Structural change, sustained spending are a must for recovering from COVID-19, says ILO, Auto News, ET Auto

The International Labour Organisation has called for a need for profound structural changes and sustained social spending to build back better and faster even as it warned against higher levels of poverty, joblessness and inequality resulting from the COVID-19 crisis

In statements submitted to the annual meetings of the International Monetary Fund and the World Bank Group , ILO director general Guy Ryder outlined the particularly harsh impact of COVID-19 on many of the two billion workers in informal employment, as well as on those with little protection such as temporary, domestic or migrant workers.

“The world economy needs to find a new, or at least supplemental, engine of economic recovery” he said, referring to the fundamental building blocks of economic and social progress.

“An extraordinary collective effort, built on social dialogue and focusing more directly on strengthening these cornerstones of national economic strength and social cohesion will be required if the world is to achieve its stated ambition of building back better – and faster – from the crisis,” he added.

Calling for post COVID-19 policy frameworks to be consistent with the principles set out in international human rights instruments and social security standards, Ryder said this is particularly relevant in order for fiscal policies to underpin much-needed investments in universal social protection systems.

ILO is of the view that most states have mobilized their social protection systems. “However, many of the adopted measures have been temporary and often insufficient to offset the steep decline in incomes during this protracted crisis,” it said.

Commenting on the fiscal packages unveiled by different countries in response to Covid-19 pandemic, the ILO has found that fiscal stimulus has been unevenly distributed worldwide when compared to the scale of labour market disruptions.

“Filling the stimulus gap in emerging and developing countries requires greater international solidarity while improving the effectiveness of stimulus measures. The poorest countries should not be forced to choose between honouring their debt obligations and protecting their people,” Ryder said.

According to the statement, the ILO also warned against the profound and lasting effects of the COVID-19 crisis on the world economy and living conditions, in the context of global transformations already underway, driven by automation, geopolitics, ageing, migration and climate change.

“A combination of crisis-related and structural pressures could create a perfect storm of challenges for employment, household income and other aspects of human security in many countries over the next decade. These are the ultimate determinants of consumer and investor confidence, aggregate demand and economic growth and development,” Ryder added.