| GB.267/ESP/2
267th Session November 1996 |
| Committee on Employment and Social Policy | ESP |
SECOND ITEM ON THE AGENDA
Recent developments concerning cooperation
with the Bretton Woods institutions
Introduction
1. Since the ILO's High-Level Meeting on Employment and Structural Adjustment in 1987, the Committee has undertaken a regular review of ILO activities related to follow-up on the conclusions of that Meeting and collaboration with the Bretton Woods institutions in this field. The report submitted to it at the Governing Body's 261st Session (November 1994)(1) included an assessment of the evolution of the concept and the scope of structural adjustment and the ILO's role in the promotion of structural adjustment policies corresponding to ILO values. The paper also included an account of recent developments in collaboration with the Bretton Woods institutions at the multilateral inter-agency level, the intermediate technical and policy level, and the country level, and gave some pointers for a future ILO strategy.
2. The purpose of this paper is to enable the Committee to examine developments in recent collaboration with the Bretton Woods institutions. While structural adjustment is still a key area of interest in this dialogue, collaboration has widened to cover broader economic issues relating to globalization and economic growth, and deepened to include a variety of labour market and social issues. This is due partly to the global changes that have resulted in pressure on the international organizations to develop more coherent and integrated answers to the challenges their members are facing, partly to institutional changes that have led the Bretton Woods institutions to develop programmes in the labour and social fields, and partly to the ILO's own interest in looking more actively and broadly into the social and standards-related implications of international financial and economic policies by virtue of its constitutional mandate.
3. The International Labour Conference reflected concern for such broadened collaboration when in June 1996 it adopted the resolution and conclusions concerning employment policies in a global context, in which it urged the Organization to "strengthen its ongoing dialogue with the Bretton Woods institutions ... with a view to promoting a better mutual understanding of the interrelationship between economic, social and employment policies".(2) The conclusions also stated that "In this connection, the ILO needs to stress the merits of programmes of economic reform which are based on consensus among the social partners, which allow for raising both the quantity and quality of employment with the goal of full employment, and adequate compensatory programmes of social safety nets and which do not require vulnerable sections of the population to suffer high and immediate costs in return for uncertain future benefits. The introduction of employment targets into structural adjustment programmes should be taken into account."(3) Thus, there are particular expectations that the strengthening of dialogue with the Bretton Woods institutions should focus on the role of the social partners, the quantity and quality of employment (along with the goal of full employment), social safety nets, vulnerable groups and employment targets in structural adjustment programmes.
4. In implementing these priorities for a strengthened dialogue, the ILO can first turn to its follow-up activities on the World Summit for Social Development. Collaboration between the ILO and the Bretton Woods institutions during the last two years has been heavily influenced by the preparations for and follow-up on the Summit, and the ILO's plan of action concerning follow-up on the Summit's conclusions is having a direct bearing on the continued evolution of the ILO's relations with the Bretton Woods institutions. These issues were addressed in a paper submitted to the Governing Body in November 1995.(4) Furthermore, a considerable aspect of collaboration in follow-up on the Social Summit is occurring through the inter-agency UN Task Force on Employment and Sustainable Livelihoods, which the ILO is chairing and which is addressed in a separate report to the Committee on the current status of follow-up activities generally.(5) The present paper is a progress report on additional activities that have involved the Bretton Woods institutions directly with the ILO at various levels, mainly since November 1994.
5. It is important to note that the ILO was involved in the discussions in the high-level segment of the ECOSOC sessions on collaboration between the UN system and the Bretton Woods institutions both in 1995 and 1996. At the 1995 session, which was held in Geneva, the Director-General participated in the debate with the executive heads of the World Bank, the International Monetary Fund (IMF) and the World Trade Organization (WTO). The new President of the World Bank, Mr. James D. Wolfensohn, spoke of the need for the closest relationship with sister organizations and of a personal commitment to stronger partnerships in the UN system. The Managing Director of the IMF, Mr. Michel Camdessus, referred to the strengthening of its collaboration with other international organizations, citing specifically the ongoing process of strengthening its contacts with the ILO in the field of employment policies, including in the context of country-level policy advice. The new Director-General of the WTO, Mr. Renato Ruggiero, stressed that his organization was working to improve cooperation with other organizations, making specific reference to the utmost importance of current work being done by the ILO in the field of labour standards.
6. In the high-level segment of June 1996 in New York, the ILO contributed its views through one of its Deputy Directors-General, and these views were well received. The heads of the World Bank, the IMF and the WTO, however, had been called upon to participate at the G-7 Summit in Lyon at the same time and therefore did not attend this session of ECOSOC. The Economic and Social Council concluded its session in New York with a resolution calling on the Secretary-General to find a more effective means of engaging in dialogue with the Bretton Woods institutions, particularly in the context of the jointly administered Bank and Fund Development Committee, which meets twice a year in the context of the meetings of those two institutions, rather than those of ECOSOC. This resolution supplements a list of ways of enhancing collaboration between the UN system and the Bretton Woods institutions prepared by the UN secretariat for this high-level segment and which included input from the ILO on the merits of dialogue between ministers of labour and of finance in connection with the IMF's Interim Committee. The ILO will continue to support these UN system-wide initiatives.
7. On the whole, however, the focus of the ILO's initiatives in relation to the Bretton Woods institutions has been on more direct activities. These have included high-level interpersonal working relations; networking at the analytical and research levels with more systematic exchanges of ideas and information, including staff meetings, seminars and conferences and joint or parallel background work; and broadening cooperation, including technical cooperation, at the country level and, in so doing, establishing principles and procedures for contracting and operational work, which would enable the ILO to continue to use fully its technical expertise in Bank-funded projects while maintaining its independence as an equal partner.
II. Contacts at the top management level
8. An ILO delegation led by the Director-General participated in the 50th anniversary conference organized by the World Bank and the IMF on the future of the Bretton Woods organizations. This conference was held in Madrid prior to the 1994 annual meetings of the Bank and the IMF, in which the ILO also participated, for the first time, with official observer status in a delegation led by the Deputy Director-General. The high level of representation and visibility of the ILO at the events in Madrid conveyed a heightened level of interest by the ILO for involvement in the work of the Bretton Woods institutions, and enhanced the potential for the ILO to play an increasingly influential role in their deliberations. The ILO has subsequently also participated in annual meetings of the World Bank and IMF in 1995, when the Director-General led the delegation, and also in 1996 when the Deputy Director-General led the delegation and participated as a panellist in the seminar on "Confronting Social and Environmental Issues in Privatization", which was organized as part of the World Bank's Program of Seminars. Representatives of the Bank and the IMF have also regularly attended as observers at the International Labour Conference and the Governing Body.
9. The Director-General has met Mr. James Wolfensohn, the new President of the World Bank appointed in March 1995, on several occasions, first in July 1995 at the ECOSOC session, and again during the annual meetings of the Bank and the Fund in October 1995. Together with other UN executive heads, the Director-General also met Mr. Wolfensohn in Washington in November 1995, where the discussion focused, inter alia, on countries emerging from conflict. This was followed, in May 1996, by a visit by Mr. Wolfensohn to the ILO, where a private meeting with the Director-General was followed by a meeting and a frank exchange of views with a selected group of ILO officials. During this visit Mr. Wolfensohn gave a strong commitment to supporting enhanced cooperation between the Bank and the ILO, and a positive response is expected to the formal invitation that has been sent to him to address the Conference in 1997.
10. As regards the IMF, close cooperation has been encouraged by the visit to the International Labour Conference in June 1992 of the Managing Director, Mr. Michel Camdessus, at a time when structural adjustment was the theme of the dialogue. Since then, interaction with the IMF has focused on the preparations for and follow-up on the World Summit for Social Development. In October 1995 the Director-General was invited to meet the IMF's Interim Committee in private session on the subject of follow-up on the Summit. A communiqué issued by the Interim Committee, referring to the meeting with the Director-General, emphasized the need to strengthen cooperation between the ILO and the Fund in the light of the commitments made at the Social Summit in relation to both country-level collaboration and to the preparations for publication of the IMF's World Economic Outlook -- Prospects and Policy Issues and the ILO's World Employment. Since then, country-level collaboration has been encouraged by internal guidance letters sent to the field structure by both the Director-General and the Fund's Managing Director, as described below, and specific exchanges have been held in preparations for the 1996 issues of the two publications in 1996.
III. Technical and policy level relations
World Bank
11. Most technical and policy level relations can be summarized as either relations between the ILO and the Bank or the ILO and the IMF. Several missions by World Bank and ILO officials in 1993 and 1994 set the stage for a series of technical round-table discussions which were held in Geneva in December 1994. These discussions were an attempt to agree on a more coherent policy approach between the Bank and the ILO on poverty alleviation and employment promotion. The discussions specifically focused on gender issues, labour market issues, training for employment, preparations for the Social Summit, social development and social security.
12. There was much common ground in the analysis and assessment of current problems in respect of labour markets, the economic role of women, training and key aspects of social development; but there were also major differences, especially on policy conclusions drawn from such analyses. While the World Bank in its work has increasingly recognized the importance of basic human rights in the labour market, including collective bargaining, freedom of association and anti-discrimination policies, many of its officials remain sceptical about the usefulness of many labour market regulations which, they feel, raise problems of enforcement, reduce economic growth by increasing labour market distortions, and serve to protect the privileged, small proportion of workers in the formal sector. The ILO's representatives took the view that in the analysis of the functioning of labour markets, regulations and standards cannot be looked upon merely as costs, as they deliver important benefits; moreover, growth alone cannot ensure equitable and just results in labour markets. It was agreed that existing empirical knowledge was too incomplete to provide definite answers on the costs and benefits of labour market regulations, and that it would be useful to try to develop methodological tools to conduct factual analyses of the impact of particular regulations.
13. The December round table resulted in further cooperation in a number of education-related activities, including official ILO participation in the "Education Week" organized for World Bank staff in 1995 and 1996. A joint study is also under way on current issues in vocational education and training (VET), which builds on the World Bank's VET Policy Paper of 1991, to which the ILO had made an earlier contribution, and is intended to provide accounts of VET policy shifts and the obstacles in implementing change, and to document and draw lessons from innovative approaches. The study also specifically addresses the special circumstances in transitional economies. Case studies are being prepared on some 15 countries, as well as a synthesis paper that will be a joint World Bank-ILO publication to be used as a basis for advisory services and the dissemination of best practice.
14. As regards gender issues, follow-up on the round table included an ILO contribution to the World Bank's efforts to prepare a report on Enhancing Women's Participation in Economic Development for the Fourth World Conference on Women (Beijing, September 1995). The ILO also moderated a panel in Beijing on this subject, jointly sponsored by the ILO and the World Bank. Three specific areas of possible collaboration were identified: (1) strategies for poverty alleviation for women in the rural and urban areas through employment promotion, financial services and organization building; (2) strategies to enhance women's access to "quality" formal wage employment; and (3) a review of the gender components of compensatory programmes and social funds to improve the design of such schemes. Preparatory work has been undertaken for a joint study on globalization, economic reforms, labour market legislation and women's employment: export processing zones revisited, with four country case studies and a synthesis report with policy highlights which will be discussed at a joint seminar. Discussions are continuing to define possible topics in other areas of women's employment and labour market participation, where it would be useful to undertake joint studies or the joint development of methodologies for policy research.
15. The ILO was consulted by the World Bank in the preparation of the World Development Report 1995: Workers in an Integrating World, which covered key areas of the ILO's mandate. While it was clearly understood that this was to be a Bank publication as far as the content and conclusions were concerned, the ILO provided its expertise through documentation, meetings with the World Bank team, and comments on successive drafts of the report. The ILO was able to exert an influence on the messages in the report, notably with respect to the role of standards and the importance of workers' basic rights, the economic role that a healthy industrial relations system can play, the relevance of government intervention in the labour market when market forces do not produce equitable results (as in the area of gender or ethnic discrimination), and the empowerment of workers and their organizations to enhance equity in the labour market. Important gaps and divergences remained, however, in particular regarding the importance of freedom of association and the right to collective bargaining as fundamental workers' rights, the level of collective bargaining and its role as an "alternative" to legal regulation, the role of employers' organizations, the need for minimum wages, the importance of active labour market policies, and the insufficient treatment of gender issues.
16. The publication of the ILO's World Employment 1995 provided an excellent opportunity to engage in a dialogue with the World Bank on the content and main policy issues emerging from the two reports. This also enabled the two organizations to disseminate their findings to their constituents and to a broader audience, shed more light on areas of agreement and disagreement, identify gaps in the analysis and provide pointers for future work. For this purpose, a panel discussion on the World Development Report and the World Employment Report was organized in July 1995 during the ECOSOC session in Geneva, and other fora have been used for similar joint seminars. The ILO contributed quite substantially to a tripartite follow-up seminar in Washington organized by the Bank's Economic Development Institute in May 1996 on "promoting a policy dialogue on labour issues". Discussions are under way to build on this experience in future regional seminars.
17. As regards more specific issues, the ILO actively participated in a joint ILO/World Bank seminar on labour law reform in West Africa, which was held in Washington in October 1995 and which has contributed to more effective coordination of Bank and ILO positions on labour law reform in that region. A follow-up seminar on this subject is being considered, to be held in the region itself in early 1997. Input was provided to a World Bank staff seminar in July 1996 on the social effects of privatization, where a presentation of the findings of ILO research resulted in requests by Bank staff members for information on specific labour concerns in various countries.
International Monetary Fund
18. As a direct result of the visit by the Managing Director the International Labour Conference in 1992, several missions by IMF and ILO officials resulted in an agreement to experiment with focused country-level dialogue in India, Costa Rica and Zimbabwe. Following the Director-General's meeting with the Interim Committee, mentioned in paragraph 10 above, both the IMF and the ILO issued instructions and guidelines to their staff on ILO-IMF field-level collaboration, as stated above, to encourage dialogue in all countries where the ILO and IMF are active. The ILO and the IMF agreed that a renewed and more focused level of collaboration should be pursued in a jointly selected number of countries. Seven were identified as candidates for this exercise: India, Indonesia, Cte d'Ivoire, Uganda, Ukraine, Viet Nam and Venezuela. A number of initiatives have been taken, particularly in Ukraine and Cte d'Ivoire, but it is too soon to conduct a thorough evaluation. Dialogue has been delayed in the others largely because personnel are not yet in place. With regard to Venezuela, where neither the IMF nor the ILO has a resident representative, there has been a joint recommendation to replace it with an effort for dialogue in Peru, where both institutions are well represented.
19. Above and beyond these country-level dialogues, ILO and IMF staff have had greater access than before to one another's conferences and meetings. The IMF participated as an official observer at the Fifth European Regional Conference of the ILO (Warsaw, September 1995) as a result of earlier discussions on the role and scope of social security programmes in transitional economies in Vienna in March that year.
20. The discussions in Vienna were held during a high-level conference for Central and Eastern European trade union leaders organized by the IMF in collaboration with the ILO, as a spinoff from ILO-IMF country-level collaboration. The conference was intended to initiate a dialogue with the ICFTU, the WCL and national trade union organizations in Central and Eastern Europe on the fiscal and monetary policies advocated by the IMF and their consequences for transition economies. Subjects included the impact of global economic trends, the problems encountered in labour markets and employment creation, structural adjustment and macroeconomic stabilization, privatization and enterprise reform, industrial relations, social safety nets and institutional capacity building. The discussions demonstrated clearly that the trade union participants were familiar with the overall economic constraints and challenges that their countries were facing, and were fully capable of providing a constructive and useful contribution to the reform process. The meeting was felt to be the beginning of a process towards a more focused and effective dialogue between the social partners, the ILO and the Bretton Woods institutions in this region.
21. The success of the Vienna experience led to more direct cooperation, initiated by the IMF, in the form of a joint IMF-ILO-World Bank seminar on economic growth and development in Southern Africa, in cooperation with SATUCC and ICFTU/AFRO (Harare, April 1996). The ILO's objectives in co-sponsoring and participating in this seminar were: to promote the inclusion of trade unions and employers' organizations as partners in discussions on structural adjustment and economic development in general; to include a strong commitment to employment creation in all structural adjustment programmes; and to emphasize the view that, while structural adjustment is a necessary part of efforts towards greater integration of the world economy, more efforts need to be made to include employment and social issues and an adherence to international labour standards in the design and monitoring of structural adjustment programmes. A frank exchange of views and airing of issues, with significant involvement of the trade union participants, should contribute in the future to greater involvement of the ILO and the social partners in the work of the Bretton Woods institutions and governments, as part of the national dialogue on structural adjustment, employment and employment creation, and the Bretton Woods participants accepted the need for such regular consultation.
22. The ILO was invited to participate in the IMF Conference on Income Distribution and Growth in Washington in June 1995, which examined the direction and impact of IMF policies in this area. The ILO's views were presented on labour market regulations, the impact of human resource development on employment, and the role and relevance of inequality indicators in policy design. A paper was also submitted, based on an earlier work prepared by the ILO's interdepartmental project on structural adjustment and employment, to an IMF seminar on the social effects of reform in the Middle East. The position of the ILO was well received at this seminar, and the IMF has agreed to include contributions by ILO staff in its series of publications of seminar proceedings. The ILO also participated in an IMF-World Bank sponsored seminar on Ukraine, entitled Accelerating Ukraine's transition to a market economy: credible macroeconomic adjustment and systemic reforms in Washington in July 1996. The ILO participated in discussions on three technical presentations on wages and labour market reforms (World Bank), a poverty study (World Bank) and reform of the social safety net (IMF).
IV. Policy dialogue in technical cooperation
Training for employment
23. The ILO is participating in World Bank-financed projects on vocational training in Pakistan, and adult training in Poland and Madagascar, where it has just completed support to a national training institution. The project in Poland is a major component of the Bank's project on employment promotion and services, which was designed to support the transition process. Regular dialogue is maintained with the Bank in relation to training and other needs for Bosnia and Herzegovina, Angola and other countries emerging from conflict. Further participation in World Bank-financed training projects is being developed.
Labour-intensive works
24. The ILO's collaboration with the World Bank in employment-intensive works has served as a constructive basis for field-level cooperation with important policy ramifications. The ILO has been able to influence investment policies so as to maximize their impact on employment generation and poverty alleviation; to promote the capacity of the private sector to implement labour-based works programmes while respecting relevant labour legislation and standards; and to demonstrate the cost-effectiveness of labour-intensive methods. It forges new links between investment and employment policies, private sector development and the promotion of labour standards. Such standards are further advanced by introducing relevant criteria and social policy clauses into contract systems and procedures and contract documents. These clauses typically cover minimum age, non-discrimination, the minimum wage and protection against employment accidents. Strong collaboration is developing in this field between the ILO's Employment-Intensive Works Programme, the World Bank Infrastructure Operations Division (Sahelian Department) and the AGETIPs (Agences d'Exécution de Travaux d'Intérêt Public pour l'Emploi), which are the executing agencies for public works and employment programmes supported by the Bank in Benin, Burkina Faso, Mali, Mauritania, Niger, Senegal and Togo.
25. The ILO is collaborating with the Bank in the establishment of social funds. In Rwanda, the ILO prepared two components of the "National Programme for Social Action" (PNAS), an employment-intensive works component and one on micro- and small enterprise development. In Madagascar, it designed the "Fonds d'Intervention pour le Développement (FID)", including the objectives, operational modalities and organizational and management structure of the Fund, which is now operational. The FID is a major component of a large-scale World Bank-financed National Food Security and Nutrition Programme. The ILO is also the executing agency for a complementary component called the "Urban Labour-Intensive Works Programme", aimed at direct employment generation for poverty alleviation in Antananarivo.
26. The ILO also contributes to other World Bank-supported programmes through regular joint meetings in the framework of the large-scale World Bank-supported Sub-Saharan African Transport Programme (SSATP). This has led to the development of draft guidelines on the implementation of employment-intensive investment programmes.
Revision of Labour Codes
27. Labour law reform is an area increasingly attracting World Bank attention, and formed part of the World Bank's adjustment loan conditionality for Cte d'Ivoire, where the government requested ILO technical support throughout the revision process. The Bank closely followed the work of the tripartite committee set up to discuss the various amendments and commented on the draft labour code, applying pressure to ensure that the new code incorporated the kind of flexibility it believed was required. In this process, the ILO and the Bank held an indirect dialogue, through the government, and the ILO succeeded in presenting and defending a draft labour code that provided both increased labour market flexibility and improved worker protection. This demonstrated the ILO's technical capacity to help governments ensure that the World Bank's flexibility concerns are met in ways consistent with ILO principles and international labour standards. The two institutions have followed up this experience with a successful joint workshop to discuss labour law reform in Africa, held in Washington in October 1995. This workshop is intended as a precursor for a more comprehensive joint seminar in Africa with the affected countries and constituent groups in 1997.
Reforming labour market policies
28. Labour market policies are another subject where field experience is having significant ramifications for policy. The ILO participated in a recent World Bank study on "Labour market policies for higher employment in Bangladesh", with the proviso that if differences of opinion arose, the ILO would be free to publish its findings separately. The ILO covered the issues of employment trends, labour relations and pay determination, recommending ways to strengthen its constituents' capacity to make informed decisions based on reliable data and consensus-seeking strategies regarding the right balance between government intervention and laissez-faire policies in the labour market. Differences in the viewpoints of ILO and Bank staff have been significant, particularly as regards the relative role of labour market regulations and institutions in employment creation. This highlights the importance of the need to develop common methodological tools for analysing the impact of labour market regulations.
29. The policy positions of the two agencies are also highly compatible in a number of other country-level initiatives: in Mali the ILO is implementing a project to set up a labour market observatory with financial support from the World Bank. The objective is to strengthen the capacity to monitor and forecast employment developments at the national and regional levels, so as to improve the design and implementation of employment policies, as well as their links with training.
Reforming social security
30. In recent years the World Bank has shown significantly greater interest in activities concerning social safety nets and social security. The ILO has sought early contact with the Bank to try to agree on a basis for collaboration and to offer its expertise in influencing project design. Generally, the Bank seems to recognize that in the area of social security, where progress so often depends on the attainment of a consensus, the ILO has a comparative advantage on account of its relationship both with the relevant ministries and the social partners. An intensive dialogue with the World Bank has been developed on questions relating to the reform of national social protection systems. This policy dialogue is accompanied by close cooperation on country-specific technical assistance projects and on the development of a comprehensive quantitative methodology for assessing the financial, fiscal and economic impact of social protection systems. A major investigation has just been completed by the ILO, financed through a World Bank loan, of the social, administrative, managerial and financial impact of a potential social protection reform in Turkey. This project simulated the fiscal effects of four different new designs of a national pension system complemented by an extended social assistance scheme, and the results provide a comprehensive basis for government decision making.
31. Building on this experience, the ILO is currently planning to set up a social budget for Ukraine to facilitate the design of a comprehensive reform of national social protection. This will be the first example of a project jointly implemented and backstopped by ILO and World Bank staff, and will lead to an intensified dialogue with the IMF on the design of an affordable social protection system in a specific national context. It is hoped that this dialogue can develop into a model for other country-based operations. In the Congo the ILO is implementing an emergency project under World Bank financing for the national social security scheme. The ILO also expects to bid for the execution of a large Bank-financed social security project in China.
ILO collaboration with the World Bank in the field of enterprise development
32. The ILO has been active for a long time in the area of small enterprise and entrepreneurship development, a field which has become increasingly important in the context of structural adjustment and employment creation. Collaboration with the World Bank has grown accordingly: the Informal Sector Support Programme in Honduras is a credit mechanism set up as part of the Bank-financed Honduran Social Investment Fund, which supports nearly 40 institutions acting as financial intermediaries for small-scale credits reaching some 10,000 micro-entrepreneurs, 70 per cent of whom are women. Other examples include the design and preparation of the Bank's innovative Young Professional Entrepreneurs Development Programme in Indonesia; an ongoing project on entrepreneurship development for labour-based road maintenance contractors in Lesotho; and ILO participation in a World Bank sectoral mission which led to the Bank's support for an ILO initiative to encourage the formation of village banks. In the Russian Federation the ILO has been working with the World Bank, through the provision of consultants, in the identification, preparation, appraisal and implementation phases of a proposed Bank loan for management training and small enterprise development activities to facilitate the transition process. Since early 1996, through its Poverty-Oriented Banking Programme, the ILO has been a participating member of the Consultative Group to Assist the Poorest (CGAP), an initiative of the World Bank which coordinates a group of donors to collect and disseminate information about what works in the area of micro-finance, and to support NGOs, banks and others working to reach the poorest through financial services.
V. Concluding remarks
33. Previous discussions in the Committee have suggested a need for the ILO to achieve closer relations and more systematic dialogue with the Bretton Woods institutions, to become involved in structural adjustment processes at the earliest possible stage, involving the social partners at the outset with a view to raising the employment-generating potential of adjustment programmes in addition to providing social protection and training and integrating labour standards into adjustment processes to ensure their success. Beyond these concerns, however, the ILO has an independent mission to advance social justice through economic growth and employment, and considerable benefit would derive from contributing the ILO's skills and advancing ILO principles in future dialogue and cooperation with the Bretton Woods institutions generally.
34. In June 1996 the International Labour Conference, in adopting the resolution and conclusions on employment policies in a global context, specifically requested the Office to strengthen its ongoing dialogue with the Bretton Woods institutions "with a view to promoting a better mutual understanding of the interrelationships between economic, social and employment policies".(6) The present report shows the recent steps that have been taken to respond to the concerns raised by the Committee and the Conference itself. The ILO has engaged in policy dialogue involving both social protection and employment; the staff of the ILO have built up and reinforced professional relationships to advance policy and research on many specific subjects, including the issue of labour market regulation; a wide range of country-level experience has contributed to an appreciation, at the highest levels, of the ILO's mandate and expertise; and the ground work has been laid, particularly in the initiatives being taken regarding follow-up on the Social Summit, to identify regular mechanisms for more effective cooperation in the future.
35. Momentum has been generated for more systematic and institutionalized collaboration between the ILO and the Bretton Woods institutions. Through high-level commitment, a network of contacts, regular exchanges of information and more frequent opportunities to comment on work in progress, duplication can be avoided, efforts to support member countries and constituents can be more mutually supportive, and some influence can be exerted on the underlying premises of policy development in our respective institutions. Further steps remain to be taken to develop truly joint activities, especially in the areas of employment promotion, social protection, social dialogue, and the implementation of fundamental labour standards, and in technical cooperation generally.
36. On substance, there seems to be a much clearer understanding and recognition, on the part of the Bretton Woods institutions, of the importance both of employment promotion and social protection. With regard to basic workers' rights, there has been a constructive dialogue on freedom of association and the right to collective bargaining, although there continues to be a reluctance to engage in the advocacy of these rights. Some improvement can also be noted in the acceptance of other basic workers' rights. Further dialogue needs to occur on how one might more effectively incorporate ILO standards into the policies and programmes of the international financial institutions, as called for by the World Summit for Social Development, without creating the impression that the ILO is trying to get the Bank and Fund to do the ILO's work for it. Similarly, good progress has been made regarding the recognition by the Bretton Woods institutions of the important contribution that employers' and workers' organizations make to social development, and of the need to improve their participation in structural reform programmes and the development process as a whole. Finding ways to assure that this participation will occur in specific instances continues to be the task ahead. The ILO, too, for its part, has improved its understanding of the objectives of the stabilization and adjustment programmes advocated by the Bank and Fund, as well as their growing interest and involvement in social development questions.
37. For the ILO, an important distinction is to be made between activities where the Bretton Woods institutions (especially the World Bank) act as a donor or funding agency for a project that involves the ILO, and other activities where the Bretton Woods institutions and the ILO are engaged as policy interlocutors. In both cases it is important for the ILO to be able to pursue independently the objectives entrusted to it by its Constitution and to pass an independent judgment on any analysis or conclusion that might result from such collaboration. This may not always be easy if the ILO is dependent on terms of reference, contractual regulations and the resources of the donor. Experience has shown how important it therefore is to establish a contractual framework whereby the roles and responsibilities of each organization are clearly defined and the opportunity to maintain independent judgment is recognized. Similarly, it will be easier to maintain the integrity of an ILO approach if the ILO can provide inputs or initial assessments out of its own resources (as in the case of social protection mentioned above), through which it will be easier to ensure that the donor-executor relationship does not interfere with the policy interlocutor relationship.
38. In conclusion, progress has been made in efforts to promote collaboration between the ILO and the Bretton Woods institutions. Such progress, however, brings the debate to another, much more demanding and specific level. It puts pressure on the ILO to direct some of its limited resources to programmes with the Bank and Fund, to coordinate its actions with the Bank and Fund at the country level, and to articulate specific responses whenever and wherever issues of ILO concern are raised in the policy and programme advice of the Bretton Woods institutions. Furthermore, strong and active support from the countries concerned is also required, as it is only through such support that the ILO's expertise can be applied to country-level activities involving the Bretton Woods institutions. These challenges can only be effectively addressed by focusing collaboration on the most important priorities of the ILO, that is, employment promotion, social protection, social dialogue and the implementation of workers' fundamental rights, as well as in a focused strategy for technical cooperation activities.
Geneva, 16 October 1996.
1. The ILO's role in relation to structural adjustment, including collaboration with the Bretton Woods institutions, GB.261/ESP/1/1.
2. International Labour Conference, 83rd Session (June 1996), Provisional Record No. 13, para. 22 of the conclusions.
4. Action to be taken by the ILO in giving effect to the Declaration and Programme of Action adopted by the World Summit for Social Development, GB.264/5.
6. Para. 22 of the conclusions.