Sponsored by the World Bank and the Government of Turkey
Istanbul, Turkey
June 12-13, 2006
Mr. Deputy Prime Minister, Distinguished Ministers, National Officials, and other guests
On behalf of the World Bank, and Shigeo Katsu, Regional Vice President, let me welcome you to this important Job Creation Forum. As the Bank’s Director for Turkey, I am especially pleased that this forum is the product of a collaboration between the Government of Turkey (and specifically the State Planning Organization) and the World Bank. Before I go any further, I want to thank the Government for hosting this event in superb fashion and for everything that SPO has done to make the conference happen. Employment is an ideal topic for a conference to be jointly sponsored by the Bank and the Government of Turkey. We share the view that jobs are a critical issue for this country. And improving job creation is at the very center of what the Bank is doing to help the Government in this country. In April, we released a major report analyzing the labor market situation in Turkey and the Bank is now discussing with the Turkish Government how we can support their agenda to create employment. In our discussions, I have seen that we start from the same point – there is no single action which will create jobs, instead the challenge of job creation requires efforts in a number of sectors which encompass economic policy, the investment climate, education and training, the social safety net, as well as labor market policy. And it is exactly that premise that has been behind the thinking of this conference. In fact, you will see from the agenda that we will devote time to discussions on each of these areas because all can have very significant implications for the environment in which quality jobs are created. Indeed, it is the core message of this Forum, that in this age of the challenges of a globalized economy, it is only when there are synergies between good policies and programs in these five areas will countries be successful in creating sustainable quality jobs. The experience of Ireland in particular, as well as the other countries to be show-cased in this Forum, thus provide important and, we hope, transferable lessons. Although we will hear more about Turkey’s experience later on, this is a conference covering the whole region of Eastern Europe and Central Asia. We are very pleased to see that we have ministers and senior-level representation here today from more than 15 countries throughout the region. I would like to express my appreciation for their attendance and welcome the ideas and experiences that they will share during this conference. While there are diverse experiences within the region, all countries share a common concern that brings us together – the challenge of creating not only more jobs, but better jobs. Over the past 15 years, every country in the region has gone through immense transformations. This has brought hardship but also opportunities. Everyone hopes that the outcome of this process will be prosperous and inclusive societies. And that is why employment is so important. Jobs are the mechanism through which the benefits of economic growth are distributed and it is primarily through jobs that people contribute to and feel part of the societies in which they live. Allow me to state a fundamental lesson of the current times - There can be no sustained growth or political or social stability without job creation. Fortunately, the countries in this region have taken major steps to create the environment in which economic growth and job creation can occur. And, in fact, growth has been solid in many countries – which is good news of course – but generally employment generation has lagged behind. Take Turkey for example: Since the crisis in 2001, the economy has expanded at an average annual rate of almost 8% but employment has overall remained the same, with only about 45% of the working age population employed, with participation by women almost half that. Further, much the employment has stayed in the informal sector -- and the unemployment rate has stubbornly remained above 10%. But Turkey is not alone in facing the jobs challenge. For many other countries in the region, the labor market situation is worse. Last year, we released a major study on employment in the ECA region. It is called Enhancing Job Opportunities and you will find the summary in your binders. Our analysis identified various reasons for the disappointing employment performance even where economies are expanding. Let me mention just a few: Countries in the region have experienced large job losses because of economic restructuring and privatization. While this has been an essential stage in the overall economic transition, it has raised unemployment, especially since the redundant workers have often had the “wrong” profiles to easily find a new job. This includes agricultural workers looking for jobs in more productive sectors in industry or services but who have few skills. Many countries have yet to develop a business climate that inspires investor confidence and the job creation that will result from increased investments. The education and skills of the labor force are not always at the standards that exist in competing countries, such as the dynamic East Asian economies. This points to the need to raise education quality as well as better matching of skills with the needs of the private sector. Labor market rules and social safety nets do not always strike the right balance between the flexibility needed to generate employment and the social protection for workers facing an uncertain environment. Too often labor laws protect jobs and not workers.
There is an unfinished agenda in all of these areas but, as we will hear over the next two days, we have many examples now of policies that work and can produce more and better jobs. The policy direction is clear – and here I am drawing from a speech that Mr. Katsu delivered in Brussels last November on job creation. “We need to focus on allowing enterprises to create jobs by acting decisively in a number of areas including business environment, labor policy including taxation, skills, and infrastructure – as well as by changing incentives to encourage the mobility of workers to where the jobs are. We need to encourage new firms and established firms to continue to adapt and compete in the new market. We need to support social inclusion by establishing a more flexible labor market backed up by a safety net for workers, not a safety net for old jobs. Businesses also need capital, which leads us to a complementary agenda for both the private and public sectors to channel financing, including venture capital, to promising firms.” The World Bank is working with many of you on various aspects of this agenda and we hope to continue and extend this partnership in the future. We also hope to learn from you on what experiences work best in your countries. As I look over the agenda for today and tomorrow, I am pleased to see such a comprehensive set of issues being addressed and such a range of very relevant experiences that we will be hearing about. Time has also been built in for open discussion so that we share our own challenges, experiences, and knowledge in order to get a better handle on how to shape a policy agenda for job creation. Job creation is the biggest single economic, social and political challenge facing countries gathered here today. In a recent public opinion survey in Turkey alone, citizens ranked employment as the most important factor affecting their lives by a two to one margin over inflation, education and even terrorism. But job creation can only occur if there is agreement to implement reforms leading to more and better jobs. We believe that such a package of reforms can work. This goal is an attainable one for countries but one which can become a reality only if there is a partnership among the government, the private sector, employers and employees to translate the growth of today into the jobs of tomorrow. Countries can have growth and more jobs if there is a willingness of all these partners to tackle the employment challenge. I hope this conference will help us all find better ways to meet this challenge and create more and better jobs. Thank you. |
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