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Mexico City, Apri 2006 Coordination of Economic and Employment Policies Secretaría o dirección Coordinación de Políticas Económicas y de Empleo 2 “Agenda for placing employment at the centre of government policies” Marta Novick Assistant Secretary of Technical Programming and Labour Studies Ministry of Labour, Employment and Social Security of Argentina Coordinación de Políticas Económicas y de Empleo Role of labour market The labour market is the gear box that links the economy with the well-being of individuals. •This is a multi-directional relationship which is influenced by: – ownership of the means of production, –pattern of economic growth –role of the state as a collector of taxes and “spender”. State Macroeconomic Environment Pattern of growth Structural characteristics Macroeconomic restrictions Effects of general balance between investment and utilized capacity Institutional Framework Taxes A Market of means of production Labour Market Expenses Legislation P O V E R T Y Homes Characteristics of individuals: Physical and human capital Demographic composition Strategies Access to markets N D I N E Q U A L I T Y Coordinación de Políticas Económicas y de Empleo Why coordinate? In the model of a closed economy Linkage existed at the social, sector and spatial level Employment and labour conditions were directly linked to the economic cycle The state set the rules and also acted as an anti-cyclical employer –It ended with contradictions and limited sustained growth Coordinación de Políticas Económicas y de Empleo Why coordinate? In the model of globalization, openness and deregulation –The market should adjust itself according to prices or quantities without intervention –The state should reduce the rigidity of the labour market so that it operates well and adapts to the dynamics of the economy –Unemployment was interpreted as a problem of supply and demand being out of phase with each other –In general, inequality and poverty increased in the region –Today, serious limitations exist for returning to the past Coordinación de Políticas Económicas y de Empleo Strategy of growth Different macroeconomic conditions -Value of the exchange rate –Production incentives –Fiscal Balance and/or Surplus (Cushion that permitted spending policies which stimulated the domestic economy –Active, integrated policies (in science and technology, in industrial policies, in salaries through promotion of collective bargaining, in social policy) - Recovery of taxation instruments (withholding) Coordinación de Políticas Económicas y de Empleo Challenges of policies Strategic decisions should be taken regarding… –Definition of profile of productive specialization –Consolidation of pattern of growth –Exchange rate –Financial system –Tax policies –Functional redistribution of income Coordinación de Políticas Económicas y de Empleo Summing up… Richard Freeman (2003) “The problems of the labour market are not resolved in the labour market” This implies the need for a coordinated and “rational” focus for the definition of policies, plans and programmes Coordinación de Políticas Económicas y de Empleo The Tinbergen Paradigm of rational economic policy i. Policy goals expressed qualitatively ii. Quantitative expression of the objectives iii. Objective function defined for the goals and level iv. v. of effectiveness Set of available instruments for policy management Theoretical model of the interrelationships and contradictions between instruments and goals Coordinación de Políticas Económicas y de Empleo Diagram of the Tinbergen Paradigm Función Objetivo de la política Meta 1 Meta 2 Meta n Meta 3 Modelo teórico y conceptual I1 I2 I3 I4 Coordinación de Políticas Económicas y de Empleo Inter-institutional Coordination Some necessities for coordination Coordinación de Políticas Económicas y de Empleo Needs for new instruments for i. The design and ex-ante evaluation – – – – Generation of information Definition of systems of indicators Design of instrument systems Analytical models of simulations ii. The on-going monitoring – Models of management evaluation – Schemes of rectification design iii. The ex-post evaluation – Models of impact evaluation Coordinación de Políticas Económicas y de Empleo New flexible and dynamic institutional spheres in order to … • • • • • Define the qualitative-quantitative goals Define the models of analysis Design the systems of indicators Analyze the results Redefine actions and corrective measures Coordinación de Políticas Económicas y de Empleo The new administration of the Ministry of Labour, Employment and Social Security, in line with the overall government vision, carries out the following measure to place quality employment at the centre of the decisions: Coordinación de Políticas Económicas y de Empleo Coordination of macroeconomic, productive and employment policies • GANEMPLE • Labour, Economy, Education and Foreign Ministry • Inter-ministry team of monitoring of income distribution • Economy, Labour, Central Bank, Foreign Ministry • Productive Cabinet – Ministers of Economy, Planning, Education and Labour – Competitiveness Forums – Secretariat of Labour, Secretariat of Industry, Secretary of Trade, Secretariat of Small and Medium-sized Enterprises Coordinación de Políticas Económicas y de Empleo Coordination of macroeconomic, productive and employment policies •Local Productive Forums –National Government with the Provincial and Municipal Governments –Dialogue with the local representatives of production –Integration of the team of assignment of credit promotion •Secretary of Small and Medíum-Sized Enterprises with the Ministry of Labour and Bank of the Nation Coordinación de Políticas Económicas y de Empleo Bilateral Actions of Labour Ministry with… •Ministry of Education –Educational level of the beneficiaries of Employment Plans –Coordination in Professional Training –Foreign Ministry –Technical assistance in trade agreements –Support in International Forums •Secretary of Science and Technology •Actions of productive innovation, development and employment •Contest for innovators –Strategy for inclusion of scientific-technical dispersion •Social Development –Joint actions of programmes of social inclusion –Development of single window systems for social programmes •Federal Agency of Public Income (AFIP) –Integration of labour and tax inspection –Simplification of registry Coordinación de Políticas Económicas y de Empleo But basically … The conviction that there is no better social or economic policy than full employment Nor that there is no better employment than decent employment ... the political vocation to place employment at the centre of government decisions.