`We run the risk of polarisation'

Published : Feb 23, 2007 00:00 IST

Kari Tapiola. He says "one can question the framework in which" globalisation operates.-

Kari Tapiola. He says "one can question the framework in which" globalisation operates.-

Interview with Kari Tapiola, Executive Director, ILO.

IN the second week of December, the International Labour Organization (ILO) organised a high-level roundtable on labour market reforms in New Delhi. The context was globalisation and the emphasis was on decent work standards and equitable growth in a highly globalised world. Kari Tapiola, Executive Director of the organisation at its headquarters in Geneva, spoke to Frontline on globalisation and related concerns. Excerpts:

What does the term globalisation essentially mean to the ILO?

It is difficult to crystallise this in a few words as we have published so much as an answer to this question. Globalisation is a process that all economies and societies throughout the world are going through and it is changing the technology, the productive potential, the growth potential of societies and changing the way economic decisions are made. For the ILO, the important issue is how the social dimension is addressed. If it is not addressed, then globalisation becomes a process, which benefits those who are economically strong and becomes a big problem for those who are the weakest. We are concerned that if this is not properly managed and does not work for the benefit of the majority of people, then it will become a negative force and provoke tensions and negative reactions.

What has been the experience of the ILO as far as globalisation is concerned?

Globalisation, after all, is nothing new. There were times when there were strong and traditional globalising elements, such as multinational enterprises. This was much before the World Wars, when much of the economy was run by colonial powers. Globalisation is a continuous process, it has occurred in different forms, but the new issue is that it disconnects decisions of production from where production is actually carried out. So relations between capital and labour or employers and workers occur in a new situation. We have subcontracting and outsourcing. We do not have the employer-worker or employer-trade union link that used to be there earlier and were in one form part of the labour markets in society. Much of that has to be rethought and rebuilt in a new way. Globalisation is the result of processes that have developed owing to technology. Because it has not been designed to factor in the consequences, we are facing problems.

Globalisation presupposes an unrestrained movement of capital but places restrictions on the movement of labour. How does the ILO view this contradiction?

Capital is mobile and whether it is feasible to move to a world where both capital and labour ought to be mobile, I don't know. We are looking at a world today where there is a need to channel better the mobility of both capital and labour and with a clearer understanding of our aims and what we want to achieve so that the benefit would be as broad as possible.

One of the things that the ILO has been concerned about is the social impact of globalisation. You have also separately worked on labour standards and globalisation.

All these things appear in a certain sequence. The first impact of globalisation was, of course, the mobility of capital, which greatly increased after the Cold War ended. Market economies were divided into various blocs. It took jobs along. The first losers were the workers in the industrialised countries. They reacted to globalisation. At least part of them, those who have had negative reactions were by and large those who did not have alternatives, safety nets and were not able to benefit from social protection measures or alternative means of employment. This continued till the mid-1990s. One conclusion was that globalisation was benefiting only the developing countries, particularly those which had big growth sectors, such as India or China. It was seen as a new divide in a way between industrialised and developing countries. The reaction against globalisation in the industrialised countries was because people felt that they were being denied the benefits of globalisation, which they thought they were entitled to.

If you look at the situation today, it is clear that globalisation does not benefit countries as a whole; neither does it affect countries as a whole. There are parts in all economies, which benefit from globalisation - the export-oriented parts that are dynamic and growing whether the countries are industrialised, developing or in transition. Then there are large sections where globalisation has either not benefited or made the situation even worse. This takes us to the question of the balance and benefits of globalisation. If globalisation benefits a small group both in the North and the South, and if it does not benefit the majority, we run the risk of polarisation and of countries snapping in two, as it were.

If there is no mechanism to bridge the growing and the not-so-growing sectors and no system to deal with the consequences, there can be tension, conflict and no economic growth. If eight, nine, ten per cent growth rates do not increase decent productive employment that in turn generates demand and income and growth, the system will cease to function.

Do you think the time has come to question globalisation as it were or is it just a question of adjusting to something that is now taken as a given?

One cannot question globalisation because one cannot question objective trends but we can definitely question the framework in which it operates. It has very obvious limits. One of them is the environment. There is a realisation that if we go on this way, the planet will not be livable anymore. Then there are the ethical limits of technological growth. Then there is this question: what does it do to our societies, to labour, to employment relations, or to the way in which we decide matters in our society? And what does it do to democracy itself?

There has been a lot of pressure on countries, including India, to "liberalise" their labour laws. How can the rights of workers be protected in such a context?

Maybe the management of globalisation calls for more flexibility. Maybe that is true. Maybe one has to review labour laws. I think we have to review the whole notion of regulation not to do away with regulation but to find the appropriate form of regulation. The trend in labour laws has been very much to set numerical or quantitative limits in terms of quantitative benefits - to say that in enterprises of such and such size, such benefits should exist. Maybe we have to review this quantitative approach. But the logic of labour laws is to protect the maximum number of people. It may also be that we need to have a process where decisions on closures, re-location or employment take everybody into confidence. We essentially have to have a process through which this would take place and the requisite guarantees if people lose their jobs. We are talking about an economy where jobs are both created and lost. Hence we have to see what is the alternative. How can the benefit that employers get be translated into opportunities for workers who are otherwise disadvantaged? We cannot say, get rid of people and leave them at the roadside. We have to look at the benefits to the economy as a whole and that will come about only through a more balanced and fairer pattern of growth in an economy.

You have worked on the social problems of countries in transition. What exactly has been the social impact of globalisation in these economies, especially after the end of the Cold War?

The transition economies and the former Communist bloc provided social protection to their people. The system was limited, but it existed. When the change came about, it was not replaced effectively by another system of social protection. When property was privatised in what was earlier an essentially state-run economy, social protection should have been nationalised. But that did not happen. The social protection that existed in the Communist systems was an essential part - it was carried out at the factory level. When the form of ownership of property changed, social protection disappeared and it was not replaced by another form of social protection that was universal or efficient. There is still nostalgia for the Communist times and the old protection that we had. That is because the new system of the market as it emerged did not guarantee protection to people in the same way. This showed the danger of simply looking at the economy and only economic performance that was promoting wealth creation at the upper end, without looking at what happened to the retired, the old people and the workers in non-efficient, non-profitable industrial activities. This is why there is a country like China which has truly two faces - one, the face of the growing economy, investment and modern development and the other, there is a lot of conflict because jobs are lost in the unprofitable activities which are not easy to restructure.

There has been a lot of reaction to the way globalisation has affected the lives of people in the Latin American countries. What do you think is happening out there?

I see people demanding more control over their lives. One of the things that is happening is the legitimacy of elected leaders being questioned. The democratic process as it functions is not very strong. There is a high level of expectation. The expectation is not so much in the political field but more in the field of employment and social protection. There is a need to engage the actors in the economy, including, the trade unions, in creating a dynamic.

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