Does DFID’s new Economic Development Strategy imply that they are willing to countenance low labour standards from businesses whose growth they support?

by 27th Apr 2017
A garment worker in Bangladesh on her way to the factory A garment worker in Bangladesh on her way to the factory

Given DFID’s commitment to the Global Goals and to labour standards (eg support of the ETI, guidance within CDC), why doesn’t DFID’s new Economic Development Strategy talk about Decent Work?

DFID’s recently published Economic Development Strategy – as I have noted in another Insights blog – pays a lot of attention to job creation, focusing on the importance of investment to create those jobs: “Our ambition must be to create an unprecedented increase in the number and quality of jobs in poor countries” (Foreword from the Secretary of State). We welcome this commitment and in particular a focus on an increase in the quality of jobs, as we know that the wrong kind of jobs – insecure, high-pressure, badly paid, subject to gender-based violence and allowing women no say in how they are treated – do not empower women. We also believe that they do not lead to wider development (although the evidence around this seems scarce, and I would love to hear from anyone who can point me to any).

However, a notable absence from the Strategy document is any definition of “quality of jobs” or how it relates to the ILO’s Decent Work Agenda. Now, we should not make too much fuss just about a headline term. We at CARE ourselves talk about “Dignified Work”, but we have set out how this concept relates to the ILO’s Decent Work Agenda. Which DFID have not done in their Strategy.

In contrast, the EU Commission Communication on A Stronger Role of the Private Sector in Achieving Inclusive and Sustainable Growth in Developing Countries of 2014 (a document that is intended to serve a similar purpose to the DFID Economic Development Strategy, but which has fewer pictures and far less variety of fonts) includes wide-ranging commitments to Decent Work.

But DFID are not alone in their position. A recent report by ODI, commissioned by the Trade Union Development Cooperation Network - International Trade Union Confederation (TUDCN-ITUC), which looks at the UK, Japan, France, Sweden, and the USA, points out that “Decent work is not a stated guiding principle for the donors analysed in this report”. The report goes on to recommend a “Decent Work marker” in the style of the OECD gender equality marker (but that’s a discussion for another day).

DFID’s position however is somewhat surprising given the role that the Strategy appears to see for jobs in delivering the Global Goals: “… growth that transforms economies; that creates productive jobs and private sector investment … is essential to eradicate extreme poverty, deliver the Global Goals that the world adopted in 2015 and end reliance on aid.” (my emphasis)

Global Goal 8 (on work and productivity) explicitly references decent work: “Promote development-oriented policies that support productive activities, decent job creation, entrepreneurship, creativity and innovation, and encourage the formalization and growth of micro-, small- and medium-sized enterprises…” (my emphasis). So why do the phrases “decent work” and “decent jobs” not appear at all in the Economic Development Strategy?

There may be arguments that what DFID is aiming at in its Economic Development Strategy is not easily susceptible to the Decent Work Agenda. For instance, the Strategy highlights “Focusing on the poorest and most marginalised people, the majority of whom work in the informal sector”. We definitely welcome this commitment to the informal sector, but it is worth noting that the ILO itself recognises that its Decent Work Agenda does not easily address the issues in the informal sector. Instead, it has developed its Recommendation concerning the transition from the informal to the formal economy (R204, 2015) which highlights the policy approach required to support workers into the formal economy.

Turning to the formal sector – where, from the general thrust of the Strategy, one can expect DFID to be providing lots of support in its vision of inward investment-led growth – the Ethical Trading Initiative (ETI), which DFID directly supports, has at the core of its activities a commitment to ensuring the implementation of the ILO conventions which form the backbone of the Decent Work Agenda. The ETI is a tripartite organisation which includes many of the largest UK (and other) retailers who are buying products from developing countries – exactly the connection to global value chains that the Strategy puts a high value on.

Similarly, CDC (“As the UK’s development finance institution, CDC is our principal partner on Development Capital” – the Economic Development Strategy) has guidelines for fund managers on labour standards which start by saying “Economic growth through employment creation and income generation should be balanced with protecting workers’ basic rights and the guarantee of decent work.”

So is there thinking in DFID that they want to reach groups who are only likely to get jobs somewhere between the truly informal sector and the export sector, where Decent Work may be harder to achieve? In that case they need to explain what they are trying to achieve and how they intend to achieve it without infringing people’s rights. There may be an “end justifies the means” argument, but it is not clear what it is. There does not seem to be much research on how decent work inter-relates with the earlier stages of economic development (although this article by Chris Blattman and Stefan Dercon points to some of the issues in the early stages of manufacturing development). But there is evidence of how elements of decent work contribute to improving productivity – in a way that DFID would surely welcome as progress towards a modern manufacturing economy.

The risk for DFID in all of this is that, until they define with some precision what they mean by “better quality jobs”, and how it relates to Decent Work, there is going to be at least confusion, and potentially the suspicion that DFID are willing to countenance low labour standards in the businesses whose growth it plans to support.

Gerry Boyle

Gerry led CARE International UK’s policy analysis and advocacy around value chains and dignified work. He originally joined CARE as the Senior Policy Adviser on Private Sector Engagement. With the advent of our new Global Programme Strategy which put a particular emphasis on women’s economic empowerment, his focus changed a little.

Gerry co-chaired the Bond Private Sector Working Group. Immediately before he joined CARE he worked for Oxfam as Head of Business Relations for about three years, but the vast majority of his career was spent as a management consultant including being a consulting Partner at Deloitte, where for a time he led Deloitte UK’s Consumer Business consulting practice, serving many major multinationals. Gerry's original degree was in Law from Oxford University, and in 2008 when he left Deloitte he did an MSc in Philosophy and Public Policy at LSE.

One good thing I've read

Amartya Sen’s Development as Freedom. It provides a framework for many people’s modern understanding of what is development, based on a profoundly human-centred approach rather than anything instrumental. And to check whether one personally is doing enough to fight poverty, I recommend Peter Singer’s The life you can save: Acting now to end world poverty – it’s very clear and easy to read but very challenging! Finally, Ha-Joon Chang’s Bad Samaritans: Rich nations, poor policies, and the threat to the developing world is a very readable guide to economic development which argues strongly against many of the prevailing orthodoxies.

Twitter: @gerryboyle10