15-16 JUNE 2016 / Tour & Taxis / Brussels

Transformed economies, better jobs, shared wealth. Can we do it ?

Transformed economies, better jobs, shared wealth. Can we do it ?

Thursday, June 4, 2015 -
09:30 to 12:00

Key points

  • How people work and what they do is an important part of development, regarding both the process and its quality.
  • There is no worldwide standard of decent work. The poor should be consulted about their jobs.
  • African countries are not transforming fast enough to provide enough jobs. Productivity increases in agriculture could achieve this.
  • We need to get back to more value added within the developing economies.
  • China has possibly reached a social turning point rather than an economic turning point.


Can the economies of the developing world be transformed to deliver decent jobs with a better distribution of wealth? The signs are that it will be a long struggle.

A recent report from the International Labour Organization (ILO) shows that, although the gap has been narrowed between developing and developed countries, it is still huge in terms of per capita income. It will take 100 years to catch up.

The report, 'World Employment and Social Outlook', looked at 145 developing countries and found little transition. Only three Less Developed Countries (LDCs) moved into a new category. LDCs have been stuck at the same share of manufacturing, under 10 %, for the last century. Labour productivity has not changed in 30 years.

The financial crisis has not helped matters, as sovereign debt has increased to bail out the financial sector. The ILO found that the imbalances were being worked out through the labour market via reduced contracts and wages and lower social protection. This has not helped employment.

Development is not so much about rates of growth, but about the composition of growth. This relates to changes in gross domestic product, the nature and quality of jobs, and the composition of economic drivers – such as, for example, investment-led growth, whether in physical or human capital. The nature of growth is critical. We cannot assume it will translate into quality employment.

In sub-Saharan Africa, 80 % of jobs are in the informal economy. With the population growing to 4 billion, there will be many young people seeking work.

African countries are not transforming fast enough to provide jobs. The bottom 50 % are in a family business or farm, or in casual wage work. Most are in rural areas and working in agriculture.

In many developing countries people are locked into poverty and extreme poverty. The majority cannot afford not to work. They also lack social protection. They need higher earnings. Policy needs to support practical approaches that increase earnings – developing cooperatives, for example. Increases in productivity in the agriculture sector could make a contribution. Investing in education could also be important.

Is there one model for successful transformation? It might be more effective for each developing country to present its own plan for diversification.

Regarding China, there is good evidence that the country has reached an economic turning point. Fast wage rises have persisted for 10 years, and this has undermined the competitiveness of Chinese industry.

Nonetheless, the movement of workers from rural to city areas has led to productivity growth of 40 %, underpinned by investment growth. Since early 2000s, labour rights and unionisation have been promoted, along with minimum-wage legislation. With this success, is decent work emerging?

Decent work is still a target and not a reality, said Dick Lo, a Chinese economist. There are poor working conditions in different parts of China, with minimal labour protection and many accidents. A stark example is the Foxcom factory, which makes Apple products. It has been in the headlines for poor working practices, cramped dormitories for workers, and factories operating 24 hours a day. Lo said that China had possibly reached a social turning point rather than an economic turning point.


In efforts to create better jobs, the problems are more evident than the solutions. It is difficult for the poor to climb out of poverty. Defining ‘decent work' in terms of the lifestyle they actually want would be a step forward.