BRICS 2016 Meeting of the Ministers of Labour

BRICS 2016 Meeting of the Ministers of Labour and Employment New- Delhi, 27 -28 September 2016 Session 1 - Employment Generation Azita Berar Awad International Labour Organization

Topics for discussion A. Growth and Employment in the BRICS B. Enhancing Employability and Skills C. Creating Employment Opportunities D. Strengthening Public Employment Services

A 1 Synchronous Growth Slowdown BRICS, GDP Growth Rates 1998 -2017 2008 -2014 2015 2016* 2017* 0, 1 1 1, 7 1 0, 5 Russia India China South Africa -3, 7 -3, 3 -3, 8 -1, 2 Brazil 1, 3 3, 7 6, 2 6, 6 6, 9 7, 4 7, 6 7 1, 7 3, 2 3 5, 8 7, 1 8, 8 9, 9 1998 -2007 Source: All estimates are derived from IMF (2016) World Economic Outlook, April and its Update in July 2016. Figures for 2016 and 2017 are projections.

A 2 A Tightened Labour Market Situation for the Youth Total and Youth Unemployment Rates (Latest year available) 60% 50, 1% 50% 40% 30% 20% 12, 2% 10% 13, 4% 17, 0% 16, 0% 8, 1% 0% BRICS (2015) World Brazil (2014) Russian India (2012) China (2014) South Africa excluding Federation (2015) BRICS (2015) Youth (ages 15 -24) Total (ages 15+) Source: ILOSTAT and KILM 9 th edition for country-level data, ILO, Trends Econometric Models, April 2016 for regional aggregates

A 3 Avoiding a Reversal in Employment Quality Composition of informal employment in the BRICS, in % of total non-agricultural employment (Latest year available) 90 80 In percentage Informal employment in the informal sector 17, 9 70 Informal employment outside the informal sector 60 50 40 30 15 12, 5 21, 7 21, 9 Brazil (2013) China (2010) 66, 8 Informal employment in both the informal and formal sectors 20 10 19 25, 1 0 India (2012) Russian Federation (2012) South Africa (2015) Source: ILOSTAT and KILM 9 th Edition and data on China and India from ILO, Women and men in the informal economy: a statistical picture (second edition), ILO: Geneva, 2013 a

A 4 Uneven Trends in Real Wages Source: ILO estimates based on national statistics

A 5 Premature Deindustrialization? Labour productivity evolution from 2005 to 2015 : 0 0: 00 7. 19 05 05 07 . 0 06 . 0 05 . 0 Russian Federation 04 0: 00 : 0 0 7. 19 05 0: 00 0: 05 0: 00 : 0 00 : 0 7. 19 03 . 0 05 0: 00 : 0 0 0: 00 7. 19 India . 0 29 China 02 : 0 0: 00 : 0. 0 28 . 0 Brazil 6. 19 05 0: 00 66, 6 05 25, 6 0 5 000 0 7, 5 71, 2 05 2005 23, 6 : 0 5, 1 31, 4 0 2013 23, 8 00 44, 8 38, 4 7. 19 2005 30, 1 10 000 0: 31, 4 25, 2 . 0 2013 19 01 55, 9 28, 1 0 2005 24, 8 : 0 47, 1 15 000 05 2012 60 00 29, 8 0: 10, 1 65, 5 6. 19 2005 27, 8 . 0 7 58 30 2013 21, 4 20 000 0 20, 4 62, 8 05 2005 22, 6 6. 19 14, 4 (GDP person engaged - constant 1990 US$ at PPP) Services (%) GDP person engaged, in constant 1990 US$ at PPP 2013 Industry (%) 27 South Africa China India Russia Brazil Agriculture (%) Source: Labour Bureau for Indian data; ILOSTAT and KILM 9 th edition for country-level data, ILO, Trends Econometric Models, April 2016 for regional aggregates South Africa

B 1 Enhancing Employability and Skills § Reform efforts should continue improve the quality and relevance of TVET and skills systems, § improve access and outreach to support the agriculture sector and engage with the informal economy; § deliver greater social equity by increasing educational attainment of women and expanding apprenticeships to target youth NEET; § invest in TVET institutions, managers and trainers to improve quality and lift the social status of programs and pathways; and § increase measures to promote innovation and productivity growth in enterprises through on-the-job training.

B 2 Anticipating labour market needs and labour force availability Technological and structural change drive constant change in skills needs § make TVET and skills development systems responsive to evolving industry skills needs; § anticipate future needs enabling skills development systems to keep pace with change, and share good practices in skills anticipation systems; § effective skills anticipation systems promote policy coherence between ministries ( education , labour and line ministries) § And engage employers, workers’ representatives, skills system

B 3 Anticipating labour market needs and labour force availability – examples of good practices from BRICS Some opportunities to learn between BRICS countries § Sectoral approaches led by industry towards achieving sectoral vision (e. g. SETAs in South Africa, SSCs linked to NSDA in India) § Technology foresight in skills needs anticipation (e. g. Russian Federation inter-ministerial collaboration) § A shared vision for the industry / economy (SENAI’s “Antenas Thematicas” in Brazil) § China State Council’s Decision to Push Ahead the Development of Modern Vocational Education

C 1 Employment generation: An integrated policy approach Pro-employment macroeconomic policies and economic diversification strategies § Avoid excessive public expenditure cuts and use available fiscal space and fiscal policy : to increase well-targeted investments in infrastructure, quality public services to support aggregate demand enhance productivity and labour market policies in particular for youth § Industrial policy, value chain upgrading and economic diversification § Promote financial exclusion for SMEs § Wage policy and social protection to stabilize economy and combat inequality and exclusion

C 2 ALMPs in BRICS § All the BRICS implement active labour market programmes addressing women, youth, rural poor and migrants § Successful examples: public employment programmes (EPWP in South Africa, NREGA in India); labour market training (Brazil’s Estação Juventude) ; selfemployment support and entrepreneurship (PROGER in Brazil, Russia’s TVET program); and youth employment subsidies (China, South Africa) § Evidence that well-designed targeted interventions enable target groups to gain foothold in the labour market: more impact assessment needed including the spillovers for the local economy § Design, implementation and monitoring matter.

D 1 Strengthening Public Employment Services • BRICS have graduated from basic to intermediate level of PES service provision but differentiation of services remains low and individualised services are rare. • The market penetration rates remain very low • In all countries, the use of e-services has been adopted • Only Brazil and India have ratified the Employment Services Convention, 1988 (No. 88).

D 2. Public Employment Services –current challenges § the capacity for the provision of a full range of services and outreach to vulnerable groups § ensuring policy coherence, coordination and service integration § Finding sustainable means of financing PES and ALMPs § Promoting partnerships and ensure decent work through progressive regulation of private employment agencies

D 3 Policy coherence , coordination and service integration • PES and ALMPs are part of a comprehensive employment policy framework and must operate in synergy with broader macroeconomic and sectoral policies; • China has a highly coordinated system, in other countries more deliberate efforts are required to strengthen policy coherence at macro, sectoral and labour market levels. • Coordination and integration are also needed to avoid fragmentation and duplication of service provision.

D 4 Sustainable funding • A sustainable financing system is vital for PES (and ALMPs) to be effective. • Experience in BRICS vary from state funding at the central level in South Africa to local funding in India to multiple funding in China, Brazil and Russia

D 5 Public-Private Partnerships • Partnerships can be necessary in order to expand the outreach of employment services • All BRICS cooperate to different extent, with private and non profit providers at national and local levels. China has the largest share of global staffing industry revenue(23%) followed by Brazil (7%) (CIETT, 2015) • The role of private employment providers - esp. temporary agency work remains a sensitive issue. Efforts are underway in all BRICS to develop appropriate legal systems • None of the BRICS countries have ratified the Private Employment Agencies Convention, 1977 (No. 181) • Social dialogue should be promoted to adopt a balanced system

Summary: innovative policies for sustaining employment and growth In the context of economic slowdown : innovative policies including anti-cyclical measures, as well as long term measures addressing structural changes and economic diversification can help maintain achievements and improve labour market outcomes including through: • Pro-employment macroeconomic policies to sustain demand enhance productivity § Strategies to support private sector productive investment and facilitate transition to formality; § Well-designed and targeted active labour market policies for employability, skills development and entrepreneurship especially for women and youth; § Stronger employment policy support systems eg employment services systems

BRICS 2016 Meeting of the Ministers of Labour and Employment of BRICS countries 27 -28 September 2016 Thank You Azita Berar. Awad Director, Employment Policy International Labour Organization