Thought Leader: Juan Somavia

July 2, 2012

As part of the Carnegie Council Centennial Thought Leaders Forum, Carnegie Council's Devin Stewart spoke with Juan Somavia. Mr. Somavia is director-general of the International Labour Organization, a position he has held since 1998.

DEVIN STEWART: Mr. Somavia, tell me about your opinion of managing the ILO [International Labour Organization]. What was the biggest labor issue that you saw?

JUAN SOMAVIA: I think that the biggest issue today is the need to reduce global unemployment, which is at the highest level ever; and the need to address youth unemployment, which is also at the highest level ever. But these things are not done from one day to the other, so you have to have a vision. The vision we have developed in the ILO, which has had global support, is to acknowledge that what people are saying is, "Give me a decent job, give me the opportunity of a decent job, and I'll do the rest."

If I have to say something that I've learned, it is that in order for ILO policies to be relevant, you have to listen to people.

DEVIN STEWART: What is the state of labor in the world today?

JUAN SOMAVIA: The situation is 200 million people unemployed, and growing, people that have gone out of the labor force. If we want to begin reducing the unemployment level and be able to cope with the quantity of people coming into the labor market, we are talking about creating 50 million jobs a year.

Now, the way we are going, we are not going to make it. So certainly we need a change of direction, we need a change of policies. This is basically what the ILO is about today, what it has been about for the whole period in which we have put the Decent Work Agenda in place.

Before this crisis that we are living through, there was already a crisis of a growth and globalization model that was not producing enough jobs and was producing a lot of inequality.

DEVIN STEWART: What are the main policy recommendations?

JUAN SOMAVIA: Essentially, we have to take a look at the growth and globalization policies and say: "Look, do we want growth that produces more jobs? The answer is yes. Can we put in place policies that produce more jobs? Yes." The main policy line, the main policy objective is to put the financial economy that has run out of course into the service of the real economy.

The problem is that over the last 30 years in which this progressive deregulation of the financial economy has taken place, it has taken resources out of the real economy and put them in the casino economy that we have finally put together as a result of this deregulation.

We have to go back to the old system: Banks receive savings and they put them at the service of investments, and people who would take certain risks in their investments will create jobs, will create consumption, et cetera.

I would say that one thing that we need to do is to put the financial system under control. It is today not under control. We have read, even these days, that some banks at least try to manipulate interest rates. That is quite incredible. So put the financial system under control and make sure that you begin funding small enterprises, which are the ones that really create the jobs.

We need to get into another cycle in which ethics is going to play a very major role. Ethics are sort of run out of the way you manage the financial systems.

DEVIN STEWART: Speaking of ethics, what are the responsibilities of employers and job candidates?

JUAN SOMAVIA: I think that basically we need a multi-stakeholder solution here. If we really want to have a labor market and the recognition that the quality of work defines the quality of a society—and that's the ethical link—then we have to take a look at what is the meaning of work.

Today, work is seen as a cost of production, which it is, but it has to be as low as possible in order to be competitive in a global economy. At the same time, the worker is seen as a consumer. So the hope is that he has as much income as possible in order to consume.

Since there is no relationship today between profits and productivity, on the one side, and wages, which have been kept stable, while profits and productivity have gone up, then you deal with the vacuum through credit, and everybody is indebted in different ways.

The fact is that we all know that work is a source of personal dignity, it is a source of family stability, it is a source of peace in the community, it is a source of credibility of the governance systems, public and private.

So the first thing, which is a long-term one, is: Why don't we all assume that work is much more than an economic phenomenon, and that unless we recognize that, it is going to be very difficult to have cohesive, stable, integrated societies. That is the valuation. That is what you could almost call an ethical vision, the recognition that work has a social value that goes much beyond its economic expression.

On the other hand, you need to have economic and social policies that actually put work as having some fundamental priority in society. That is not the case today. Today, the criteria for success is growth—you grow, you have a great macroeconomic policy.

Then people say, "Hey, low inflation, low interest rates, high levels of growth"—not the situation today, but it has been in the past—"so we have a great macroeconomic policy. Unfortunately, we have not created enough jobs. But we'll see what we do about it."

So you've got to change around the criteria with which you judge the success of your policies. I think that what people would like to see—they are not seeing that today—is decent work, the quality of work, the quality of work for everybody, and the quality of work for youth in particular, as a key objective of policies.

DEVIN STEWART: Looking at youth unemployment, do you see a correlation between youth unemployment and political instability?

JUAN SOMAVIA: I think that the correlation is between youth unemployment and loss of hope, youth unemployment and loss of dignity, youth unemployment and loss of trust.

When all of these things begin to happen to you, the way you look at society is that this is a hostile atmosphere for me, for the poorest and the most vulnerable people, clearly in terms of simply access to essential needs.

For a young person coming out of university with a title, with the hope that that title will help that person go ahead in life, they say: "Why wasn't I told that it doesn't work this way?"

So what you are having—but not only with young people—is the disconnect between citizens and the political systems and the governance systems. It can be with political parties, it can be with governments.

It is definitely today with the financial system. It can be with certain attitudes of business. But the feeling of the normal person, that you are not the key object of policies; some way, somehow, other interests are the ones that are at the heart of policies. This is producing this disconnect, which is very clear in lots of societies.

DEVIN STEWART: I think this is a perfect segue over to our bigger Thought Leaders questions.

How would you define the time we live in today in a moral sense? Have you thought about how today's world is unique from previous times in history?

JUAN SOMAVIA: Let me look at it from the space in which I am today located or I have been active in my own life, which is policies to make the world better, if I can put it that way.

What you feel is that we now have a growth and globalization model without a moral compass. You are missing the moral compass. Okay, yes, we may have globalization, we have more interconnectedness, lots of things are happening, more trade. But what's the moral compass? You have the feeling that the compass is "If you can get away with it, it's all right. If you are not found out, okay."

So cutting corners, not really worrying about those around you who see you do those things, worry too much, you give a sense that that's the normal. I believe that that is very strongly embedded in the way we have developed, I would say, in the last 30-40 years.

DEVIN STEWART: What has led to that state of affairs?

JUAN SOMAVIA: I think that sort of an over-significance, an effort at reducing the checks and balances that our societies had between the market, society itself, public policy, business.

In the course of history, and particularly after the crisis of the 1920s, those checks and balances were put together in different ways. But in the course of the 1970s, but particularly the beginning of the 1980s, the notion was: Look, those checks and balances are not really useful, they're putting obstacles to growth and they're putting obstacles to the manner in which our economic systems evolve, so let's take some basic decisions.

  • First, deregulation is always better than regulation. So let's deregulate as much as we can because objectively that is better.

  • If there are obstacles, then the problem is the government—government is not the solution, it's the problem.

  • If you think that there should be some sense of fairness between growth, productivity, profits, and wages, you say, "Let's do one thing: let's first grow and distribute later."

So a series of things like that began to emerge in the 1980s, which did away with the checks and balances.

Where the thing really got off the rails was with the deregulation of the financial system, in which there are practically no checks and balances and where an ethical view of what a bank should be about has been totally lost. We have observed the way people play with other people's money. We've all heard that formulation. It's absolutely true and it is central.

The fact that we have even now found out that certain banks were manipulating the LIBOR interest rates, which are used to set a series of other interest rates—it's amazing. So we need to put absolutely under control—if we are talking about ethics and we are talking about moral compass, the financial system is out of control, and it has to be put in control.

Now, the only ones that can do that are the politicians and political system. It's political leadership, it's people in Congress, it's people realizing that you need to reestablish the balance and put the priority first in terms of the real economy, of investing in the real economy, and consequently putting the financial system at the service of the real economy.

DEVIN STEWART: Are things getting worse or better today?

JUAN SOMAVIA: I would say that today they are looking worse. We are four years into a crisis, so I'm talking very much about the conjuncture in which we are living.

Some of the things that we have been talking about, in terms of looking towards out-of-the-box ideas to get out of the crisis, seem evident for a lot of people, like putting jobs at the heart of the recovery, quality jobs at the heart of the recovery.

But they don't happen. So there is a legitimate question of people wanting to know what values are presiding in our society and what role does the respect for rights of people, the respect for the dignity of the individual, the respect for the role of the family play in a society.

The respect for the community, the respect for the different places in which people exist, live, develop their whole life, doesn't seem to be there. I mean there may be speeches, there may be discourses, but in terms of the practical things that you see happen, they seem to be absent.

DEVIN STEWART: One of the concepts we have been trying to develop, or at least explore, is the notion of a global ethic. Is that possible or viable; and, if so, what does it mean to you?

JUAN SOMAVIA: I think it's a complicated thing to think about, to try to identify a global ethic.

What comes to mind, first of all, is are you coherent with your own values, are you coherent with what you consider to be a moral or an ethical approach? I think that that's the first thing that you think about. If you had an individual global commitment to act within the values that we ourselves espouse, at least publicly, that would certainly be a big advance forward.

Now, not all values are going to coincide, so you may have some differences. But if you take a look at the history of humanity, you will find that the spiritual traditions of the world share very much more of values than of differences that do exist. But it's not just by formulating them; it's by living them.

DEVIN STEWART: What are some of those values that are common among civilizations?

JUAN SOMAVIA: I think that it may come to very simple things: don't steal; the respect for children. These are not grandiose things. That's why I link it very much to the personal thing, to your personal approaches and to the way you look at it. Norms and codes have existed forever. So it is not about saying, "Here we have a sort of mesh of all codes." I don't think that's the way to go at it. It's much more an issue of the coherence with yourself and the values that you may have.

Also, the whole issue of moral leadership emerges in all of these questions. I think that what happens is that nobody can say, "Look, I am a moral leader." That is said by others. So it's the consequence of the way you act, it's the consequence of the way you are.

If I put this at an individual level, it's that we do need to be able to connect ourselves, not just with the values that we say we espouse, but also with the capacity for your inner reflection. If I could say it somehow, it's to get your mind out of your soul. The mind has the capacity to be an obstacle to the manner in which you actually want to be yourself, the mind living in society, the mind being educated, the mind being formed in a certain way, the mind responding to the context of what should be rather than what you feel internally or what you think that they should be.

So there is an external dimension, which is the manner in which you live your life, but there is also an internal one, which is the manner in which you liberate yourself from the constraints that have been put to you by the society in which you live. Now, how do you manage all of that? It's a complicated thing to do.

But if you have a sense that you are being yourself, I think that is probably good. That, as a collective, as a shared approach, as a manner in which other people live—also, you identify with others who are doing that same thing—produces a much bigger space for what could be global ethics, global consciousness, global awareness. There are many ways of looking at it. But I think that it stems from the individual and not from an external norm to which you have to conform.

DEVIN STEWART: Mr. Somavia, are you speaking about a certain moral or value of selflessness? Is that what you're getting at, or is it something else?

JUAN SOMAVIA: Well, it depends. My English is not the best, so I wouldn't know the exact translation into Spanish, which is my language.

But I think that what I am trying to say is that you have to be able to follow yourself. What does that mean? Following yourself may mean that you want to change society. It may mean that you are going to fight for independence in your country. It may mean that you are part of the apartheid. It may mean if you are in business that you want to see a different ethical framework for business, or if you are a worker, that you want to organize workers.

The fact that it stems from an individual understanding of yourself does not mean that you are not an active actor in society. Both things are perfectly feasible and possible, combinable, and sometimes necessary. In that process, you move into struggles, because there are going to be interests, forces, ideas, ideologies, that do not like what you may be wanting to change.

So yes, it's out of that that come the notions of nonviolence, of active resistance, of a number of ways that can be reflective very strongly of your moral convictions and yet bring you into conflict. So it doesn't necessarily mean that you will not go into conflict. If you think of Gandhi or you think of Martin Luther King or you think of Belau [phonetic] ???, or Aung San Suu Kyi who came to the ILO just 15 days ago, you see that reality in action.

But that tension is something that we can all carry, and we can all have our own space in which we are wanting to see something happen and we want to dedicate part of our lives to make that good happen. I think that that's the essence, in fact, of a moral approach to things.

DEVIN STEWART: What do you see as the biggest ethical challenge facing the world today?

JUAN SOMAVIA: Having ethics.

DEVIN STEWART: Do you want to elaborate?

JUAN SOMAVIA: It's a bit what I said before. It's not there. Having a moral compass in the way you look at societies, at events, at things, and where you are placed, the eyes with which you look at others.

This is the other thing. This is not about, "I find myself in the right place, and consequently I have a right to judge others." The need is to understand the other. The need is to see where the other comes from. The need is to ask yourself whether you have all the necessary capacities to do that.

In a world in which, if we want really to be connected—we talk a lot about connectedness in today's world—but if you really want to be connected, it's not just what the Internet and all the new information communication technologies permit; it's about understanding that we live in a multilingual world, in a multicultural world, in a very multinational world, in a multi-stakeholder world. If you really want to be connected, you have to be connected in all of these different spaces.

So sometimes you see someone who says that connectedness has grown enormously, and if you look at it from this other perspective, you say, "Well, but, my god, the amount of connectedness that is lacking there, because people can't relate in other people's language, they don't know very much about other nationalities, they haven't been in touch with other cultures."

So if we really want a world that is much more integrated and much more at peace, these are the things that need to develop.

DEVIN STEWART: If we don't, what's at stake or what happens?

JUAN SOMAVIA: A progressive fragmentation. We are going to have a global economy that is apparently more integrated. I say "apparently" because we have to see what happens in the next 10 years. We already see protectionism emerging and a number of things that can make the present setup change.

But if not, you are going to have a disconnect. If we do not have policies and visions of our future and of what our societies should be like, this disconnect of citizens, of individuals, of people, from the way things are going, you are going to have a sort of an inward involution, which is a little bit there.

But it has been stimulated also by the types of policies that we have been promoting for the last 30 years. In the end, the policies have said: "Look, in the end you've got to manage the problems, you've got to manage your life, and life is not easy, it's difficult. So go ahead and do it. If you don't do it, you're a failure."

These policies, this notion that it's only up to you, which is absolutely true—except that it's only up to you provided you get a basic social protection floor that permits you to enter into exercising your abilities, if those abilities and capacities have been developed.

But if you tell somebody that hasn't been able to enter grammar school, "Look, it's only up to you," they say, "Hey, come on." There is something that society has to put into the mix. Society today, in order to help that person to be up to living in a complex and difficult and competitive society, is through public policy. You can have all different forms of private engagement in that, which is perfectly alright and necessary, but the axis of private and public policies.

But when public policies are called—and we're told, "No, no, no, not too much public policy because that stimulates the initiative." And then you say, "What's the initiative if somebody hasn't been able to get to high school? So public policies can't help that person?" "No, no, no, no, because then their initiative is going to be stomped." There's something wrong with that approach.

So this is not just—it's the values that you transmit through the policies that you implement, even the values that you transmit through language. For example, we talk today about you and me, we have human capital. We have to ensure that human capital is well educated. But it's a very funny thing that you and I have to be called "capital" in order to be valued.

You talk about corporate citizenship. Citizenship, according to all of our constitutions, is about people, individuals. But suddenly the notion of citizen, with all the implications of the right of citizens to observe the manner in which authority is exercised and expresses itself through elections—suddenly the democratic process is translated into a state in which corporations play a very fundamental role, but they certainly don't have the same rights as citizens.

So the language itself begins to change perceptions and begins to tell you that this is the way things are. We almost don't realize that we fall into the use of that language without really questioning the deep meaning of what those formulations mean.

DEVIN STEWART: What would you like to see happen in the next 100 years?

JUAN SOMAVIA: That's a tough one. I don't think I'm up to it. If we can change the world for the better in the course of the next 20, 30 years, that would be absolutely great.

DEVIN STEWART: Do you think world peace is possible?

JUAN SOMAVIA: Yes. Yes, I think it is. I have been talking about the possibility of a better future, which is based on criticism of what is going on, on the recognition of the disquiet that is in the hearts of people, but also in the promise, in the promise that change can happen.

I believe that change can happen. To prove it you have all of the things that were said to be impossible—apartheid would never end, the Cold War would never end, we would never get rid of dictatorships in Latin America. We have gotten rid of all of them. Women would never vote, not to speak of a lot of other things. Societies, the world advances on these types of values.

So to say that we are stuck where we are, I don't think so. But we've had a pretty rough 30 years, because there has been an involution in relation to where we were in the 1950s and the 1960s, in which after the Second World War in Europe, in the United States, and in Japan was the moment in which middle classes were created. And how were they created? Because workers had wages that were linked to productivity and to the profits and things were more or less well balanced, and families could dream of having a house, a car, and in the case of the United States the American dream.

Well, that began to be lost as we moved into this last 30 years. So we are coming from very rough weather that has affected families enormously. But of course, if I believe in the things that we have been talking about, I also believe that change is possible. Part of that change is that, yes, peace—peace in the sense of inner peace, peace in the sense of peace in the community, peace in the sense of a country at peace with itself—and yes, also, peace among countries.

The whole notion of peace from the perspective of many of us is that peace has one foundation—it may not be the only one, but it is certainly a very big one—which is social justice. The constitution of the International Labor Organization is based on the notion that if you want peace, develop social justice. That hasn't happened all over the world, but we are in a complicated moment.

But yes, peace is possible.

DEVIN STEWART: Who is accountable for the things that you outlined today?

JUAN SOMAVIA: I think that somehow we all have to assume our own responsibilities. I can tell you who is accountable for the way globalization has gone: certain ideologies, ideas, that were propagated from the end of the 1970s, beginning of the 1980s, that actually took hold and became the paradigm, the growth and globalization paradigm that has now run its course and is in crisis. So I could very easily describe who is responsible, who should be accountable, etc. That needs to be done because it is a historical process and you need to understand how you got there and how you get out of it.

But in the end, I think it is also very much about all of us assuming the desire for change. This is a very major point, because part of all of these notions that have organized social life, and particularly the economy, is about saying, "Look, don't worry about these other things. Worry just about yourself. Don't think that you have a role to play in the manner in which your society is organized. Just go ahead and vote locally and regionally and nationally, and that's about it."

So there is a personal element involved in all of this, because it is very easy to say it's somebody else's problem and it's for somebody else to solve. I think that that is true. Certainly, one day the financial system will have to be held accountable for the things that they have done. That means not just the banks as institutions, but the individuals that manage these banks that permitted all of these things to happen. So yes, that will eventually happen.

But in terms of creating a social process, a social movement, a capacity in which a society is at some point carried by the desire to be different and to change, this is the sum of many things. Now, when those things begin to happen, leaderships emerge. But leaderships emerge normally when the conditions have become ripe. If not, you have the whole history of somebody that was ahead of his time or her time.

But not everybody finds himself or herself in that situation. If the movement in society can be adequately interpreted, then a society wants to move in a certain direction and you will have leaders that are capable of interpreting that.

In the meantime, you are going to have all sorts of mini-leaderships, if you want. But it's not the major movement. They want to make a particular point, will find a particular constituency to do it, and will express themselves politically, and then it will disappear because it hasn't had enough strength to represent the whole, the big part of society.

So yes, there will be accountabilities. There are accountabilities. The law is there for that. But not only the law, because there is also eventually moral accountability.

What I am seeing today—and I keep coming back to the financial system because I'm really struck by the level in which the lack of accountability actually developed, and we were surprised. How is it that that could happen? Not in terms that we didn't have a good regulatory system, which was weakened, although those that needed to perform that function didn't perform it well. No, it's the people involved that suddenly began to do things completely out of an ethical framework, considering it perfectly natural. The only limit was whether you were caught or not, whether you were found out or not. That, of course, has to bring to us the very strong notion of accountability.

DEVIN STEWART: Great, Mr. Somavia. That was excellent. Thank you so much.

Is there anything else that you want to add? It was very comprehensive.

JUAN SOMAVIA: Perfect. Thanks.

DEVIN STEWART: People are usually very tired after the interview or they want to fight somebody.

JUAN SOMAVIA: All right. For the moment I'm all right. Congratulations on what you are doing, truly, because, as you heard me say, it's so much a part of what we need to do, and it's so much a part of raising the consciousness level, making people think, and for you to be able to identify those that you feel can help this process along. So really, thanks a lot. I think it's a great, great thing that you're doing.