4. The key governmental actors in the global economy, meeting at the OECD Ministerial Council and Birmingham G8 Summit have to demonstrate collective leadership and act quickly. They must:-  - implement a coordinated strategy which sustains global growth and supports balanced domestic demand (§ 5-7); 

- establish as a priority an International Commission to develop a new financial architecture which is required to govern international capital markets (§ 8-9); 
 
- develop a social and democratic dimension to globalisation and move decisively to ensure that core labour standards are guaranteed in the global trade and investment system (§ 10-13); 

- build on the principles established at the London G8 Jobs Conference and implement a strategy for employability and social inclusion through non discrimination, quality labour market policies, lifelong learning, a partnership for workplace change, combating low pay, and the attenuation of unemployment and poverty "traps" in social benefit systems (§ 14-15); 

- implement a strategy for sustainable development (§ 16-17). 

A Global Growth Strategy for Employment  

7. Coordinated action is therefore needed to establish and sustain above-trend economic growth across the OECD. Governments attending the OECD Ministerial Council and Birmingham Summit should move quickly to:-  - coordinate macroeconomic policies to achieve or maintain low real interest rates to boost employment growth across the OECD, so as to maintain the momentum of US growth, and ensure that EMU provides a platform to promote the demand led growth in Europe necessary to meet the EU employment guidelines. At the same time sustained tax cuts and increased public spending are needed in Japan; 

- broaden the objectives of central banks including the European Central Bank to include the attainment of the maximum possible growth and employment alongside low inflation; 

- maintain and develop stable fiscal bases through avoiding negative tax competition and so ensuring fair levels of taxation on capital and profits, while switching the burden of taxation away from labour; 

- accelerate infrastructure investment, and bring forward the trans-European infrastructure programmes; 

- improve on and accelerate the implementation of the "Heavily Indebted Poorer Countries" initiative of the IMF and World Bank so as to bring genuine debt relief for the world's poorest countries; 

- in Russia, break out of the vicious circle of financial crisis leading to the non-payment of wages, which leads to lost tax revenue and further financial crisis. 

 

9. Set against this the series of measures to promote financial market stability called for and enthusiastically endorsed by Heads of State since the 1994 Naples G7 Summit show clearly the inadequacies of the current approach. Neither the much heralded IMF "early warning system" nor the Basle Committee's Core Principles for Effective Banking Supervision have had any impact on this most serious crisis of globalisation. This failure proves the need for a new architecture to control the international financial system and now is the time to design it. The February 1998 meeting of G7 Finance Ministers called for a "profound and broad ranging debate" on the lessons of the crisis and the need to "strengthen the international monetary system". The aim of this must be to re-harness financial markets to facilitate long-term productive investment so as to secure growth and widely shared prosperity. There is a democratic deficit in the debate over financial market reform. Governments must therefore establish as a priority a broad-based Independent International Commission whose mandate is to report rapidly on the institutional and policy changes needed to establish an effective international regulatory framework. This should:- 
  - re-define the role and responsibilities of the Bank of International Settlements (BIS), the IMF, World Bank, OECD and the Basle Committee on Banking Supervision to implement a global system of governance for international financial markets; 

- review the role of the IMF and World Bank in particular as called for by the UN's Copenhagen Summit for Social Development, so that structural adjustment programmes promote good governance and respect for human rights, increased employment and poverty reduction, and not austerity and blind deregulation. The review should include the need for external support to maintain or initiate spending on social safety nets in countries facing difficulties. Similarly, the review should focus on the experience of countries suffering from the policies of high interest rates that have compounded the crisis of adjustment with major recessions; 

- lay the foundations for the implementation of an international tax on foreign exchange transactions; 

- recognise the role of minimum deposit requirements to discourage short-term speculative monetary inflows. The Multilateral Agreement on Investment currently under negotiation at the OECD should include a general exemption covering this; 

- agree that the emerging reserve currency blocks of the Dollar, Yen and Euro generate stable parities, along with the progressive removal of current account deficits and surpluses; 

- require the effective regulation of financial markets, and their certification covering quantified and acceptable risks with capital standards and prudential controls. Associated regulatory bodies must be effective, transparent and accountable. Limits to the exposure of foreign currency liabilities should be allowed, especially for institutional investors, notably pension funds; 

- ensure that banking systems be transparent and bound by effective disclosure criteria with satisfactory minimum reserve requirements. 

A Social Dimension to the Global Trade and Investment System  

11. The OECD and G8 governments attending the WTO Ministerial meeting must press for:-  - the inclusion of core labour standards as one of the subjects for negotiation in any new round of WTO negotiations; 

- practical measures to strengthen cooperation between the ILO and WTO; 

- the consideration of core labour standards into trade policy reviews. 

12. Urgent progress is also necessary at the ILO to establish a solid declaration on fundamental workers' rights with an effective enforcement mechanism. 

13. Governments must learn the lessons from the latest failure to meet the deadline for the conclusion of negotiations on the Multilateral Agreement on Investment (MAI). The fears of citizens of the effects of unbalanced trade and investment liberalisation are real. A failure by governments to recognise this will lead to a popular backlash against globalisation, and in particular any future investment agreement. Any agreement must not challenge the ability of government to regulate, nor lay governments open to perverse claims of expropriation, nor should the effects of social or industrial disputes be subject to such claims. Governments must be able to maintain effective public services when delivered through not-for-profit activities in such fields as health, social and educational services. Future negotiations must agree, among other things, a binding clause in the MAI that commits governments not to lower or not enforce domestic and internationally agreed labour standards and environmental standards in order to attract investment, and not just specific investments. Governments and the MAI will be judged by whether the granting of legally binding rights and protection for investors is matched by reciprocal rights for workers and for the protection of the environment. These are key issues in the domestic debate on the ratification of any emerging agreement.   

A New Agenda for Employment and Social Inclusion 

14. The 1997 OECD Labour Ministers' meeting, the 1997 European Union Jobs Summit and the London G8 Jobs Conference each reflected a shift in the debate on how to raise growth and how to translate this growth into good quality employment, with more social inclusion and less inequality. The era of driving for crude de-regulation of labour markets has passed and the OECD Jobs Strategy follow-up must recognise this. 

15. Adaptable labour markets are therefore necessary to encourage innovation, facilitate investment in human capital throughout the workforce and working life, work against social exclusion and produce results which are both efficient and fair, and which give workers confidence and security in the change process. Trade unions are a key element in achieving this and are ready to work with governments and employers if there is a positive agenda for change. This requires integrated policies:-  - Entrepreneurship and a partnership for "socially responsible businesses". The encouragement of entrepreneurship cannot be allowed to become synonymous with an absence of necessary regulation, standards and sweat-shop labour. Companies, irrespective of size must base their strategies for competitiveness on establishing high performance and knowledge intensive workplaces through technological innovation, changing work organisation based on higher and more diversified skills of workers, and high trust relations within firms and less hierarchy. Too few firms have followed such a path, too many remain obsessed with short-term flexibility, characterised by "downsizing", "delayering" and "outsourcing". Fear and insecurity are created in the workplace; training is neglected and workers oppose change, rather than embrace it. Worker involvement and the recognition and active involvement of trade unions is necessary to bring about this "high route" to workplace change. Governments can facilitate this. They should create a climate of security through a guaranteed floor of employment rights. Through a combination of innovation policy and incentives, they can encourage good practice in workplace change. 

- The prevention of long-term unemployment. Active labour market policies must be used to assist the unemployed back into work rapidly. This must be based on providing opportunities not penalizing the victims. They work best when there is high labour demand. They need to be proactive - targeting retraining and job placement measures before change takes place and before unemployment becomes long-term. Experience has shown that linking employment services and training agencies and decentralised services works best. Trade union involvement in the design and implementation of policies is essential. 

- Implementing lifelong learning for all. If lifelong learning is not just to remain an empty slogan, a social partnership involving trade unions, employers, parents and teachers is necessary to implement lifelong learning. There needs to be:- 

 - public investment in basic education to raise educational quality, particularly for the underprivileged; 

 - continuous monitoring and improvement in educational practices; 

 - the widening of access to further and higher education and its integration with adult education; 

 - the introduction of benchmarks for training and retraining in companies; 

 - the involvement of trade unions in the design, monitoring, assessment and promotion of systems to recognise work based qualifications and skills; 

 - the expansion of job rotation schemes between long-term unemployed and workers wishing to take training leave; 

 - the setting up of training banks for small and medium sized enterprises with the involvement of the social partners. 
 

- Managing the organisation of working time and extension of learning time. Productivity gains should be more widely distributed as a general reduction in working hours so as to strengthen the link between growth and  job creation.