Ben Moxham is an international policy officer at the TUC
Nearly everyone agrees a decent job is the best way for someone to escape poverty. So why is the Department for International Development (DFID) doing so little to help?
Yesterday was the World Day for Decent Work, but unfortunately there isn’t much to celebrate. The world faces its worst employment crisis in 80 years, with record numbers of young people out of work. As the latest UN report (pdf) on the Millennium Development Goals (MDGs) shows, an extra 50 million workers are living on less than $1.25 a day thanks to the global financial crisis.
Against this grim backdrop, the development community needs to be doing far more to create decent jobs – but as our brand new report, “A decent job?” (pdf), concludes, DFID doesn’t make the grade. The department only scores 25 out of 56 points for its patchy contribution towards the ‘Decent Work Agenda’ – a set of policy objectives developed and promoted by the International Labour Organization (ILO).
To start with, DFID doesn’t set itself an overall target of creating jobs. Instead, its flagship target on poverty (pdf) is to provide 50 million poor people “with the means to leave poverty”. This is code for giving them access to financial services, which in most cases is micro-credit.
But is saddling a poor person with debt the same as helping them leave poverty? Not according to a growing body of critics including DFID-supported research (pdf) from last year which concludes:
“…no clear evidence yet exists that microfinance programmes have positive impacts.”
DFID aims to generate growth through lowering the cost of doing business. But there is no guarantee such an approach will create jobs. Take Zambia – resource-fuelled growth rates averaging 6.4% per year since 2006 have done precious little to reduce poverty or unemployment. This is the story across much of Africa which faces a ‘very large deficit’ reaching the Decent Work MDG.
To be fair, DFID does support job creation programmes in at least eight countries, which together would generate up to a million jobs. This is welcome, but DFID should get ambitious by working with developing country governments to put in place job creation strategies built on skills, quality public services, strong labour market institutions and industrial policies that support employment-intensive businesses.
The key development challenge is not job creation, but decent job creation. After all, the world’s poor largely already have bad jobs – 1.52 billion people are in vulnerable forms of employment. But this is under threat by the rapidly growing practice of employers using agencies to engage workers on inferior terms and conditions and to prevent unionisation. [For more on the worrying rise of ‘precarious work’ see The Triangular Trap (pdf) by the global union IndustriALL, also released today.]
That’s why supporting labour standards at work is critical. DFID does support a range of smaller initiatives that promote business respect for labour standards. But it also provides hundreds of millions of pounds (if not billions) to the private sector without requiring it to respect labour standards or generate decent jobs. And it doesn’t help when DFID undermines labour standards by supporting the expansion of export-processing zones which ban trade unions.
Things can be different. The Dutch government, for example, now requires that any company receiving development funds must respect international standards set out in the OECD Guidelines for Multinational Enterprises (pdf). It is also helps companies to meet those standards by providing €21 million a year to IDH, its sustainability trade initiative. DFID provides a comparatively miserly £400,000 to the UK’s Ethical Trading Initiative.
DFID could also do more to help developing country governments implement their own labour laws. We only found one example of this: where DFID was supporting 30 labour inspectors on combating child labour (some 215 million children are in work).
Yet by contrast DFID is pouring millions into improving the regulatory environment for business across the developing world. In Rwanda, for example, DFID helped to reduce the time it takes to register a business from nine days down to two days. But is that really a priority for combating poverty?
I’ve heard from workers in India thrown into poverty (pdf) when waiting years to get their unfair dismissal claims heard or secure support for a serious workplace injury – a huge but neglected factor pushing people into poverty. But donors seem to be thin on the ground when it comes to helping such workers get access to justice.
DFID’s strongest point is it is a leader in providing the poorest of the poor with cash transfers in 17 countries. This form of social protection can help our injured Indian worker get back into her workplace. However, DFID could do more to ensure its cash transfers are not isolated hand-outs, but universal systems of social protection helping people get into work and stay there.
DFID could also show leadership by calling on all donors and international organisations to support all developing countries to establish social protection floors by 2020.
The best advocates for decent work are workers themselves, especially when they can speak together through a trade union. But DFID seems to be allergic to unions – with a few exceptions. According to the International Trade Union Confederation, 18 out of 20 key donor countries surveyed fund their national trade union movements to strengthen the capacity of trade union partners in the developing world. Only the UK and Greece don’t
DFID is also isolated in its lack of support for the International Labour Organization (ILO). Of the 23 countries that provide the ILO with development assistance, the UK ranks 22nd, beaten by countries like Panama.
Former DFID minister Andrew Mitchell gave the ILO the ‘red card’ by not renewing its funding in early 2011 because its rights-based approach wasn’t ‘value for money’ – there are two serious problems with this argument:
• Firstly, it’s a 1970s view of development: the equivalent of giving away fish, rather than fishing lessons.
• Secondly, it’s hypocritical. DFID’s huge micro-credit programme isn’t delivering results for the poor, and most of DFID’s private sector support isn’t even judged by such results.
Finally, DFID also ranked the ILO “weak” in relation to its “contribution to UK development objectives”. All that means is DFID don’t have decent work as a development objective, rather than any failing of the ILO, and that’s the key reason we rank DFID as “weak”.
But there is a positive note to finish on: DFID is doing something good in each of the 14 areas we grade them against, without exception. The challenge is that they are usually small projects, rather than department-wide objectives. Nevertheless, they are foundations to build upon, if the UK has the will to meet this vital development challenge.