Homero Fuentes

Friedrich Ebert Foundation, Guatemala

Implementing the Copenhagen Commitments:
the Challenges of Globalization,
Unemployment and the Informal Economy

    Homero Fuentes stated that governments made a commitment to ensure that their economic and social policies enable all men and women to attain secure and sustainable livelihoods through freely chosen productive employment and work.

    This commitment required that governments take steps to guarantee increased levels of productivity, to create more jobs and adequate remuneration for the population and to enable their countries to enter world markets. On the issue of work and training, the governments made a commitment to ensure that at least 200,000 people have access to national training and professional education programs by the year 2000.

    He noted that, at least four factors are responsible for the problems and difficulties in employment:

1. The new world order and the rules of the international markets set by economic blocs that improve the processes of economic integration and globalization, all under the leadership of major multinationals.
2. Socio-economic, political and cultural conditions in a country whose social groups and sectors have been deeply divided as a result of 36 years of armed conflict.
3. The country’s demographic density.
4. The sharp increase in poverty.

    He noted that, in Guatemala, the unemployment rate for the 15 to 44 year age group made up of most indigenous poor people covered by social insurance increased from 31.2% in 1980 to 47.7% in 1996. There is a particularly wide disparity in the labour sector, especially in agriculture, which accounts for over 50% of the economically active population.

    In order for the job market to change, the country needs a bold labour policy that will ensure adequate remuneration that will provide the public with adequate spending power to match the cost of living. The country’s fiscal, credit and social policies must also ensure equitable distribution of salaries to enable the population to improve its standard of living while promoting economic growth without decreasing productivity. One of the major problems is that economic growth does not create adequate national savings for the investment needed to create new jobs and to stem the decrease in formal employment opportunities that has prevailed in the last three years. Based on the above, the outlook for a national policy should include compliance with the Peace Accords and the commitments made during the Copenhagen Summit, especially the agreement on socio-economic and agricultural issues.

    He suggested the following priorities:

• In order to attain the goal of full employment, the Guatemalan government should first make some major structural changes. At present, with the level of inequality in the country, it is impossible for Guatemala to comply with the commitments in the short term.
  
• In developing countries, globalization has brought increased workforce mobility and the introduction of the benefits of technological progress that has improved efficiency in the provision of services especially in the industrial, commercial and financial services sectors. The situation is different in economies that depend on agricultural exports and that do not require workers with high levels of education to ensure production.

    In the trade and service sectors, especially in the financial area, technological progress has made services more efficient. However, it has also created atypical labour relations in which employees do not have any social protection and decent remuneration.

    The government should put the Instituto Tècnico de Capacitación y Productividad (INTECAP) (technical institute for training and productivity) in charge of issues related to the promotion, education and training provided primarily to young people entering the job market.

    In the past few decades, micro-enterprises and small to medium-sized business sectors have created more jobs. However, this independent employment sector does not provide social protection, stable remuneration or respect basic employment rights and fails to provide access to health care, education and social security.
Three years after the Summit, discrimination on the grounds of religious belief, gender, age, civil status, origin and handicap is still widespread. In the past few years, legal initiatives have been introduced to protect children, youth and working women, however, there is a wave of strong resistance from conservative groups that have great influence in the national political arena.

    Homero Fuentes stated that Guatemala has no coherent labour policy. In the past three years, over 30,000 jobs have been eliminated in the public sector, the national budget does not make provision for sustained human-resource development in the public sector or in the country’s administration. The only concrete achievement was a policy that introduced a 20% salary adjustment in 1997 and 1998.

    The lack of a labour policy is evident in the lack of commitment to the abolition of child labour.

    Some positive steps have been made to comply with the Peace Accords and the commitments made at the Copenhagen Summit. They include the following programs developed by the Ministry of Labour and Social Welfare:

• The creation of a border control office to protect temporary migrant employees working in the agricultural sector in Mexico.
  
• The creation of an office to promote and encourage handicapped workers to return to the job market, as well as the support provided by the Ministry of Economy and international organizations in the development of micro-enterprises.
  
• The formation of the tripartite commission on international labour affairs to analyze, discuss and resolve problems caused by violations of the agreement.
  
• The 1997 creation of the Escuela Superior de Mediación y Conciliación (graduate school of mediation and conciliation).
  
• The development of training programs for those people demobilized after the end of the armed conflict.
  
• Business employment, education and training policies instituted by various national and international organizations.

    However, despite the above, Homero Fuentes believed that Guatemala was far from complying with the commitments made at the Copenhagen Summit in the short term. An objective assessment to be issued at the 2000 summit will show that some progress has been made in the area of full employment, the informal economy and the incorporation of vulnerable groups.


Homero Fuentes is with the Friedrich Ebert Foundation in Guatemala.