A joint study by the United Nations agencies has stated in its report that the two decade of stupendous global trade growth did not make any meaningful contribution in improving the working conditions and living standards of majority workforce in poor countries. The joint study by International Labour Organization (ILO) and World Trade Organization (WTO) has found that a high incidence of informal or unaccounted employment had deprived the workers from the benefits of the boom in the world trade.
The findings are expected to jeopardize the future of Doha Rounds as China and India bloc would bring in this added argument point to include stringent formal employment policies in the comprehensive world free trade accord besides imposition of curbs on subsidies. ILO Director-General Juan Somavia said that these outcomes were likely to worsen as a result of the global financial crisis. Nevertheless, Razeen Sally, a senior lecturer at the London School of Economics told Reuters that labour problems reflect weak domestic employment policies and not the nature of globalisation itself.
The job creation in the developing world has been in the informal economy, about 30 percent of the manpower in Latin America to more than 80 percent in some sub-Saharan and South Asian countries. While international trade grew to represent more than 60 percent of global GDP in 2007, from less than 30 percent in the mid-1980s, the number of informal workers has stayed constant or even grown in poorer countries.
Informal employment involves private, unregistered enterprises which are not subject to national law or regulation, offer no social protection and involve self-employed individuals, or members of the same household. Somavia stated the study confirmed that by promoting fair working conditions together with national labour market, trade and financial policies, developing countries would be much better placed to benefit from trade openings.
The Geneva-based organisations have found that around 60 percent of employees in developing countries working in the informal economy, large parts of society are stripped off adequate income and career opportunities. This report is most likely to cause room for serious deliberations on poor execution and interpretation of labour policies while world trade grew without sharing the benefits to the less fortunate unskilled workers.
The report has confirmed that various bilateral and regional accords had principally benefited skilled workers, with little gains for physical labourers. The “Globalization and Informal Jobs in Developing Countries” study has concluded that reducing informality could release additional productive forces, enhance diversification and strengthen the capacity to trade internationally.
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