GENEVA (ILO News) - Worker, employer and government representatives from 50 European and Central Asian members of the International Labour Organization (ILO), including some 30 ministers, gather in Budapest, Hungary on 14-18 February to address the challenges of economic transformation and globalization across the region.

The 7th European Regional Meeting of the ILO comes at a time when governments in the region are seeking to reduce unemployment and poverty while grappling with social problems that continue to plague most countries despite the region’s role as a key player in worldwide economic integration, says a report prepared for the meeting ( Note 1).

"International economic integration is not yet leading to the sustainable growth and investment needed to give working women and men a fair chance of a decent job," says ILO Director-General Juan Somavia. "Europe and Central Asia can lead the way in developing new approaches to this basic demand. If this region can develop its social model, it will be a sign of hope for the rest of the world".

Four eminent guests will honour the Meeting with their participation on a high-level panel with worker and employer representatives: H.E. Mr. Ferenc Gyurcsány, Prime Minister of Hungary; H.E. Mr. Jean-Claude Juncker, Prime Minister of Luxembourg and holder of the European Union (EU) Presidency; H.E. Mr. Danial Akhmetov, Prime Minister of Kazakhstan; and H.E. Dr. Lawrence Gonzi, Prime Minister of Malta will discuss the question "will social dialogue survive globalization?"

Issues on the agenda

According to the report, Europe is the most attractive global zone for direct investment, but in Central Europe, only five countries achieved a GDP per capita in 2002 that was higher than in 1989. In spite of rapid growth in recent years, average incomes in CIS countries, including the Russian Federation, and in several countries in southeastern Europe, remain below their 1989 levels. In Central and Eastern Europe, relative poverty averages 12.3 per cent, ranging from a high of 19.9 per cent in the former Yugoslav Republic of Macedonia and 16.9 per cent in Poland, to a low of 7.9 per cent in Hungary and 5 per cent in the Czech Republic. In the CIS countries, extreme poverty remains very significant in Armenia, Azerbaijan, Kyrgyzstan, Tajikistan and the Republic of Moldova averaging close to 48 per cent of the population, says the report, adding that in the EU-15 the share of persons with income below 60 per cent of the respective average income was 15 per cent in 1999.

"Managing Transitions: Governance for decent work" calls for good governance to support women and men facing opportunities and risks during their life cycle. It cites four key issues that will be discussed at the meeting: youth employment and the transition from school to work, balancing flexibility and security in the labour market, managing migration, and aging and pension reform.

• Youth employment: While youth unemployment has skyrocketed worldwide over the past decade to some 88 million, the EU countries have faired relatively well, with a youth unemployment rate of 14.5 per cent, the report says. However, the economies of Central and Eastern Europe and the CIS show less favourable trends, including very low youth labour force participation rates and relatively high youth unemployment rates. In the EU countries, young people are more than twice as likely as adults to be unemployed, the exceptions being Austria, Germany and Switzerland with their “dual system” that combines school-based education with in-company training, the report says.
• "Flexicurity": The report also discusses how to regulate a rapidly evolving labour market in the context of the globalized economy balancing new forms of labour market flexibility with employment stability and workers’ security. According to the report, despite measures to introduce more flexibility into labour markets, there was little overall change in the length of time people stayed with an employer. Some countries have seen a faster growth of part-time and fixed term contract work but in others regular full time permanent jobs have grown faster. The report attributes this to two basic drivers of productivity growth. Learning on the job is a major source of high work performance, hence employers’ efforts to retain workers, but so is moving from lower to a higher productivity jobs, hence the need to encourage mobility. The report concludes that “countries which combine a medium level of employment protection with a coherent network of labour market institutions and policies fare best in terms of quality and quantity of work”. It also draws attention to a high rate of transformation of temporary jobs into permanent jobs, adding that over a period of three years, around 65 per cent of temporary jobs in Denmark and 55 per cent in the Netherlands were transformed into permanent jobs. Between 1992 and 2002, average job stability in Europe increased slightly from 10.5 to 10.6 years, ranging from slightly more than 8 years in the UK to almost 12 years in Greece. In the same year (2002), average job stability in the United States was just over 6 years.
• Migration: The number of economically active migrants in the region is estimated to be 26.5 million, or about 4 per cent of the total workforce. But their significance for the future of economies and societies in the region may well far outweigh their current numbers, the report says. While in Eastern Europe most migration flows are from the former Soviet Republics (CIS countries) to the Russian Federation, the pattern is more varied in Western Europe. For example, of the 7.3 million foreign nationals in Germany, most are from Turkey (2 million) followed by the pre-enlargement 15 EU countries (1.85 million). In Italy, migrants from other EU countries account for only 11 per cent of foreign nationals, compared with 30 per cent from North African countries and Albania and over 27 per cent from Asia. Of the 1.3 million foreigners in the United Kingdom, around one-third are from the EU, 11 per cent from Asia and 6 per cent from the United States. According to various estimates, of the 22 million foreign nationals residing in Western Europe in 2000, around 3.3 million were in an irregular situation, while a figure of 5 million has been quoted for the Russian Federation.
• Aging and Pension Reform: Over the past 50 years, life expectancy in the region has increased from 63 to 73 years, and is expected to reach 80 years by the year 2050. Although the population in Western European countries is the oldest, that of Central and Eastern Europe is ageing faster, except for the CIS countries, where life expectancy is the lowest in the region and has been declining, says the report. According to the report, pension reforms can only be effective in coping with demographic pressures in so far as employment levels, especially for women and youth, rise and older people have viable options to continue working. The report recommends stronger incentives within pension systems to delay retirement; rules which facilitate gradual retirement; incentives for workers to save for their retirement; and public information measures to improve awareness of the options available.

Note 1 - Seventh European Regional Meeting, Report of the Director-General, vol. I: ILO activities 2001-2004: Cooperation in a changing environment; vol. II: Managing transitions: Governance for decent work, International Labour Office, Geneva, 2005.