The crisis of the international financial system has grave consequences for enterprises, workers and families around the world. Coming on top of still high food and fuel prices, its effects are provoking a slide into a recession that unless averted by prompt and coordinated government actions could be severe, long lasting and global.
We have abruptly moved from an era of changes to a change of era.
Today global action has four key elements: First, the immediate priority is to get credit flowing again quickly through continued coordinated action by monetary authorities before more serious damage is done to the productive capacity and social fabric all around the world.
Second, we need to put a floor under the slide into recession, not only by emergency measures to rescue banks and finance companies, but also by:
Maintaining and enhancing social protection systems to support working women and menand their families who are now suffering job and income losses as a result of a crisis for which they had no responsibility;ensuring that productive enterprises, and in particular small businesses which employ a large share of the workforce in all countries, are able to access affordable credit lines, avoid layoffs and wage cuts and prepare for recovery; and Official Development Assistance (ODA) to the least developed countries so that they are also able to protect the most vulnerable people and enterprises.
Third, we must start rebuilding the regulatory regime for global finance markets to reduce chronic volatility and instability. Money must work for people. The foundation of a new regime for market economies is the old ethic that good hard work deserves a fair reward. Our financial systems must support, not undermine, fairness in society and the importance of sustainable enterprises and decent and productive work to stable, peaceful communities. We need financial policies that promote productive investment, restrain speculative behaviour, ensure transparency and rebuild credibility in the system. In an open international system, the quality of national banks and other financial institutions practices and instruments should be subject to international standards of supervision. The surveillance mechanism of the IMF must apply with equal weight to big and powerful nations as well as smaller and weaker countries.
Fourth, we must move from recovery to sustainable development. This will require a new governance framework to support a fair globalization providing opportunities for all. We need to start the world economy down a path to sustainable economic, social and environmental development - with low carbon, employment intensive, poverty-reducing strategies. That will require a new balanced combination of smart regulation and intelligent public policy, responsible innovation and creativity of the market, inclusive societies and a focus on Decent Work as the key to a decent life.
We were in a crisis before the financial crisis erupted. It is a crisis of continuing and now increasing massive poverty worldwide and growing social inequalities in advanced, emerging and developing countries. An effective and coordinated effort to address the immediate financial
crisis must be a first step towards increased cooperation and coherence in global policy-making.
We need to construct a new stronger international institutional architecture that fosters a balanced and integrated approach to sustainable development. Developing integrated policies among relevant international organizations to generate Decent Work opportunities worldwide is one of the foundations of a sustainable recovery and a fair globalization.
The ILO represents the world of work constituency in the multilateral system, actors of the real economy - employers, workers and the employment, labour and social functions of governments. Their needs and their experience must be reflected in the task ahead.