WTO, ILO push social protection for fairer globalization gains

GOVERNMENTS need to put in place appropriate policies not only to address job loss and income inequality as economies worldwide become more interdependent, but also to ensure “wider distribution of gains from trade,” said a study jointly conducted by the World Trade Organization (WTO) and the International Labor Organization (ILO) and released last Sept. 20.

The 320-page study, titled: “Making Globalization Socially Sustainable” and which compiled analyses of 13 experts, noted that while advocates of globalization have argued that such integration generates more investments, jobs and macroeconomic development, the resulting opening of economies has increased the vulnerability of labor markets to external shocks.

Moreover, the study added, gains from globalization are not equally distributed across regions, nor are they equitably spread among populations. It noted that while developing Asian economies have gained in terms of bigger foreign investments and more access to technology, some Latin American and Sub-Saharan African countries have been left behind.

Labor demand shifts, job displacement and sensitivity of domestic wages to foreign labor markets are inevitable consequences of globalization, but their scale and seriousness can be managed with proper state interventions, the study argued.

“Overall policy conclusions reinforce the view that trade, employment and social policies need to be pursued together,” the study said. “While globalization is seen as a potential source of growth and poverty reduction, a range of conditions need to be in place to maximize its benefits and ensure that those affected negatively are compensated.”

It noted that economies that have benefited from globalization are those with social protection policies that have effectively helped and reintegrated people dislocated by policy and structural adjustments made to make free trade possible.

Support should come in the form of government investment in poverty alleviation measures for those who are born poor or who lack productive assets to lift themselves out of poverty, as well as education and skill development policies that strengthen workers’ ability to adjust to changing conditions as economies open further. –Businessworld