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Meeting with APEC member economies’ trade union leaders

September 3, 2012, Novo-Ogaryovo, Moscow Region

Vladimir Putin met with members of the Asia Pacific Labour Network of the ICFTU (International Confederation of Free Trade Unions) in the run-up to the APEC summit in Vladivostok.

Economic integration and protecting people’s labour and social rights were the subjects of discussion.

* * *

President of Russia Vladimir Putin: Good afternoon, ladies and gentlemen. It is a great pleasure to meet with trade union leaders in the run-up to the APEC summit in Vladivostok.

We have been a long time preparing for this event, the main theme of which, as you know, is liberalising free trade. This is a traditional theme for the Asia-Pacific economies and the APEC forum and it is a very important and relevant issue in the world today given the complex processes underway in the global economy.

But at the same time, the Asia-Pacific region, the part of the world that will be represented at the summit in Vladivostok, in Russia’s Far East, is the global economy’s big hope, as you know well. After all, this is the only part of the world where we can still see some rapid economic growth. In 2011, average global GDP growth was 3.9 percent, but the average was 4.1 percent in the Asia-Pacific region. This includes the relatively modest results posted by the US and Japanese economies, but overall, the Asian region leaders have been showing good results. We know, however, that even in these countries there are also some trends that oblige us to keep a close eye on the whole situation.

The trade unions and their leaders focus above all on social issues, employment, and labour market development of course. I had the pleasure of speaking recently in Geneva at a big trade union event organised by the International Labour Organisation, and this gave me the chance to immerse myself in what your colleagues are doing and learn about the issues uppermost on their minds. It is only natural that trade union leaders concentrate above all on labour market and workers’ issues, but taking part in that event made me realise just how lively and professional these discussions are, and, without exaggerating at all, how close to heart the trade union leaders take the issues facing workers. 

This all goes to show that today’s meeting, as I see it, is very useful and needed, as it gives me and the person who will head Russia’s delegation – and Russia is the summit’s host country – the chance to take into account your views on what is going on in the world and hear your advice and recommendations. I hope we will talk about these things in more depth today.

I want to say at the outset that the Russian Federation and its government have done a lot lately to support workers, and will continue these efforts.

We worked very hard during the serious crisis that hit the global economy in 2009–2010. Our unemployment level jumped up sharply then, but the measures we took brought it back down to the pre-crisis level and indeed, we have done even better and now have an unemployment level lower than the 2008–2009 pre-crisis level.

Our average national unemployment level is now 5.1–5.2 percent. This is a decent result. Our goal now is not just to keep reducing this level, but to reformat our labour market. We have set ourselves the ambitious target of creating 25 million new jobs. Some of these jobs will be created from scratch, while others will be created by reformatting existing jobs. The primary objective is to get people doing more skilled and better paid work.

Colleagues, I note in this respect that so far, we have been successful in reaching a consensus between the executive authorities and the trade unions, and I thank the leaders of Russia’s independent trade unions for this. I think this is very important not just here, but in any country, especially at a time of economic crisis. We always should look for and ensure the balance between rising labour costs, social guarantees, and economic development opportunities because we all know that only through robust economic development can we ultimately achieve our common aims, namely, the goal of raising our peoples’ living standards and wellbeing.

This is what I wanted to say for a start. I am sure that we will have a substantial and interesting discussion. I thank you for finding the time for today’s meeting. Thank you very much for your attention.

Thank you for your attention. I give the floor to Chairman of the Federation of Independent Trade Unions of Russia Mikhail Shmakov.

chairman of the Independent Trade Unions Federation Mikhail SHMAKOV: Thank you, Mr Putin. First of all, I would like to thank you on behalf of our delegation for preserving the APEC summit traditions, when trade union delegations meet with the leader of the host country.

Present here today are the executives of the International Trade Union Confederation and the trade union leaders from several major countries in the region of the Asia-Pacific Economic Cooperation.

Our main objective today is to impart to you, as the Russian leader and the host of the summit which will take place in Vladivostok at the end of this week, our vision of the current challenges in the global economy, and, most importantly, in the Asia- Pacific region, and what steps we believe the region’s governments should take to ensure both economic efficiency and employees’ social protection.

As you rightly noted, this is the most intensely and rapidly growing region in economic terms, but sometimes the workers’ interests are sacrificed to boost economic development. There is the age-old conflict between labour and capital, between high profits and employees’ security. We believe that you, as the leader of our country, the leader of Russia, can convey the trade unions’ position to the leaders of other countries in the course of the APEC Summit.

Thus, I believe we will be able to move forward on this theatre of economic activity the issues that have been discussed at G8 and G20 summits: consideration for employees’ positions and consideration for global trade unions’ positions.

We realise that we cannot dictate anything to anyone, and that is not our goal. Nevertheless, as we live in an increasingly open society, we must listen to each other. The workers and trade unions want to listen to and to some degree contribute to their countries’ economic development since the welfare of people in these countries ultimately depends on this. Equally, we believe that the countries’ leadership and business management should take heed of the problems that we outline.

Here in Russia such social dialogue is up and running, largely through your efforts and due to the country's development over the past 12 to 15 years. We would like to see such social dialogue become global, so that we can discuss any problems and make decisions that are satisfactory to all three parties: the national governments, the business community, or the employers, the trade unions and the workers in our countries. We have prepared a statement for the summit, and I would like to ask Sharan Burrow to summarise this statement and report on the most important points.

General Secretary of the International Confederation of Free Trade Unions Sharan Burrow: Thank you, Mr. President, thank you, Mikhail. I must say, we are honored to meet with you, and very pleased to be here with our Russian brother — you know, he's also the president of PERC, the Pan-European Regional Council of the ITUC. Indeed, this covers one of the largest regions in the world if you take it from Vladivostok, which we really think is in Asia — I come from Australia, so I'm a little biased, and I think this is a very nice mix, the Asian APEC Russian league.

But look, we know that the world's in crisis. Russia looks very, very peaceful and stable. I congratulate you on the unemployment levels. Although I think we share a couple of problems with the rest of the world, and we need your leadership. If I can say that this is going to be the year of Russia, and so your leadership for us is crucial — you have the APEC, you have the Decent Work Conference that you yourself have sponsored in December. This is a magical opportunity, I think, for us to explore a range of issues. And you have the G20 next year.

So very briefly, I want to put the context, and a couple of requests, on the table. The context for us is devastating. The crisis is now the matter of unemployment. And if you walk outside of Russia, and you talk to workers almost anywhere in the world, there are only a few countries, of which yours is one, that can claim the unemployment rate you have.

But even then, youth unemployment is an issue for all of us. In every country, it's somewhere between 20% and 70%. We are at risk of losing a generation of skills, of engagement, of purpose, and the social and economic time bomb that that constitutes is extraordinary. The ILO says in the next 10 years, we have to create 600 million jobs to accommodate the unemployment today. And 45 million young people will enter the labor force in the next 10 years without much hope of a secure job. So for us, jobs, jobs and jobs — that's the main issue, without doubt.

So, when you talk about trade liberalization, my question is: fine, but how do we talk together, with the employers, with the governments, about trade and investment that will generate jobs? Because we lived through trade liberalization — none of us is opposed to trade. None of us is a protectionist by ideology. But we lived through the late 1980s and '90s, when unemployment generated the social despair we see today.

In addition to that, when the speculative nature of finance is still untrammeled, when there are no rules and regulations that we can apply to stop speculative activity, then you put those two things together, and we're very frightened that unless we get the trade issues right, unless there's a social dimension, unless there are rules that guarantee a floor of trading fairness, and indeed, rights for workers — then the society we generate in the next 20 to 30 years, the economies we generate, will generate more unrest. So we need that dialogue to be robust.

I joined Pascal Lamy's panel to look at trade in the 21st century. I'm uncomfortable being there on some issues, but I'm very comfortable being there in debating how a fair trade system looks like. It's not like the old system, that's true. But it's not like anything we know — you can't go backwards, but you can't rely on those who simply say, trade liberalization, at any cost, without a social dimension, or indeed, without rules around investment and finances. So we would like to engage with you, with the governments, but as Mikhail said, on a global dialogue platform about this.

Now in the G20, we have instigated, we have institutionalized, the L20 — labor — and the B20 — business. And we will look forward next year to bringing you a joint agreement, which is our habit, with the business community — we spoke with Mr. Xiao Qin this morning — to put before you, as the leader, and before the other leaders. And we want to engage with you at the G20 leaders' meeting. But we also ask you to help us by supporting an ongoing process with labor ministers, and indeed, a dialogue that we have promoted, with business, a dialogue between us and labor and finance ministers. Because when these things are in silos, you can't deal with the complexities of today's world, as I'm sure you understand.

Can I say that, on the question of the current economic environment, in APEC, I agree with you, I'm very pro-Asian. As I said, I come from Australia. It was our previous prime minister, Paul Keating, who championed APEC and led us all into his cabinet room to talk about this endlessly. But we haven't seen them do anything for workers, and that's a sad thing for me to say. We've been asking for a labor forum to talk to governments and business right through and beyond the Asian crisis and up until the current crisis. We don't understand why governments don't want to hear the voice of labor — where you do, you have a very robust social dialogue institutional setting, as you just described. So we can use your help to convince people. We don't come as enemies, we come with suggestions.

And I want to leave you with the thought that, beyond our interest in rights and the plight of workers, which is our core business, we believe in sustainable business. You can't have sustainable jobs, secure jobs, if you don't have sustainable business. But one of the other issues that labor and business have put on the table for the G20, is the informal economy. It's growing everywhere, it's withering our formal economies and our sustainable business. And this is of interest to us. But also, we bring with us, when we demand investment, when we demand the scaling up of apprenticeships, when we demand action on the informal economy, or on rights as a framework for investment — we bring with us 25 trillion dollars of workers' capital around the world, our pension funds, that are actually contributing to the global economy. You add mutual funds, many of which we have set up, building societies, small banks, and you will find about 60 trillion dollars. So 25 trillion in pension funds, mutuals — add to that the largest source of capital in the world.

On 14 trillion of that, we are joint trustees. And I just spent a week in China, and they are taking in, in the next year or so, about a trillion US dollars a year in their system. Now, we have a right to actually talk to people about how that money is spent, how it is not used for abusive treatment of workers, but is used for patient capital, capital that will invest in sustainable business, not in speculative activity. So: rights, social protection, the questions of investment and employment, and coherence, are things that we need you to argue that labor should have a voice in.

So I suppose the real question for us, or the real issue, is to say to you, we want to work with you across these divides. We hope to work with your labor minister in a labor ministers' meeting, and we hope to work with you and the leaders in the G20 leaders' summit, as we have done through the B20 and L20. But we want you to think about APEC, and I agree with your assessment of its importance, and ask the question, why is the role of labor not bigger? Why is it, in the 21st century, the voice of labor, which is always useful when there's a crisis, is not there when we want to build fairer economies.

We thank you for the time, and I certainly look forward to working with you in the next 12 months.

Vladimir Putin: Thank you very much. I see that you were thrown in at the deep end, starting with the toughest part of our discussion. When we speak about liberalisation, the question immediately arises whether this liberalisation serves to address the most important problem. Our main task, as I have said already and I know that you agree with me on this, is to improve the living standards, providing people with jobs and means.

It is a well known fact that when the crisis strikes many countries shut down their borders and introduce protectionist measures in order to secure their industry and jobs. However, if such action is taken unilaterally, in the end – I stress this because initially it seems to protect the employees and the economy – in the end, it leads to economic stagnation in the modern world and to the curtailment of production, and therefore damages workers’ interests. But if we make sure that the rules on economic liberalisation adopted at such international forums as APEC apply equally to everyone and are equally implemented by all, it will lead to the fact that all the economies, including the leading and developing economies, will be able to make the best use of their competitive advantages. Eventually this will lead to the creation of many new and much demanded jobs, as you mentioned.

Forums like APEC are always aimed at developing such common solutions and then implementing them. Unfortunately, we realise that the World Trade Organisation, which Russia recently joined as a full member, as well as other venues sometimes adopt decisions that are not followed-up in practice by some countries or economies, which take advantage of various loopholes in international law, de facto closing some of their industries while trying to use the agreements reached at international forums to penetrate other countries’ markets. This is the very essence of the discussion and there is a lot of debate around it, as you know.

Just recently, I witnessed such discussions at the G20 Summit in Mexico. In the end we managed to reach some compromises. I think that we can achieve the same result here as well. In any case, our goal is to reach such compromises in order to promote the development of global economy.

To be honest, we were also forced to employ the mechanisms and take the steps I mentioned during the economic crisis, although we were not a member of the World Trade Organisation at the time. We did it with a heavy heart but there didn’t seem to be any alternative. I remember visiting one of our agricultural machinery manufacturers, when I saw that the whole territory of the plant was crowded with the machinery they had produced but could not sell, and I realised that the plant would simply go under within a few days. You have to think in such a situation what can be done to ensure the distribution of these products. But this was not a strategic decision, frankly, it had to do with short-term profits, whereas we must think about strategy.

But when we begin to think about strategy, I cannot help but take note of another point you have made that is very true. You said that in the previous decade, the value of financial transactions and generally speculation has become much higher than that of the real economy. This has led to some imbalances, and the reason this has happened is that the rules for the global economy are insufficiently clear and there have been some abuses of the rules that are formulated well.

This requires special attention to the manufacturing sector. I must say that representatives of business and industry, with whom I meet regularly, and not just Russian but representatives of all the major economies in the world (once again, I see them quite often) think so too. In this sense, their view is identical to yours. We must change a great deal in this sphere.

September 3, 2012, Novo-Ogaryovo, Moscow Region