ILO and the Informal Economy. Thomas Kring, CTA ILO DWT for South Asia New Delhi, India

Transcription

1 ILO and the Informal Economy Thomas Kring, CTA ILO DWT for South Asia New Delhi, India

2 Country data: Employment in the informal economy in non-agricultural employment Source: Statistical update on employment in the Informal Economy. ILO Department of Statistics June 2011 Country, Year Argentina (2009 IV Qtr) 49.7 Armenia (2009) 19.8 Bolivia (2006) 75.1 Brazil (2009) 42.2 Colombia (2010 II Qtr) 59.6 Costa Rica (2009 July) 43.8 Dominican Republic 48.5 Ecuador (2009 IV Qtr) 60.9 Egypt (2009) 51.2 El Salvador (2009) 66.4 Honduras (2009) 73.9 India (2004/2005) 83.5 Liberia (2010) 60.0 Madagascar (2005) 73.6 Mali ((2004) 81.8 Mexico (2009 II Qtr) 53.7 Nicaragua (2009) 65.7 Panama (2009 August) 43.8 Paraguay (2009) 70.7 Sri Lanka (2009) 62.1 South Africa (2010) 32.7 Thailand (2010) 42.3 Turkey (2009) 30.6 Vietnam (2009) 68.2 Zambia (2008) 69.5 Persons in informal employment, % of non-agricultural employment

3 The Informal Economy Informal Economy acting as a sponge New Trends Contract Labour, Outsourcing Coverage under the Law Capturing the Informal Economy in Surveys

4 The Informal Economy ILO s Work on the Informal Economy

5 ILO s Work on the Informal Economy The ILO has put in place an overarching framework for its work on the informal economy though a number of resolutions. The Resolution on Decent Work and the Informal Economy adopted in 'encompasses all economic activities by workers or economic units that are - in law or practice - not covered or sufficiently covered by formal arrangements'

6 ILO Framework International Conference of Labour Statisticians (ICLS) (2003) Promotion of Sustainable Enterprises (2007) Rural Employment for Poverty Reduction (2008) Skills Development (2008) Gender Equality (2009) Conclusions on Recurrent Discussion on Employment (2010)

7 ILO s Work on the Informal Economy Facilitating transitions from the informal economy to the formal economy. The Governing Body in March 2013 The meeting of experts is to provide guidance on the nature and content of the proposed instrument Double discussion at the ILC 103rd Session (2014) and 104th Session (2015)

8 Objectives of ILO Achieving Formalization of the Informal Economy

9 Objectives of ILO Immediate term: give priority to reducing decent work deficits in the informal economy Short and medium term: Enable those currently in the informal economy to move upwards along the continuum / new entrants join the more formal and decent parts of the continuum Longer term Create enough employment opportunities that are formal, protected and decent for all workers and employers.

10 INTEGRATED STRATEGY DECENT WORK STRATEGIES FOR THE INFORMAL ECONOMY : An integrated approach to move out informality Growth strategies and quality employment generation Regulatory environment, including enforcement of ILS & core rights Organization, representation and social dialogue TRANSITION TO FORMALITY Equality: gender, ethnicity, race, cast, disability, age Entrepreneurship, skills, finance, management, access to markets Extension of social protection, social security, social transfers Local (rural and urban) development strategies

11 Role of Labour Market Partners Importance of Employers Organisations Support formalisation of enterprises Awareness raising Facilitate easier registration process Work together to limit informalisation of workers Lobby government for improved business environment for MSEs Incentive package for MSEs Jointly engage in policy dialogue with Government!

12 ILO Framework Current ILO Work on the Informal Economy: Sub-regional Project on Facilitating Formalisation of the Informal Economy

13 Project Background Summary of Project: Coverage: India, Nepal and Bangladesh Duration: Five years ( ) Budget: USD 5 million Funding: Japanese Government under the ILO/Japan Multi-Bi Program

14 Project Objectives 1. Facilitate formalization of informal businesses and employment relationships, 2. Discourage informalization of formal economy firms and jobs

15 Immediate Outcomes Outcome 1 (policy & regulation): The regulatory and policy environment in the target areas made more conducive to formalization and protective to the risks of informalization Outcome 2 (local area pilot): Formal job growth promoted through job-rich growth strategy and integrated formalization assistance in the target areas Outcome 3 (knowledge): Good practices and tools of promoting formalization better understood by key stakeholders at the national level in South Asia

16 Formalization Scenarios 1. Regulatory & policy environment Value chain aggregators Policy dialogue Community development programmes Information campaign Socially responsible MFIs 2. Local growth strategy & formalization assistance Studies Capacity building Parallel projects of the ILO 3. Knowledge management

17 How the Three Components Work Together At firms level: Reduce the regulatory cost of formalization; Link incentive schemes; At workers level: Formalize the employment relationships, e.g., through the appointment letter; Extend the social security benefits; and Help find new jobs in the formal economy Through a constituents driven process The constituents will guide: national and local level consultative process to prioritize sectors and interventions;

18 Way Forward India: Nepal: Micro and Small Enterprises Manufacturing (Automobile) Construction Hotel and Tourism Bangladesh: Construction Transport

19 Other Activities Training Programme Cooperation with ITC Turing on development of training programme targeting labour market partners with specific components for Employers Organizations To be validated in December 2013

20 Resources: The Informal Economy and Decent Work: A Policy Resource Guide supporting transitions to formality en/index.htm Transitioning from the Informal to the Formal Economy. Report V(I) relconf/documents/meetingdocument/wcms_ pdf ILO Resources on the Web: formal.htm Sub-regional Project on the Way out of Informality

21 Thank you For more information, please visit: Thomas Kring, CTA ILO DWT for South Asia