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Claude Yvan
Claude Yvan
Yvan Claude completed a MB in political economy with degrees in Public Policy and Environment & Agenda 21 at Geneva University (Switzerland) . He also completed a certificate in Systemic science at John Hopkins (MD). Specialized in project management and assessment. President of gaea21 a non-profit


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Sustainabilty or viewpoint on the recession and current economic and employment situation

Dec. 21, 2009 3:47 pm
Categories: Sustainability

The current economic situation and its consequences on companies and employment: The world economy is in the midst of its deepest and most synchronized recession in our lifetime, caused by a global financial crisis and deepened by a collapse in world trade. Tight financial conditions and low confidence weighed on output and employment. In turn, shrinking activity and income is further undermining bank balance sheets, magnifying the downturn. An essential step to arresting the “economic haemorrhaging” that is ongoing is to devise and implement without delay a coherent strategy in every structure (be it a government department, a major organization, a bank or a small company) that squarely tackles the disarray occasioned by the mess in financial markets. But the solution is not individual. The solution is global, systemic, multidisciplinary and multi-sectoral.

It should be stressed upfront that there are exceptionally large uncertainties, associated with any forecast in the current climate, especially those related to the assumptions regarding the speed at which financial conditions improve and the effectiveness of the massive macroeconomic policy stimulus being implemented. Yet it would be a major mistake to address the situation from a macroeconomic point of view only. The issues that are to be addressed at this time are multiple (structural analysis behind the reasons for the economic crisis/ immediate solutions to dealing with the current circumstances/ applying long-term structural solutions) and must be addressed from a microeconomic viewpoint as well.

  1. The major consequence of the recession was that most companies in every sector of activity faced a major slowdown, which resulted in job losses. In other words, what began as a crisis in finance markets rapidly became a global jobs crisis. Unemployment is on the rise globally and despite the announced economy recovery. The number of working poor is increasing. Businesses are failing. Concern is growing over the balance, fairness and sustainability of the type of globalization we have had in the lead up to the financial crash. According to the International Labour Organization (ILO), more than 30 million jobs lost over the last eight months worldwide - about 20 million in China and India alone and about six million in the US. The impact of recession on societies will be substantial. Joblessness in all Organization for Economic Co-operation and Development(OECD) countries will rise sharply, with the rate of unemployment peaking in 2010 or early 2011 and, in many countries, reaching double-digit numbers for the first time since the 1990’s.
  2. This prospect underscores the need for employment and social politics to complement and reinforce macroeconomic stabilization efforts to get people into jobs and prevent, as far as possible, any rise in structural unemployment. At the same time, policies to cushion the impact of recession via effective social nets and schemes that targets those most vulnerable must be strengthened for the duration of the recession. Efforts are also needed to win broad public acceptance that the cost of these necessary measures will be large and will only be further increased by not acting promptly.
  3. If a closer analysis of the employment current situation is made, it appears that for every new job created in major economic sectors (industry and services) there are approximately 200 jobs created in the renewable energy sector and the green sector in general.
  4. The green sector is still in its infancy, therefore there’s a lot to be made and discovered in regards to research, industrial application, green services and related areas. Investing money in that sector will create new direct and indirect jobs and develop entrepreneurship, creating even more jobs and benefiting the economy as a whole. That is becoming knowledge. Now the question is how ? And do we have the means to assess the consequences of the varied stimulus plans. How to make sure we can actually create job and that money is not just going to stay in the banking systems and overfeed the already wealthy ?
  5. There is a need to coordinate the action in many sectors and invest "wisely" to create a positive systemic effect that is going to counter the ongoing universal consequences of our current system (financial, economical and social failure). Discretionary fiscal stimulus is already playing an important role in OECD and non-OECD countries. The need and scope for more ambitious stimulus than currently planned depends on country-specific circumstances, in particular the size of the negative impact of the crisis, the importance of automatic stabilizers and the level of public debt. Against these criteria, governments should consider further discretionary fiscal expansion. The sector in which to invest is definitively the green sector. This is a systemic (holistic) approach/solution to a systemic crisis that will include politics, institutions, companies and the private sector. It will also include universities and the educational sector as a whole for providing the necessary tools and educating the new employment sector.

There are solutions and ways that call for particular applications. These include a multisectorial, multidisciplinary and systemic approach:

  • Assess the situation and inform the public and different stakeholders;
  • Come up with interjectory solutions;
  • Make multidisciplinary teams and apply the solutions.

This is factual for every state and territories, political parties and/ or companies/ organizations through specialized coaching and training.

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