12 May 2006

The Secretary-General

Address to the 4th European Union/Latin America & Caribbean Heads of State Summit

Vienna, 12 May 2006

Your Excellencies,

Ladies and Gentlemen,

I would like to thank you Chancellor Schüssel and the people of Austria for your generous hospitality; and all of you for giving me the opportunity to address this important gathering.  I would also like to thank you, the assembled heads of state and government, for the consistent support you have given to the United Nations, and to me as its Secretary-General.

I am especially pleased that we meet in Vienna.  This beautiful city is a centre of the United Nations' work to fight many of the ills that plague our societies, from drug trafficking to organized crime, from weapons of mass destruction to corruption.

That makes it appropriate that you are meeting here to consider some of the challenges confronting your regions, and the need to work together to overcome them.

One such challenge is the rising number of unemployed youth, not just in your societies but worldwide.

Excellencies, I feel strongly that the lack of opportunities for our youth merits more attention than is currently focused on it, especially as this issue affects so many of the other items on your agenda.

I would like to take this opportunity to share with you some thoughts on this grave and growing problem.

Today, young people aged between 15 and 24 are only a quarter of the world's working population but they make up half of its unemployed. The European Union alone has more than 4.3 million unemployed young women and men; Latin America and the Caribbean, over 8.8 million. Some 7% of adults are unemployed in Europe, yet more than 18% of the young lack jobs. In Latin America and the Caribbean, the difference is similarly stark -- 15% of the young, compared to only 5.6% of adult workers, suffer from unemployment.                

The young not only have greater difficulty in finding work of every sort, they have an even smaller share of decent and productive jobs. Across the world they tend to work longer hours for lesser pay, with little job security. In economic upturns, they are amongst the last to be hired, and in downturns, often the first to be fired.

Moreover, young people suffer from a paradox, an incredible paradox: while they have, on average, higher education levels than older workers, they enjoy more limited access to employment. This fuels a sense of unfairness, and sends a message that more education will not improve job prospects.

If these facts tell a story, it is a story of the failure of both industrialized and developing countries to provide decent work opportunities for their youth.

Widespread unemployment, moreover, poses a particular challenge to democratic societies, where the failure to deliver jobs can weaken faith in democracy, and undermine popular support for reasonable economic reforms.

Today, such discontent is palpable in many parts of Latin America, where high unemployment has led to reduced confidence both in democratic institutions and in the market economy. Caribbean democracies suffer from an unemployment-fuelled assault of violence, drugs and HIV/AIDS. In parts of Latin American and Caribbean, many unemployed youth emigrate in search of jobs. While their remittances sometimes constitute lifelines for whole communities, their societies and their families would clearly benefit from utilizing their skills and effort at home.

And meanwhile, persistent unemployment in developed economies such as those in Europe creates conditions that xenophobic and other extremist political movements seek to exploit.

Clearly, there is a need to address these distressing trends, which are often most prevalent amongst groups with the highest unemployment, such as the youth. And with approximately 1.2 billion young people worldwide coming of working age in the next decade, these are problems that cannot simply be wished away.

Of course, the flip side of these challenges is the tremendous positive difference it would make if all these young people did find decent jobs. Halving the world's youth jobless rate, bringing it in roughly in line with the adult rate, would add as much as US$3.5 trillion to global GDP. In Latin American and the Caribbean alone, the projected gain of $298 billion would equal the combined annual GDP of Costa Rica, Ecuador, Dominican Republic and Peru.                 

These are, of course, only the direct economic benefits. Youth employment creates young consumers, savers and taxpayers. It alleviates problems like drug abuse and crime. It reduces inequality - in Latin America, unemployment rates among young people in the poorest 20% of the population are three times higher than in the richest 20%. Most important, it gives young people a sense of purpose, and a real stake in the success of their communities.

I stress these points because, though widely recognized, the potential of youth employment remains hugely untapped. This is the case in Europe and in Africa, in Latin America and in Australia, in the Caribbean and in Asia. It is true anywhere, and unacceptable everywhere.

At last year's World Summit in New York, world leaders agreed "to make the goals of full and productive employment and decent work for all, including women and young people" a central objective of national and international policies, and of national development strategies, including poverty reduction strategies. And I must say here that my good friend Juan Somavia  of the ILO has been pressing this agenda for a long time and for a while he was a lonely voice. And I am happy to know that today his is not alone.

The challenge now is to deliver on these declarations, both nationally and internationally. There is certainly no easy fix to this difficult and complex issue. But permit me to suggest some necessary approaches.

First, and foremost, there is an urgent need to prioritize employment in decision making. Traditional policy discussions treat job creation as an inevitable outcome of economic growth. As a result, economic policy formulation has focussed more on keeping inflation in check and increasing output than creating employment. Yet there is mounting evidence that growth alone, while crucial for employment, does not always lead to enough jobs.

We must re-evaluate our approach, and place job creation right next to economic growth in national and international economic and social policies. For instance, when discussing macroeconomic policies there should be an institutionalized reflex which constantly asks "what can this do for jobs?"

Overall employment growth is a necessary, but not a sufficient, way to alleviate the plight of the young unemployed. Separate and specific measures are needed to tackle the relative disadvantage of young people entering job markets.                

That is why, as a second step, national youth policies must specifically target both increased employment opportunities for the young, and their improved employability. In effect, governments must seek to create and to increase both the demand for youth labour and the supply of young people with the skills that are needed.

The demand for youth workers can be bolstered by targeting sectors with high youth employment potential, such as information technology or services. Labour market policies should be reviewed to better balance flexibility and security that both employers and workers need in a fast changing world. At the same time, strengthened job placement schemes can help ease the entry of first-time job seekers into the workforce.

On the supply side, far too many people -- young and old alike -- drift into long-term unemployment due to lack of skills, or lack of support to help them enter or re-enter the labour market.

Youth employment in Latin America requires a reduction in the dramatic gaps in educational attainment among different groups: youth from poor, rural and indigenous backgrounds lag far behind their peers in terms of schooling. This translates into more restricted access to decent jobs, and higher levels of unemployment, for these groups.

National education and training systems often fail woefully to equip people with the skills and abilities required by dynamic, globalising economies. This affects young people disproportionately as they lack work experience to compensate for inadequate training. Thus, programmes which combine on-the-job training with attendance in vocational schools would be particularly helpful for them. This approach has been used successfully in Germany, which boasts one of the lowest ratios of youth to adult unemployment in the world. 

National educational systems must also give young people better career guidance, and more information about the labour market. Many young unemployed come from communities where there is high unemployment in older generations too. Lacking working role models, they can often get career advice only from school-based schemes. In addition to these, Government job centres providing both vocational guidance and labour market information can play important roles in helping young people to choose their career or find a job.

Third, but no less important, an integrated approach to productive employment for young people requires policies and programmes geared to the promotion not only of more jobs but also of quality jobs. The high proportion of young people in intermittent and insecure work arrangements, and their over-representation in the informal economy, requires urgent action to improve working conditions and protect workers rights. This idea of "decent work" will be the subject of the 2006 High Level Segment of the UN's Economic and Social Council. Such work emphasizes more than just earning a living. It means productive work in which rights are protected, which generates an adequate income, and which is accompanied by adequate social safety nets.

My dear friends, these three broad approaches are designed to put employment at the centre of everything we do. Only if we succeed in doing this will we enable young men and women in cities and villages around the world to improve their lives.  Only then will we adequately address the frustration and rage of unemployed Latin American and Caribbean youth. Only then will we know that globalization is becoming inclusive, allowing everyone to share its opportunities.

Of course, the goal of a decent job for every willing worker requires us to work in partnerships.  No country, and no single actor, can take on this challenge alone.  Governments cannot do it without business; and business cannot do it without trade unions and civil society at large.  We need genuine coalitions for change, in which all of us unite our efforts behind a common purpose. The United Nations system stands ready to assist in this work. Already, multilateral initiatives like the Youth Employment Network are working with governments to formulate national action plans incorporating some of the suggestions I have outlined.

In Latin America, the United Nations Development Programme is working with partners to ease social tensions and address both the symptoms and effects of unemployment within its broader development agenda. Its initiatives range from civic education and justice to human rights and democratic citizenship. A central theme of all of them is the need to support public policies, such as employment creation, that strengthen the link between democratic societies and empowered communities, so that young and old alike can associate tangible benefits with the electoral process.

But while the UN and civil society partnerships can, and must, contribute, the lead in the fight against unemployment must be taken by governments.

It is governments who oversee the labour market. It is governments who set national policies and priorities. It is governments that create institutions to provide public services, such as education and training, to meet a nation's diverse needs. It is also governments who set the agenda for the UN, the International Monetary fund and the World Bank. And it is governments who must deliver on the promise of the Millennium Declaration to "develop and implement strategies that give young people everywhere a real chance to find decent and productive work."

If governments lay these foundations, civil society and the private sector will respond, and I feel confident the jobs will come.

Being unemployed early in life takes a heavy and enduring toll on the individual.  It can damage prospects for employment later in life. The habit of working once lost is very difficult to recover, leading to a cycle of despair, poverty and social instability, a cycle that's destructive not only for their own lives but for society as a whole.

We cannot afford to let this vicious circle continue any longer.  Youth is our most valuable asset -- our future.  We must nurture it. 

My dear friends, let's resolve to work together to provide our youth with decent jobs they deserve, so that they can take a full part in the lives of all our societies. I can think of no better way to ensure a brighter future for our countries, and for the world than by ensuring that the youth are productive and they have decent work.

Thank you.

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