Public sector remains world's biggest employer, UN labour agency reports

16 October 2001

Despite years of downsizing and calls for privatization, the public sector remains the major formal employer worldwide, providing jobs for 435 million people in the year 2000, according to latest estimates by the International Labour Organization (ILO).

A new ILO report on the impact of decentralization and privatization on municipal services indicates limited interest in the private sector to fully provide certain services and a reluctance of local governments to completely hand over services to private providers. "Thus, public-private partnership has become a common feature in municipal services," the agency notes.

Even though competition seems to increase efficiency, it may alter labour relations and reduce the commitment of the workforce, according to the report. Gains in cost efficiency and flexibility that result from privatization and decentralization may frequently be attributed to declining working conditions such as less time off and higher workload or work intensity.

The ILO analysis insists that decentralization may result in the local authorities having insufficient financial resources to ensure conditions of decent work. At the same time, devolution to local governments may introduce more flexibility and improve efficiency. "There is a positive correlation between decent work, efficiency and the quality of services," said ILO expert Gabrielle Ullrich.

The ILO report is being discussed at a weeklong meeting which opened in Geneva on Monday, bringing together 50 representatives of governments, employer organizations and unions.

 

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