Financial crisis: the challenge now is to save people and the real economy
Geneva (AsiaNews/Agencies) – The current crisis has hit the financial sector hard. But what about people and the real economy? Though we don't know how long and how serious the financial crisis will be, we do know that if we fail to act decisively, the impact on the lives, working conditions and hopes of millions of people will be strong, global and systemic.
The current search for better financial regulation and a global surveillance mechanism of checks and balances is a welcome step. But we must reach beyond the financial system. This is not simply a crisis on Wall Street; it is a crisis on all streets
We need an economic rescue plan for working people and the real economy, with rules and policies that provide decent work and productive enterprises. We must better link productivity to salaries and growth to employment. People must have trust that the economy is working for them.
The International Labour Organisation has completed a first estimate of how this crisis is going to impact the day-to-day lives of people at all levels of society.
We project world unemployment could increase by 20 million by the end of 2009—surpassing the 200 million mark of global unemployed for the first time. People working in building, automotive, tourism, finance, services and real estate will be hit hardest first.
The number of working poor living on less than US a day could rise by 40 million; those living on US$ 2 could rise by more than 100 million. As grim as these numbers are, they could be underestimates if the effect of the current economic contraction and looming recession are not quickly confronted.
Above all, we must focus on people, on enterprise, on the real economy. What does that mean?
First, get credit flowing. Emergency measures have been and are being taken.
Second, support those who are most vulnerable. That includes pension protection, unemployment insurance and credit for small and medium enterprises, which are a primary source of jobs today.
Third, restore decisive public policies and smart regulation that rewards hard work and enterprise. We are battered by the whirlwind of a financial system that lost its moral compass. We must return to the basic legitimate function of finance, which is to promote the real economy—to lend so that entrepreneurs can invest, innovate, produce jobs and products. Let's get back to what finance is meant to do—to finance the real economy.
Finally, we must address the underlying challenges. Long before the current crisis, we were in a crisis of massive global poverty, growing social inequality and precarious work—a process of globalisation that brought great benefits but for many had become unbalanced, unfair and unsustainable.
To keep economies and societies open, relevant international organisations must come together to develop a new multilateral framework for a fair and sustainable globalisation.
We must get the balance right and concentrate on rescuing people and production. It's about saving the real econom.
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