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The world economy needs a new engine of economic recovery-ILO

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As labour markets around the world continue to reel from the COVID-19 crisis , ILO Director-General Guy Ryder has called for sustained social spending as well as structural changes to counter the dangers of growing poverty, joblessness and inequality.

In statements submitted to the Annual Meetings of the International Monetary Fund and the World Bank Group , Guy Ryder outlined the particularly harsh impact of COVID-19 on many of the two billion workers in informal employment, as well as on those with little protection such as temporary, domestic or migrant workers.

“While some have access to sick leave and health services and continue to receive a salary, for many of those at the bottom of the income distribution, the consequences of COVID-19 have been catastrophic,” he said.

“The COVID-19 crisis has exposed deep-rooted inequalities. Without profound structural changes these will merely intensify, with consequences that would be very difficult to predict.”

Ryder called for post COVID-19 policy frameworks to be consistent with the principles set out in international human rights instruments and social security standards.

“Today this is particularly relevant in order for fiscal policies to underpin much-needed investments in universal social protection systems,” said Ryder.

Most states have mobilized their social protection systems. However, many of the adopted measures have been temporary and often insufficient to offset the steep decline in incomes during this protracted crisis.

Many countries have adopted large scale fiscal packages in response to the crisis, particularly to support incomes and businesses. However, the ILO has found that fiscal stimulus has been unevenly distributed worldwide when compared to the scale of labour market disruptions. Nearly nine-tenths of the global fiscal response to the crisis has been in advanced countries.

“Filling the stimulus gap in emerging and developing countries requires greater international solidarity while improving the effectiveness of stimulus measures. The poorest countries should not be forced to choose between honouring their debt obligations and protecting their people,” said Ryder.

A human approach to recover faster and better

The ILO Director-General also warned against the profound and lasting effects of the COVID-19 crisis on the world economy and living conditions, in the context of global transformations already underway, driven by automation, geopolitics, ageing, migration and climate change.

“A combination of crisis-related and structural pressures could create a perfect storm of challenges for employment, household income and other aspects of human security in many countries over the next decade. These are the ultimate determinants of consumer and investor confidence, aggregate demand and economic growth and development,” Ryder said.

“The world economy needs to find a new, or at least supplemental, engine of economic recovery” he said, referring to the fundamental building blocks of economic and social progress: widely available employment for all, skilling opportunities, decent working conditions, sustainable enterprises, adequate social protection and increased gender equality, with all of the contributions to productivity growth, purchasing power and consumer and investor confidence these bring.

“An extraordinary collective effort, built on social dialogue and focusing more directly on strengthening these cornerstones of national economic strength and social cohesion will be required if the world is to achieve its stated ambition of building back better – and faster – from the crisis,” he concluded.

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Widodo emphasizes importance of G20 focus on resilient health systems,

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The G20 and advanced economies must work together to create a more resilient and responsive global health architecture to face future threats and pandemics, said President Joko Widodo of Indonesia in his address to the Davos Agenda 2022.

He said the International Monetary Fund should be tasked to mobilize resources to revitalize global health architecture. This should include a global contingency fund for medical supplies, building capacity in developing countries to manufacture vaccines and the creation of global health protocols and standards.

“The costs will be much lower than the losses we sustained due to the vulnerability of the system during the pandemic,” he said.

In discussion with Klaus Schwab, Founder and Executive Chairman of the World Economic Forum, Widodo highlighted that “the G20 will play an important role in mobilizing the development of this global health architecture” and added: “I trust that advanced economies will not object to supporting such initiatives.”

Widodo – whose country holds the presidency of the G20 during 2022 – invited all global business leaders to contribute their ideas to the G20’s three key goals for 2022: creating a more resilient global health system; optimizing digital technology to support societal transformation; and driving a fair and affordable transition to clean energy and a circular economy. “The benefits must be felt by wider society,” he said, adding that six of Indonesia’s sectors are “wide open” for foreign investment – export-oriented labour-intensive industries (including health), renewable energy, infrastructure, automotive (especially electric vehicles), tourism and value-added mining.

In response to a question on how Indonesia – a nation heavily dependent on coal-fired power – could accelerate its own energy transition, Widodo said that developing countries need technology transfer and financial support from advanced economies to ensure the transition does not burden their citizens. Indonesia needs $50 billion for its renewable power sector and a further $37 billion for forestry, land use and marine sectors. “Concrete outcomes can only be achieved through strong cooperation,” he said. “Technology and financing will be key.”

The president pointed out that, as part of its roadmap to reach net zero by 2060, Indonesia had slashed the coverage area of forest fires sevenfold, from 1.7 million hectares in 2014 to 229,000 hectares in 2021. The number of hotspots fell over the same period from 89,000 to just 1,300. The country has restored 3.74 million hectares of peatlands since 2016 and rehabilitated 50,000 hectares of mangrove forests in the past year. Its mangrove-rehabilitation target is 600,000 hectares by 2024 – the most ambitious such programme in the world, providing, he said, a “carbon sink equivalent to four tropical forests”.

To finance the green transition, Widodo has initiated a carbon trading system that will deliver “results-based payments” for actions that reduce carbon emissions as well as a carbon tax on coal-fired power plants, due to start in April.

“Indonesia has the potential to be a global market leader in carbon trading and is predicted to surpass the carbon trade potential of Peru, Kenya and Brazil, as countries with the same tropical forest cover,” he said. The government also plans to raise capital by issuing environmental and social bonds, and through REDD+ projects that reduce deforestation and promote sustainable forest management.

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Davos Agenda Session on Space and Climate Opens Up New Frontiers

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European Space Agency astronaut Matthias Maurer connected live to a session on Thursday at the Davos Agenda 2022 from the International Space Station, somewhere high above the Pacific, to discuss how space research can improve life on Earth.

While in orbit on a six-month mission with the European Space Agency (ESA), Maurer will support a wide range of science experiments and technological research, including those that address transmissions of disease, the reduction of carbon emissions and human health-related activities. Knowledge gained through his mission will contribute to development that benefits life on Earth.

“We have worked hard in the past few weeks and months to send back cargo that we harvested for scientists to analyse all these samples that we produced in space, and to produce science and knowledge for humanity out of it,” he said.

He added that the cross-country and international collaboration aboard the space station should also be a model for how the world tackles major challenges, such as climate change. From his view, Maurer described the beauty of the planet, but also pointed out that he could see the impact of climate change from space.

“When we fly around the Earth (16 times a day), we cross over areas that are very arid and dry and I can see scars on the planet where people are digging deep to extract resources. So we are actively reshaping the planet. We are cutting down trees and burning down rainforests. I see the flames. I also see the flooding.”

Back on Earth, Al Gore, Vice-President of the United States (1993-2001); Chairman and Co-Founder, Generation Investment Management, explained how space technology and artificial intelligence can help address climate action. He highlighted the work of Climate TRACE, a global coalition created to make meaningful climate action faster and easier by independently tracking greenhouse gas emissions with unprecedented detail and speed.

“Some things you can see directly from space, like methane, but the difficulty of measuring CO2 emissions against a highly varied CO2 background on the Earth make it necessary to use AI to get precision we need,” he said. He added that if you consider something like GPS, it is clear how quickly the opportunities offered by space tech and space exploration can become integrated into our lives.

But the data and knowledge that is gained from space should not be limited to those who own satellites, said Sarah Al Amiri, Minister of State for Advanced Technology, Ministry of Industry and Advanced Technology of the United Arab Emirates. “If only countries with access to satellites get access to the data, we deny other countries the opportunity to benefit from that knowledge,” she said.

According to the World Economic Forum’s Global Risks Report 2022, space is increasingly crowded and commercialized. While the diversification of actors is for many an exciting development, dated space governance frameworks are coming under considerable pressure, exposing fault lines between the ambitions of different players and the acceptability of their actions.

Echoing this message, Josef Aschbacher, Director-General of the ESA, noted that the volume of satellites indicates that regulation is important.

However, it will have to keep up with a fast-changing industry, which, according to Chris Kemp, the Founder, Chairman and Chief Executive Officer of Astra, is currently seeing a revolution of sorts. “Access is increasing all the time thanks to significant falls in the cost of putting satellites into space and this has enabled a new generation of entrepreneurs to build companies, to take these companies public and provide new capabilities.”

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World Economic Forum Annual Meeting rescheduled to 22-26 May

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The World Economic Forum is pleased to announce that it will hold its Annual Meeting 2022 in Davos-Klosters, Switzerland, from Sunday 22 to Thursday 26 May. Under the theme, Working Together, Restoring Trust, the Annual Meeting 2022 will be the first global in-person leadership event since the start of the pandemic.

The Annual Meeting 2022, returning to Davos-Klosters after a two-year hiatus, will offer world leaders an opportunity to take stock of the state of the world and shape partnerships and policies for the crucial period ahead.

Topics on the agenda will include the pandemic recovery, tackling climate change, building a better future for work, accelerating stakeholder capitalism, and harnessing the technologies of the Fourth Industrial Revolution.

Klaus Schwab, Founder and Executive Chairman, World Economic Forum, said: “After all the virtual meetings taking place in the last two years, leaders from politics, business and civil society have to convene finally in person again. We need to establish the atmosphere of trust that is truly needed to accelerate collaborative action and to address the multiple challenges we face.”

The World Economic Forum will continue to communicate closely with the Swiss government on the public health situation in Switzerland. The meeting will take place as long as all necessary conditions are in place to guarantee the health and safety of its participants and the host community.

During the Davos Agenda 2022, heads of state and government and international organizations shared their priorities for a challenging year ahead. They joined leaders from business and civil society and spoke on the global economic outlook, inequality, healthy futures, climate and resilience.

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