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Thursday, July 24, 2025

ILO director: No quick recovery for Caribbean economies

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20160221

Though the cur­rent down­swing in the eco­nom­ic for­tunes of Latin Amer­i­can and Caribbean coun­tries can­not rate in shock val­ue against the glob­al, eco­nom­ic "heart-at­tack" of 2007-2008, for some it can prob­a­bly be likened to the on­set of chron­ic, silent killers such as hy­per­ten­sion and di­a­betes.

In­ter­na­tion­al Labour Or­ga­ni­za­tion (ILO) re­gion­al di­rec­tor for Latin Amer­i­ca and the Caribbean, Jose Manuel Salazar, would pre­fer a com­par­i­son to "a very strong cold or in­di­ges­tion", with the prog­no­sis be­ing for slow, sus­tained con­trac­tion dur­ing a pe­ri­od that will place greater stress­es on labour mar­kets.

The ILO's 2015 Labour Overview speaks of an eco­nom­ic slow­down whose ac­cu­mu­lat­ed ef­fects can be de­scribed as a "slow-mo­tion" cri­sis.In an ex­clu­sive in­ter­view with T&T Guardian, Salazar warned that the im­pact of the cur­rent de­cline in the for­tunes of the wider re­gion is like­ly to be "big­ger than the quick, sharp shock of 2009" with po­ten­tial­ly long-last­ing eco­nom­ic im­pacts.

"In Latin Amer­i­ca," he said, "the re­cov­ery was 'V' shaped. It was a very quick re­cov­ery. But that's be­cause the ori­gin of the cri­sis was fi­nan­cial.

"This time it's dif­fer­ent."

He said the main source of the cri­sis, for many coun­tries of Latin Amer­i­ca and the Caribbean "is the end of the com­mod­i­ty su­per-cy­cle" dur­ing which there had been be­tween ten and 15 years of high com­mod­i­ty prices."

The en­su­ing favourable con­di­tions, Salazar added, helped sup­port a num­ber of new poli­cies de­signed to cush­ion the im­pact of the fall­out from the crash. "But, that's fin­ished now," he said.In the wider re­gion, the stark im­pact of a re­ver­sal of for­tunes on labour mar­kets was felt in 2015. Ac­cord­ing to the ILO overview doc­u­ment, the de­cline is ex­pect­ed to con­tin­ue in 2016.

The overview says while there had been an av­er­age low of 6.2 per cent un­em­ploy­ment in Latin Amer­i­ca and the Caribbean, it was es­ti­mat­ed that the sta­tis­tic would climb to 6.7 per cent in 2015 which meant that as many as 1.7 mil­lion peo­ple re­gion-wide would have joined the ranks of the un­em­ployed, tak­ing the com­bined fig­ure to 19 mil­lion un­em­ployed.

Clau­dia Co­en­jaerts, di­rec­tor of the ILO Of­fice for the Caribbean told T&T Guardian the cur­rent sit­u­a­tion calls for a high lev­el of"so­cial di­a­logue" that is fair and trans­par­ent.

"You can­not have much of the tran­si­tions tak­ing place with­out re­al­ly con­sid­er­ing what you do with those who are go­ing to lose their jobs...how you train them...how you bring them back.

"In days like where we find our­selves now, we need to bring the con­cept of de­cent work on board," Co­en­jaerts added.

"The con­cept of de­cent work is ex­act­ly what be­comes rel­e­vant at this time."

The ILO's De­cent Work Agen­da, as it's called, pre­scribes a mul­ti-sec­toral ef­fort to pro­mote jobs, guar­an­tee rights at work, ex­tend so­cial pro­tec­tion and pro­mote so­cial di­a­logue.

Salazar sug­gest­ed that the most fea­si­ble way for­ward was to re­fer to the Glob­al Jobs Pact (GJP) for­mu­lat­ed by 186 coun­tries fol­low­ing ex­ten­sive dis­cus­sions at the on­set of the fi­nan­cial cri­sis and me­di­at­ed by the ILO.He said the ex­er­cise was a "huge knowl­edge-shar­ing" process that brought many pos­si­ble so­lu­tions and cop­ing mech­a­nisms to the ta­ble.

The GJP was adopt­ed at the In­ter­na­tion­al Labour Con­fer­ence in 2009 and un­der­took to re­tain peo­ple in em­ploy­ment "as far as pos­si­ble", sus­tain small and medi­um size en­ter­pris­es, sup­port job cre­ation and pro­mote in­vest­ments in em­ploy­ment-in­ten­sive sec­tors, in­clud­ing green jobs.

There was al­so an un­der­tak­ing to pro­tect "the most vul­ner­a­ble" peo­ple and fam­i­lies af­fect­ed by the cri­sis, to ac­cel­er­ate the re­cov­ery of em­ploy­ment and to "equip the work­force with the skills need­ed for to­day and to­mor­row."

Salazar said the GJP "check­list" was good as a guide to "the dif­fer­ent pol­i­cy re­sponse mea­sures that gov­ern­ments can use." This, he said "al­so ad­dress­es the pol­i­tics of it."He said that coun­tries al­so need "a good di­ag­nos­tic" sup­port­ed by sound sta­tis­tics, trans­paren­cy and "in­ten­sive di­a­logue." If this process is fol­lowed, the ILO re­gion­al boss said there will be "cred­i­bil­i­ty for the pack­age of mea­sures."

"This talk about mak­ing sac­ri­fices is fine," he said, "every­body is pre­pared to make sac­ri­fices as long as there is a feel­ing that there is a fair dis­tri­b­u­tion."He how­ev­er con­ced­ed that "this is easy to say but not easy to do."

"You need a com­mit­ment and you need good im­ple­men­ta­tion. Be­cause the trust can be bro­ken not just in the mo­ment of the for­mu­la­tion of mea­sures but al­so in the im­ple­men­ta­tion as time goes by," Salazar said.

Im­por­tant­ly, Salazar said the pre­scrip­tion for change is "not just a mat­ter of mit­i­gat­ing" the im­pact of de­cline and that the con­cept of neu­tral labour mar­ket im­pact is not just about "the jus­tice of dis­tri­b­u­tion, but al­so a sense of what comes next be­yond the cri­sis."

"You need a long-term hori­zon," he said.

He cit­ed sit­u­a­tions such as the de­cline in na­tion­al in­come from oil and gas in T&T say­ing the sit­u­a­tion calls for "con­fi­dence that there is a na­tion­al vi­sion about what needs to be done."

"Mit­i­gate as much as pos­si­ble to the ex­tent that you have fis­cal space," he sug­gest­ed.

"Try to main­tain the so­cial pro­grammes. Try to get un­em­ploy­ment train­ing and re­train­ing for youth, women and vul­ner­a­ble and the ones most strong­ly hit."

"This time," Salazar said, "it's not just fi­nan­cial (but) seems to be a bit more per­ma­nent."

Eco­nom­ic di­ver­si­fi­ca­tion, he urged, would be an im­por­tant part of the so­lu­tion.Co­en­jaerts said the is­land states of the Caribbean how­ev­er com­prised very small eco­nom­ics, "so when we talk about di­ver­si­fi­ca­tion you re­al­ly need to keep in mind some of the par­tic­u­lar chal­lenges that need to be over­come.

She men­tioned di­ver­si­fi­ca­tion, in­fra­struc­ture, trans­porta­tion and "how you build scale."

This, she said was "some­what dif­fer­ent than what hap­pens in a big na­tion."

"I do al­so think there is scope for look­ing at what has been learned in cer­tain coun­tries and what kind of pol­i­cy pack­ages have been em­ployed," she said.

"But it is no easy task."


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