By Robert Evans
THE POTENTIAL for social unrest in Cyprus and some other European Union countries is higher than anywhere else in the world and the already yawning gaps between rich and poor, a major trigger, are likely to widen globally, the International Labour Organisation said yesterday.
In its annual World of Work Report, the ILO said social unrest – strikes, work stoppages, street protests and demonstrations – had increased in most countries since the economic and financial crisis that began in 2008.
But the risk, it said, “is highest among the EU-27 countries – it increased from 34 per cent in 2006-07 to 46 per cent in 2011-2012”. However, the risk was not evenly spread and had not grown in at least seven of the member states.
Those most vulnerable, the report said, were Cyprus, Czech Republic, Greece, Italy, Portugal, Slovenia and Spain. However the risk of social unrest had declined in Belgium, Germany, Finland, Slovakia and Sweden since 2010.
Overall, the risk of unrest in the EU “is likely to be due to the policy responses to the ongoing sovereign debt crisis and their impact on people’s lives and perceptions of well-being”, the United Nations agency said.
“This bleak economic scenario has created a fragile social environment as fewer people see opportunities for obtaining a good job and improving their standard of living.”
The risk of social unrest had also risen in Russia and non-EU countries of the former communist bloc, as well as in South Asia and in advanced economies outside the EU.
But it had declined in Latin America and the Caribbean, where governments had followed employment-boosting policies, in the growing economies of sub-Saharan Africa and in East and in South-East Asia and the Pacific.
The ILO said it based its findings on correlating economic growth and income levels with inflation, unemployment, debt as a share of economic output or GDP, and income inequality – all factors which influence levels of social tension.
Government austerity policies of the last few years had been accompanied since 2010 by increasing wage inequalities in which middle-income groups’ revenues declined and those of top salary earners began to grow again, it declared.
Across the richer countries, profit margins for larger companies were rising, as reflected in booming stock markets, and were now at levels similar to those of the immediate pre-crisis years, the ILO said.
“But rather than putting these profits to work through productive investment in the real economy, increased revenues have more often been channelled towards higher cash holdings,” the agency said.
Global unemployment rates were also expected to rise, the report said. In the EU and other developed countries the real employment rate, taking into account the growth in the working-age population, was unlikely to recover until 2018 to the level at which it stood before the crisis.