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International Labour Organization

Report of the ILO Director-General, Juan Somavia

Working out of Poverty

International Labour Conference

91st Session 2003

International Labour Office - Geneva

This Report may also be consulted on the ILO Internet site:
http://www.ilo.org/public/english/standards/relm/ilc/ilc91/pdf/rep-i-a.pdf
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Abstract

Working out of Poverty

Somavia presents new anti-poverty proposals to ILO annual conference
- Friday 6 June 2003 ( ILO/03/26 )

GENEVA (ILO News) - Global efforts aimed at cutting poverty in half by 2015 will fail unless new ways are found to create opportunities for the world's poor to work for a decent living, says Juan Somavia, Director-General of the International Labour Office (ILO).

"As things stand today", Mr. Somavia warns in a new ILO report entitled Working out of Poverty1, "the Millennium Development Goals remain out of reach. But we have a solution - the way out of poverty is work."

"The persistence of poverty is the moral indictment of our times", Mr. Somavia says. "While there are some signs of progress, the fact remains that never have we seen so much wealth while so many continue to live in abject poverty."

Mr. Somavia is to launch a debate on ways out of global poverty when he formally presents the report to the Organization's annual meeting of some 3,000 government, worker and employer representatives here on Monday, 9 June. He will call for new global partnerships to support national efforts against poverty.

"We know that work is the best route out of poverty", Mr. Somavia says. "But we cannot legislate employment in and poverty out. It is a long and complex process requiring all elements of society to work together. We must harness the unique power of governments, employers and workers - the global community of work represented by the ILO's constituents - to a concerted global drive against poverty."

"The poor have enormous reserves of courage, ingenuity, persistence and solidarity that helps them get through the each day on less than the equivalent of $2", Mr. Somavia said. "Instead of waging war on poverty from the top down, the multilateral system must find ways of tapping into this unused potential. In many ways, the working poor are the ultimate entrepreneurs."

A key to this is to empower the poor themselves, ensuring that they have a chance to obtain jobs, exercise their right to organize and enjoy social protection. It also involves a massive effort to promote and sustain small businesses that create the bulk of the world's jobs today, Mr. Somavia says.

World poverty at a glance

Mr. Somavia's report paints a grim picture of poverty today, affecting half the global population and every country in the world. Among the nearly 3 billion people living on less than USD$2 a day, the report says some 1 billion - or about 23 per cent of the developing world's population - struggle along on USD$1 a day or less. Other poverty figures:
  • Official unemployment - currently at some 180 million people worldwide and growing - is at its highest point ever. This, however, masks an even larger cadre - over a billion people working without fully utilizing their creativity or maximizing their productive potential;
  • The world's labour force is increasing by about 50 million people each year, as the number of entrants exceed those who stop working. 97 per cent of this increase is in developing countries;
  • The "income gap" between the wealthiest and poorest fifths of the world's population is growing. In 1960, it was 30 to 1. By 1999, it had widened to 74 to 1;
  • Women and girls are more likely than males to become trapped in poverty. Two-thirds of the female workforce of the developing world are in the informal economy, mostly doing the lowest paid work;
  • Over the next 10 years, over 1 billion young people, today aged between 5 and 15 will enter the working age population. However, the global economy is not well organized to make full use of the enormous potential of their skills, energy and ambition;
  • Poverty is a global phenomenon occurring in every society. Even in the 20 most industrialized countries, over 10 per cent of the population live below a poverty line of less than 50 per cent of median income.
Regionally, poverty trends vary. On the positive side, declining poverty in China and other East Asian countries in the 1990s significantly reduced the number of persons living on very low incomes, from 1.1 billion to about 900 million. In South Asia, the number of people living in poverty remains more or less stable at about 1.1 billion, although population growth now makes this a smaller share of the population.

The situation elsewhere is another story, the report says. Slow growth in sub-Saharan Africa in the 1990s elevated the number of people living in poverty by 25 per cent, to nearly 500 million. During the same period, the number of people living in poverty in Latin America and the Caribbean increased from 121 million to 132 million, with a quarter of the population still subsisting on USD$2 a day or less. In the Middle East and North Africa, the number of people living at or below that line rose from 50 million to nearly 70 million, while in Eastern Europe and Central Asia, the number increased three-fold to 97 million.

"If the poorest people living in the poorest countries were polled today, I doubt if they would report any major recent improvement in their lives", Mr. Somavia says.

The decent work dividend

In his presentation, Mr. Somavia calls poverty "the biggest challenge to multilateralism today. As the multilateral system continues to be tested on classical security issues, we simply cannot fail on issues of human security".

The ILO, he says, is well positioned to meet this challenge by mobilizing what he called "the community of work" - its government, employer and worker constituents - globally and especially at the national level.

"After all, the poor don't cause poverty", he says. "Poverty results from structural failures and ineffective, out-dated economic and social systems. Poverty grows from inadequate political responses, bankrupt policies and insufficient international support. And its continued acceptance expresses a loss of fundamental human values, of international will."

The solution lies in adopting policies that produce what Mr. Somavia calls a "decent work dividend" that will stimulate balanced and more sustainable growth for countries and better lives for people.

"This decent work dividend involves providing more stable incomes and productive employment", Mr. Somavia says. "The ILO is doing this with programmes designed to create jobs, ensure basic rights and social protection at work, end discrimination and fight child labour. These also aim to provide access to financial services, skills development and training, healthier and safer work environments and more entrepreneurial opportunities for small businesses."

"This isn't a dividend just for the poor. It benefits governments and employers as well", Mr. Somavia says.

To implement this approach, the ILO Director-General is to urge the tripartite delegates to the annual Conference to discuss four "tools" for poverty eradication:
  • First, creating jobs: "Poverty elimination is impossible unless the economy generates opportunities for investment, entrepreneurship, job creation and sustainable livelihoods";
  • Second, guarantee rights at work: "People in poverty need voice to obtain recognition of rights and demand respect. They need representation and participation. They also need good laws that are enforced and work for, not against, their interest. Without rights and empowerment, the poor will not get out of poverty";
  • Third, provide basic social protection: "Poor people are unprotected people. The earning power of those living in poverty is suppressed by marginalization and lack of support systems"; and,
  • Fourth, promote dialogue and conflict resolution: "People in poverty understand the need to negotiate and know dialogue is the way to solve problems peacefully."
"Breaking out of poverty is really about breaking into a new cycle of opportunity and local wealth creation", Mr. Somavia says. "Employment, and the promotion of enterprise that creates it, remains the most effective route to poverty eradication."

"We must provide work - work that expands choices of a better quality of life, work that creates wealth that can be distributed fairly, work that sends children back to school and ensures that everyone who wants or needs a job can have one", Mr. Somavia says. " The poor need a decisive commitment from us if they are to find a dignified way to work out of poverty. We cannot let them down."


Footnote:
  1. Working out of Poverty, Report of the Director-General, International Labour Conference, 91st session, International Labour Office, Geneva, 2003. ISBN 92-2-112870-9. Price: 20 Swiss francs.



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