The Director-General of the International Labour Organization (ILO) today called for a "Global Jobs Pact" to forestall a "prolonged and severe" jobs crisis that would lead to a massive increase in unemployment and working poverty.

The appeal followed a high-level, tripartite discussion at the ILO Governing Body Monday, during which International Monetary Fund Managing Director Dominique Strauss-Kahn said increased cooperation between the IMF and the ILO was crucial in addressing the global economic crisis.

The high-level meeting also heard remarks by Mr. Guy Ryder, General Secretary of the International Trade Union Confederation (ITUC); Mr. Alexander Shokhin, President of the Russian Union of Industrialists and Entrepreneurs; Jonathan Shaw, Minister for Disabled People and for the South East of the UK Department for Work and Pensions.

ILO Director-General Juan Somavia described international coordination to tackle the crisis as weak, and said "the financial, trade, economic, employment and social roots of the global crisis are interlinked and so must be the policy responses". This is a most important message ahead of the G20 Summit to be held in London next week.

The discussion was based on a study by the ILO's International Institute for Labour Studies entitled The Financial and Economic Crisis: A Decent Work Response, that said that demographic projections suggest that nearly 90 million net new jobs would be needed over 2009-10 to absorb new entrants in the labour market and avoid a prolonged jobs gap. In earlier financial crises, the labour market recovered only 4 to 5 years after the economic recovery, the study said.

"We need to implement a coherent and coordinated job-oriented recovery strategy, based on sustainable enterprises, as soon as possible", Mr. Somavia said. "If stimulus efforts are delayed the jobs crisis will be prolonged and severe and employment may only start to recover as from 2011."

The study by the ILO Institute examined current rescue efforts in 32 countries, including all members of the G20. It said that while the IMF had called for stimulus plans in the order of 2 per cent of GDP in response to the crisis, stimulus plans stand on average at 1.7 per cent. The study also illustrates that stimulus as a percentage of GDP for advanced economies – at 1.3 per cent – is less than half that allocated by developing and emerging economies.

The ILO survey also found that the stimulus packages lean heavily toward financial bailouts and tax cuts instead of job creation and social protection and noted that on average, fiscal stimulus packages for the real economy are five times smaller than financial bailout packages.