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Interview: Juan O. Somavia of the International Labour Organization

Published by Newsweek on 1998-04-01

Juan O. Somavia of Chile became Director General of the International Labour Organization on March 1. Formerly his country's ambassador to the United Nations, Somavia was the brains behind the Copenhagen Social Summit in 1995, at which nearly 100 heads of state--the largest gathering ever of world leaders--pledged to alleviate global poverty and joblessness. He is now preparing a five-year review of the Summit. Somavia met recently with Newsweek's Pranay Gupte at the World Economic Forum's annual meeting in Davos, Switzerland. Excerpts:

GUPTE: Is the Social Summit still relevant?
SOMAVIA: Globalization has created victors and victims. There is a growing feeling that the world economy is a social pillar, that we are now moving into the question of seeing how do you put the pillar together. And that was precisely the message of the 1995 Social Summit. The summit concentrated on three core issues: poverty, unemployment, and social disintegration. And obviously employment is the first step out of poverty and the first step away from social disintegration. So in terms of the message of the summit, you know, employment was put at the core of it. The trickle-down theory is not working. Employment creation is at the core of both, you know, economic growth, economic development, but the need for social stability.

You are now preparing a five-year review of the Social Summit. What are your findings?
The Social Summit did two things. It confirmed the conventional wisdom of the 1980s--in the sense of saying we need open societies, we need open economies, we need private-led capital development. We need macroeconomic stability and low inflation, the relaxation of trade. The summit stressed the importance of information technology revolution. The Social Summit also challenged conventional wisdom by saying that the benefits of globalization were not being distributed in an adequate way- that consequently we run the risk that the notion of open societies and democracy, and private-led open market begins to lose legitimacy because it's not reaching enough people.

It's become fashionable to promote the private sector as the engine of development. What about government?
In order to solve some of the problems of globalization, it is clear that we need to revalue the functions of state institutions. There mustn't be too much government interference in economic affairs. But we have to acknowledge that there are important functions for government--without which the market doesn't function. We have to plan together and create enabling environments that generate economic efficiency and social efficiency at the same time.

Have world leaders adequately followed up on the pledges they made in Copenhagen?
What has happened is that you have a much more heightened political awareness of the need to put social development into the picture and to put the needs of people much more at the center of things. That's the real change.

Are you encouraged by the efforts of business leaders in tackling thorny questions such as poverty alleviation?
It's not something that's going to happen overnight. But I think that very clearly in the world business community, the need to think about this issue in positive terms and to look at it as a positive sum gain is now much stronger than before. Look at health and safety in the workplace--you can see it as a cost or you can see it as an inducement to productivity. Investment in training and education--you can see it as a cost or you can see it as an upgrading of the skill and knowledge level of the people in your company firm and consequently a contribution to productivity. So what I perceive as things that were seen as costs in the past tend to more and more be seen as a contribution to a better firm and to better bottom line results. It is normal that in different walks of life we look at the same problem but from different angles.

Is there a Somavia Model for Development?
The only credible model for development that exists in the world is that of the industrialized countries--one in which the social pillar was progressively incorporated under the national economy. So our challenge now is to do the same with the global economy. But we're not proposing something that we don't already know as an experience of the manner in which industrialized countries develop their own societies, you know. It has been done. We have to expand it toward the rest of the world and particularly link the global economy with the social pillar--we must develop national economies with a progressive component of social development.

And the challenge?
The challenge before the world community is how do we bring about convergence of understanding the problem with actual policy?

Pranay Gupte,
Senior Writer and Global-Affairs Columnist

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