Does trade improve the quality of jobs in poor countries?

Oct 14th, 2009 4:50 PM EST
By Mikiko Imai

Apparently not, according to the new report from the World Trade Organisation (WTO) and the International Labour Organisation (ILO). The surge in global trade over the last two decades has failed to improve working conditions and living standards in many developing countries. Although trade has contributed to growth and development worldwide, many of the jobs created in developing countries have appeared in the informal sector. Informal sector jobs tend to be the most vulnerable, characterised by less job security, lower incomes and an absence of access to social benefits. Yet, in many African and South Asian countries, as much as 60 percent of the country’s labour force is employed by this sector. In turn, these vulnerable labour market conditions have prevented developing countries from fully benefiting from globalisation. The report warns that this situation is likely to worsen as a result of the global financial crisis.

What can we do about this? The WTO’s chief Pascal Lamy encourages putting in place proper domestic policies to create good jobs in developing countries. The report recommends a number of ways to make trade policies more closely aligned with job issues in developing countries, including better coordination between trade and labour policies, and implementing policies to encourage formalisation of employment. Rich country governments also need to support poorer country governments in doing so, and enhanced trade capacity building assistance is one way to do this.

Read the report here

TAGS: Policy News, Trade