G20 is told to design better employment practices, reports Max Hibling
More open trade and well designed employment policies are the key to supporting growth, according to a joint report presented to Leaders at the G20 Summit in Seoul on 11-12 November this year.
The report, submitted by the OECD, the International Labor Organisation, the World Bank and the World Trade Organisation argues that more open trade can “provide stimulus for the world economy” at a time when many temporary stimulus measures taken during the crisis are being unwound.
The organisations behind the report argue that governments must resist protectionism in order to tackle the high unemployment rates persisting in many countries, in addition to contributing to economic recovery.
They emphasised that a successful conclusion to the Doha Development Agenda would send a positive signal that governments continue to oppose protectionism and seek new opportunities for growth, development and job creation through trade. Openness to trade helps economies recover more quickly from external shocks as it makes them more adaptable and less dependent on limited domestic demand.
For the benefits of trade to be widely shared, so that growth and employment can be improved on a sustained basis, complementary policies to address adjustment problems and distribution concerns are necessary to help workers who risk losing their jobs due to increased international competition.
Relevant measures include investment in education, effective labour market and enhancing export sectors in developing countries.
An open market allows countries to free themselves from the constraints of their local economies, promote greater efficiency and help develop and spread technological progress, said the OECD. These aspects are key sources of longer-term gains in productivity and living standards, it added.