bank study divided groups of developing countries into two categories: globalizers and nonglobalizers. Countries that have opened up their domestic markets and embraced trade liberalization have experienced growth rates in excess of 5 percent over the 1990s. The nonglobalizers, by contrast, had a cumulative growth rate over the 1990s of 1.4 percent.
Where there is progress, there will always be inequities that must be addressed. But focusing on static snapshots of inequality never gives a complete or accurate picture of development. Successful economic strategies provide a ladder of opportunities through which the poorest members of society can progress and better themselves. We would like to see more research devoted to upward mobility and identifying strategies that foster upward mobility.
We support the crucial importance of addressing the key issues mentioned in the Director-General's report: poverty, unemployment, the spread of HIV/AIDS, and the lack of access to social protection. The question is not if, but how, to achieve these goals.
Again, we believe that those countries with strong, sustainable, growing economies will be better equipped to address these concerns. Indeed, OECD experts have noted that "most of the evidence confirms that poverty reduction depends on the pace and pattern of economic growth."
The ILO can help support growth that unlocks the countless opportunities created by trade liberalization and energizing the private sector. Or it can advocate policies that lead to higher taxes on capital and labor, massive new borrowing and the certainty of severe cuts in services when growth fails to materialize.
Let me close by encouraging the ILO to continue to focus on the important areas in which it has a comparative advantage. Those areas include promoting democracy and workers' rights, developing coherent approaches to employment, and helping countries develop the capacity to manage a flexible, effective, and productive labor system, centered in the private sector. And we commend the Director General's emphasis on strengthening statistical measures of employment.
But serving as the advocate for education, broad-based social protection and health care is the mission of other UN agencies. The ILO has a clear mandate and should focus on that. Before it expands its portfolio, we hope the ILO will devote more attention and resources to strengthening the transparency and accountability of its current programs. As the oldest UN technical and specialized agency, ILO leadership on transparency and accountability can serve as a model for others in the UN system.
Thank you.
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