Nevertheless, carry-over from 2012 as well as the ongoing fiscal consolidation are projected to result in a further contraction of 4.4% of GDP in 2013. Investment is likely to continue underperforming in the short-run, as the majority of businesses still face liquidity constraints or wait to see more evidence of a pick-up of the economy. Though exports are projected to grow as the economy is improving its competitiveness, they are likely to remain subdued due to still weak external conditions. It is expected that these factors will continue to dominate for most of 2013, only partially compensated by the reversal of the liquidity squeeze, notably as the government plans to repay arrears for an amount of up to 4% of GDP. In line with this contraction in demand, the unemployment rate is now expected to peak at 27.0% in 2013.

The return to positive quarterly growth rates by end-2013 will be followed by positive full-year growth of 0.6% in 2014. This reflects ongoing positive supply-side developments. Reductions in unit labour costs (due to far-reaching labour market reforms) and product market liberalisation are expected to create new business opportunities and to encourage job creation once the economy picks up. In addition, the bank recapitalisation process and the overall stabilisation of the country are setting the preconditions for a return of capital to the country and renewed credit flows to the private sector. With a large part of the fiscal consolidation effort already legislated, consumers and investors appear to start regaining confidence which should strengthen domestic demand in 2014. Unemployment is nonetheless forecast to remain elevated at 25.7%.

Greater flexibility in wage bargaining arrangements drives the forecast for decreasing labour costs. Compensation per employee is projected to fall by 7.0% in 2013 and by 2.0% in 2014. Together with the effect of structural reforms in the product market, this is expected to translate into HICP deflation of 0.8% and 0.4% respectively in 2013 and 2014, leading to a significant inflation differential vis-a-vis the euro area average. This improvement in competitiveness, combined with euro-area recovery, should lead to export growth. The current-account deficit is expected to decrease from 7.7% of GDP in 2012 to 4.3% in 2013 and 3.3% in 2014.

In 2013 the government aims at primary balance followed by a primary surplus in 2014. This is supported by a package of savings measures amounting to 7.2% of GDP over 2013-14, which was adopted in November. Given interest payment reductions of almost 1% due to the debt-reducing measures adopted by the Eurogroup in late 2012, the overall government deficit in 2013 is now expected to be 4.6% of GDP. The structural balance is estimated to reach a surplus of 13⁄4%. Gross public debt is estimated at 162% of GDP in 2012, 15% of GDP lower than in the autumn 2012 forecast, mainly thanks to the debt buyback operation carried out in December 2012. The debt ratio is projected to increase to 176% of GDP in 2013 as the economy contracts, after which it is expected to fall at an accelerated pace, supported by an improving budget balance and stronger nominal GDP growth…”

New figures in the ILO’s Global Employment Trends 2013 show that 42 per cent of workers in developing countries – nearly 1.1 billion workers – are now “middle-class,” living with their families on more than US$4* per person per day. The rise is particularly marked in East Asia.

Since 2001, an additional 400 million workers have joined the ranks of the middle- class, with their incomes sufficient for their families to consume between US$4 and $13 a day per person. This is a doubling of the number of workers in the emerging middle class. A further 186 million workers are now living on more than $13 a day.

By 2017, the ILO estimates that an additional 390 million workers in the developing world could be middle-class.

“Over time, this emerging middle-class could give a much needed push to more balanced global growth by boosting consumption, particularly in poorer parts of the developing world,” said Steven Kapsos, one of the authors of the report.

Middle-class workers can invest more in health and education, leading to healthier and more productive lives. In turn, this means higher productivity and faster economic development, Kapsos explained.

The rise in the middle-class has been matched by a fall in the numbers of workers living in extreme poverty – living on less than US$1.25 a day. Some 397 million workers now fall in this category – a drop of 281 million since 2001.

Another 472 million are living on between US$1.25 and $2 a day, a drop of 35 million since 2001.

But the number of “near poor” -those living on between US$2 and $4 a day – has increased by 142 million in the past decade, making a total of 661 million people.

Many of these “near poor” are not covered by social insurance, and risk slipping back into poverty in the event of an economic crisis.

In South Asia, 92 per cent of the workforce is either poor or near poor, while in Sub-Saharan Africa, 86 per cent of workers are in these categories.

“Much work remains to be done to raise productivity levels and expand the number of quality jobs, in order to spur the growth of the developing world’s middle class.Unfortunately, the crisis affecting global labour markets threatens to slow progress,” concluded Kapsos.

The information portal known as the Africa Adaptation Knowledge Network (AAKNet), launched by the UN Environment Programme (UNEP), will serve as a hub for knowledge, research, successful initiatives and collaborative partnerships on climate change adaptation.

“It builds on ongoing efforts around the continent to mobilize existing knowledge and provide robust solutions to the major impact of climate change on lives and livelihoods in Africa,” the UN agency stated in a news release.

Disasters such as severe droughts in the Sahel in 2012 and the Horn of Africa in 2011, noted UNEP, have brought into sharp focus the serious impacts on water, land, soil and other resources linked to climate change on the continent, and the need to build resilience to such pressures.

Global warming is expected to pose serious challenges to sustainable development, particularly as most African economies depend on climate-sensitive sectors such as water, agriculture, fisheries, energy and tourism.

“Yet the region lacks the capacity and resources needed to face the challenges of climate change – a problem that could have major economic consequences,” stated UNEP.

The AAKNet aims to support climate change adaptation in Africa by providing services such as aggregating knowledge in addressing pertinent climatic risks and sharing information across regions and countries, and providing tailored support to countries in developing strategic planning processes for climate change adaptation.

It also seeks to build partnerships with governments, research bodies, non-governmental organizations and others, with the aim of supporting climate change response. To reach those directly affected by climate change, the AAKNet initiative will also conduct workshops with community organizations, farmers, and other groups, to share knowledge and practical advice.

The initiative comes as countries continue their negotiations at the UN Climate Change Conference in Doha, Qatar, hoping to reach agreements on issues such as the way forward on climate finance, a response to the widening emissions gap, and an extension of the Kyoto Protocol.

Under the 1997 Protocol, whose first commitment period expires at the end of 2012, 37 States – consisting of highly industrialized countries and countries undergoing the process of transition to a market economy – have legally binding emission limitation and reduction commitments.

Today at the conference, which brings together the 195 Parties to the UN Framework Convention on Climate Change, the parent treaty of the Kyoto Protocol, participants underlined their commitment to a range of priority actions, reviewed progress and pledged to re-double efforts to reduce short-lived climate pollutants (SLCPs).

Six new countries – Chile, Dominican Republic, Ethiopia, Maldives, the Netherlands and the Republic of Korea – today joined an international effort aimed at fast action on reducing black carbon, methane, some hydrofluorocarbons and other SLCPs.

This brings to almost 50 the number of partners in the Climate and Clean Air Coalition – a voluntary initiative aimed at maximizing the health, agricultural and climate benefits of swift action on SLCPs.

Fast action on black carbon and methane have the potential to slow a global temperature rise by up to 0.5 degrees Celsius by 2050, reduce air pollution-related deaths by as much as 2.4 million and crop losses by around 30 million tonnes annually, UNEP said in a news release.

Scientific assessments indicate that the near-term benefits in places like the Arctic and on glaciers in mountain regions could be even higher, it added.

The Coalition, which was launched initially by six founding countries and UNEP in February this year, is already acting on several fronts. Among other actions, it is supporting an initial group of 10 major cities, including Rio de Janeiro, Lagos, Stockholm, Accra and New York, to accelerate methane reductions from landfills and black carbon or ‘soot’ from burning wastes.

“The Internet offers a lot of potential and opportunities for sustainable development,” said the Director of the Division for Public Administration and Development Management of the UN Department of Economic and Social Affairs (DESA), Haiyan Qian.

Qian’s remarks, delivered on her behalf, were addressed to more than 1,600 delegates from 128 countries at the conclusion of a four-day conference of the Internet Governance Forum (IGF) in Baku, the capital of Azerbaijan.

The Forum included the participation of governments, intergovernmental organizations, business representatives, the technical community, civil society organizations, as well as any individual Internet users interested in Internet governance issues.

The theme for this year’s Forum was ‘Internet Governance for Sustainable Human, Economic and Social Development,’ reflecting the increasing role of the Internet in the evolution of the various aspects of development, across all countries.

“We need to build capacities to address challenges and implement strategies, not only in our own countries and organizations, but also to assist others, especially those in developing and the least developed countries, as well as countries with economies in transition,” Qian urged.

The question of promoting sustainable development – which aims to meet human needs through resource-use that also preserves the environment – was central to the landmark UN Conference on Sustainable Development (Rio+20), which took place in Brazil in June this year.

One of the main Rio+20 outcomes was the agreement by member States to launch a process to develop a set of Sustainable Development Goals, which will build upon the anti-poverty targets known as the Millennium Development Goals (MDGs) – set in 2000 for achievement by 2015 or earlier – and converge with the post-2015 development agenda.

In her remarks, Ms. Qian said IGF’s “inclusive, participatory and transparent governance process” plays a “critical role” in driving the growth of the Internet, which she said was “clearly” bringing new social and economic opportunities to so many people in the developing world.

“This session of the IGF has again provided the valued platform for continuous consensus building and learning opportunities for all,” she said. “I am sure each one of us will bring back to our respective countries and organizations new ideas and approaches on how we can best deal with these crucial issues.”

The forum emerged after 2005, when countries attending the second of two conferences of the UN-sponsored World Summit on the Information Society asked the UN Secretary-General to convene a new space for dialogue on Internet governance policy. Though not a decision-making body, it saw its initial five-year mandate renewed for a further five years by UN General Assembly.

IGF noted that activist groups drawn from civil society had demonstrated an “appetite to drive (the) global Internet agenda by attending the Baku conferences annual meeting in relative force.

“Civil society… was the highest represented stakeholder group at the forum,” IGF stated in a news release, citing others as Internet governance experts, government officials, international development representatives, academics, private sector representatives and other “inquiring global citizens.”

IGF said participation of women also increased significantly from previous years, and cited youth representation and activity as a “notable achievement” of this year’s meeting.

Several dozen experts and panellists participated in the gathering from remote hubs around the world – a development IGF said had become a “major strength” of the forum process. It also highlighted the rising use of social media platforms by delegates, noting that their use spiked “significantly” – enabling discussion to continue beyond the meeting rooms.

“There were thousands of ‘Tweets’ about the forum each day, which reached millions of others on the social information-sharing network,” IGF said.

The forum concluded on a day the UN Educational, Scientific and Cultural Organization (UNESCO) also highlighted the importance of communications for advancing development. The Paris-based agency did so in remarks delivered at UN Headquarters in New York to the UN General Assembly’s Second Committee, which deals with economic and financial matters.

“UNESCO approaches the issue of communication-in-the-service-of-development from the vantage point of fostering an environment in which freedom of expression, independence and pluralism of the media can exist,” UNESCO’s Senior Public Information and Liaison Officer in New York, Suzanne Bilello, told the committee, which is open to all 193 UN Member States.

“Of particular interest to us therefore is the need to ensure that the communication-for-development agenda gives sufficient emphasis to promoting free, independent and pluralistic media, whether on radio sets, mobile phones or printed pages, and including access to communication channels, such as community media, and not forgetting, also, the importance of media and information literacy,” she said.

Bilello added that, without progress in all those parameters, “societies cannot advance more specific practices, like health or agricultural communication, to optimum effect and participation by poor and marginalized people.”

Members of the event’s Preparatory Committee are due to finish negotiations on the outcome document on Friday. Yesterday, the Rio+20 Secretary-General, Sha Zukang, urged them to take advantage of the new format whereby members split into various groups to better focus on different areas and accelerate the deliberation process.

“We are hoping that the multiplicity of contact groups speeds up negotiations so that we have closure on this as soon as possible,” the Rio+20 Head of Office, Nikhil Seth, told reporters in Rio de Janeiro, Brazil, today.

More than 100 heads of State and government, along with thousands of parliamentarians, mayors, UN officials, chief executive officers and civil society leaders are expected to attend Rio+20’s high-level meeting, from 20 to 22 June, to shape new policies to promote prosperity, reduce poverty and advance social equity and environmental protection.

In an interview, Mr. Seth described the atmosphere during negotiations on the outcome document as “extremely positive,” even though there are concerns that they are happening too slowly, with just one day left to reach an agreement.

“The atmosphere is very friendly and consensus-inducing,” Mr. Seth said. “The major problem is that progress is somewhat slow, that they [delegates] are not rapidly coming to a conclusion on many of the paragraphs.”

Meanwhile, thousands of civil society members participated in Rio+20’s various side-events, voicing their concerns on issues such as marine protection, deforestation, food security and workers’ rights.

“We are here to try to engage young people with the conference and get them to tell legislators and world leaders to stick to the promises they have made, and get them to renew their commitments on marine protection,” Ruth Desforges from the Zoos Zoological Society of London said in an interview. “We are heading to more youth events this afternoon and we are particularly excited about the global youth music contest on Saturday.”

Over 500 side-events are set to take place over the coming days, with people from all over the world attending talks, panels and workshops on range of issues. Many are also taking the opportunity to form partnerships and share knowledge.

“The networking opportunities are enormous and you have a chance to learn from people that work in similar or totally diverse fields,” said Illene Pevec from Susila Dharma International, an NGO working on small grassroots projects in various developing countries.

“I went to a meeting on youth engagement on development issues which was run by the Girls Scouts Association and that was by far the best meeting, because the young people do not have any power so they feel free to be honest and say exactly what is going on,” she added. “It is far more interesting to be with people that do not have a political line to follow. I always learn a lot.”

The General-Secretary of the International Trade Union Confederation, Sharon Burrow, who participated in a press briefing on decent jobs and health for workers earlier Thursday, said the conference was a platform for workers to be heard by world leaders.

“We are here to demand that governments endorse the financial transactions tax,” she said. “It is time that governments stood up to the financial sector and said: you must make a contribution.”

“There has been too much ideology in defining policies and too little human sensitivity to the individuals, families, communities – too much financial, too little social,” the Director-General of the ILO, Juan Somavia, said in a speech to the plenary meeting of the 101st International Labour Conference. He added that it is possible to turn the inefficient growth patterns of today’s world economy around but this requires a redefinition of priorities and the political conviction to overcome the dogmas of the past.

Nearly 5,000 delegates have gathered for the conference, taking place in Geneva, which is focused on the global jobs crisis and its impact on youth, as well as social protection and rights at work.

In his remarks, Mr. Somavia said that the financial crash of 2008 was “not just an unfortunate accident on a safe road” but rather a “pile-up” caused by a globalization model whose values were shaped in the 80s, picked up speed in the 90s and have now “gone out of control.”

According to ILO, around 30 million people have been added to the unemployed since the 2008 financial crisis, and nearly 40 million more have stopped looking for employment.

The prospect of several more years of lingering crisis or feeble recovery is opening minds, said the ILO chief, noting that this prolonged period of uncertainty can also be a potential period of creativity if world leaders redefine priorities.

Growth, however indispensable, can no longer be the key criterion for the world economy, Mr. Somavia said. He added that creating quality jobs, especially for youth, reducing poverty and informal work, promoting growth of middle classes, as well as providing fair access to opportunities, should from now on also be criteria to measure macroeconomic success. The ILO 2009 Global Jobs Pact can be a useful tool in this process, he noted.

The Pact was adopted by the ILO in 2009 as a response to the 2007/8 global economic crisis, and offers a range of crisis response initiatives that countries can adapt to their specific needs and situation. These measures include retaining persons in employment, sustaining enterprises, and accelerating employment creation and jobs recovery, all combined with social protection, especially for the most vulnerable.

“Structural factors have changed the context within which the European social model operates: the growing competition from emerging countries, the reorganisation of production processes on a global basis, the speed of innovation, the increasing fragmentation of career paths with ever looser ties to a “permanent position”, the greater instability of families, declining fertility, the prospective decrease in the workforce, an ageing population. The set of risks faced by individuals throughout their life has changed significantly.

The social protection systems are therefore constantly evolving; substantial corrections have taken place in recent years in many countries, including France, the United Kingdom and Germany, the country where the reform process began a decade ago. In Italy, the recent pension reform which approves the full transition to a contribution system completes the necessary correction of the pension spending dynamics which was started years ago. As Germany shows very well, large and effective welfare systems can be made more efficient without compromising social goals.

We are living at a critical juncture in the history of the Union. The sovereign debt crisis has exposed serious weaknesses in the institutional framework; in this context, the difficulties in finding common solutions are having a negative impact on market valuations. The extraordinary measures taken by the ECB have gained us time; they have preserved the functioning of monetary policy.

But we have now reached a point where European integration, in order to survive, needs a bold leap of political imagination. It is in this sense that I have referred to the need for a “growth compact” alongside the well-known “fiscal compact”.

A growth compact rests on three pillars and the most important one, from a structural viewpoint, is political: the economic and financial crisis has challenged the myopic belief that monetary union could remain just that, and not evolve into something closer, more binding, into an arrangement whereby national sovereignty on economic policy is replaced by the Community ruling. If the governments of the Member States of the euro define jointly and irrevocably their vision of what the political and economic construct that supports the single currency will be and what the conditions to reach that goal together should be. This is the most effective answer to the question everyone is asking: “Where will the euro be in ten years’ time?”.

The second pillar is that of structural reforms, especially, but not only, in the product and labour markets. The completion of the single market and the strengthening of competition are crucial for growth and employment. Labour market reforms that combine flexibility and mobility with a sense of fairness and social inclusion are essential.

Growth and fairness are closely connected: without growth, and the events of recent months also reflect this, the temptation to “circle our wagons” gains strength, and solidarity weakens. Without fairness, the economy breaks up into multiple interest groups, no common good emerges as a result of social and economic interaction, and there are negative effects on the capacity to grow.

These reforms have long been indispensable in a global economy very different to the one which witnessed the creation of the institutions still operating today. In the political structure that will emerge from the crisis it is likely and desirable that for these reforms a system of European rules will be introduced similar to that for the fiscal compact, a discipline leading over time to the European harmonisation of objectives and tools.

The third pillar is the revival of public investment: the use of public resources to push forward investment in infrastructure and human capital, research and innovation at national and European levels. (The proposed strengthening of the EIB and the reprogramming of Union structural funds in favour of less-developed areas go in this direction).

Thus, a growth compact complements the fiscal compact, because there can be no sustainable growth without orderly public finances. In this regard I have noted on other occasions the extraordinary progress made by all governments of the euro area in terms of fiscal consolidation, but, once the emergency is overcome, they need to make improvements by cutting current spending and taxation.”

President Van Rompuy said that growth must not be opposed to deficit reduction, as “both are two sides of the same coin”.

Leaders discussed a growth strategy “still based on the EU 2020 strategy” which “is the basis for our growth initiatives”. The three main pillars aim at mobilising EU policies to fully support growth; stepping up efforts to finance the economy through investments; strengthening job creation.

The heads or state or government also held an in-depth discussion of the latest developments in the euro area. In addition to noting that considerable progress has been made on various aspects, the commitment to safeguarding both financial stability in the euro area and its integrity was reaffirmed, and a general consensus was reached that the economic union has to be strengthened in order to make it commensurate with the monetary union.

President Van Rompuy added that in June he will report on the main building blocks and on a working method to achieve the latter objective.

An exchange of views on the political and economic situation in Greece showed that leaders wanted Greece “to remain in the euro area while respecting its commitments”. They expect that, after the elections, the new Greek government will choose to continue the vital reforms, as this is the best guarantee for a more prosperous future in the euro area.

The EU must take action to reduce public spending and boost economic growth at the same time, say 47 % of respondents. As to preferences, 25% say priority must go to measures to stimulate the economy, while 23% say it must go to those that reduce public spending.

Over half (55%) would feel better protected by measures coordinated with other EU Member States, but 38% (up three percentage points compared to the previous Eurobarometer in September 2011) would prefer their countries to go it alone. Within the euro zone, 61% favoured coordination, compared to only 43% outside it.

Although they favour solidarity, most Europeans say financial help for Member States in economic or financial difficulty must be made conditional upon compliance with common rules (80%), such as jointly-defined rules on deficits. They also say that penalties should be imposed when these rules are broken (72%).

Most Europeans (66%) feel that pooling part of the public debt would benefit only those Member States that are in dire straits, but 64% (up 3 percentage points), feel that it should be done in the name of solidarity nevertheless.

Most (66% – up five points) now also favour a financial transaction tax. However, there is a 20 point difference between those within the euro zone (73% in favour) and those outside it (53%). The strongest support for such a tax is found in Greece, Cyprus, Italy, Portugal and Spain.

“The results show that the European Parliament has been acting in the same spirit as that of the majority of the population in the laws and resolutions it has adopted since the beginning of the economic crisis. This proves we are on the right track and should be involved in all such decisions taken at EU level” said EP Vice-President co-Othmar Karas (EPP, AT), who shares responsibility for communication.

Vice-president and rapporteur on the financial transaction tax Anni Podimata (S&D, EL), was delighted to see “that an EU levy on financial transactions to put a brake on excessive practices is gaining real traction among all Europeans.” The European Parliament will vote Wednesday to give its opinion on the introduction of such a tax.

The “Crisis and the economic governance in Europe” is the fifth such survey, done by TNS opinion between 10 and 25 March 2012. It included face-to-face interviews with 26,593 Europeans aged 15 and over.

The report, to be discussed by Ministers attending the OECD Ministerial Meeting in Paris this week, analyses the causes of continuing inequalities and recommends measures governments can take to create a more level playing field.

“Meeting the challenge of delivering strong and sustainable long-term growth that benefits everyone can only be achieved if everyone is on board,” said OECD Secretary-General Angel Gurría. “Giving men and women the opportunity to contribute at home and at work will boost growth and well-being and create a fairer society for all.”

Good progress has been made in education. Increased in educational attainment is responsible for half of the GDP growth across the OECD over the last 50 years. Every extra year of education of the population leads to an average increase of around 9% in GDP per capita, says the report.

More progress will be essential for countries to benefit from the economic contributions women can make and to not waste the years of investment in the education of girls and young women.

Bringing more girls to higher levels of education is also key for developing countries. Making schools safer and affordable for everyone would boost attendance in lagging regions, notably Eastern, Middle and Western Africa and Southern Asia.

In OECD countries, in 2009 nearly 60% of university graduate students were female. But men and women still choose different study and career paths. More than 75% of health and social science graduates are women, while some 70% engineering, manufacturing and construction graduates are men. New ways must be found to attract women to study and pursue careers in male-dominated sectors, which often offer better career and earnings prospects.

Employment rates are 13 percentage points lower for women than for men in OECD countries. Women are also much more likely to work part-time. Better and more affordable child care and more flexible work conditions are key to helping parents to be in paid work or increase hours and work full time, says the report.

Pay gaps also remain stubbornly high: on average in OECD countries women earn 16% less than men and female top-earners are paid on average 21% less. Across the OECD less than one-third of managers and only 10% of board members are women.

Governments can help drive change, through policies and setting an example by ensuring equality of opportunity in the public sector. Companies should review their corporate culture and working practices to give everyone the same chance to get ahead and make the best use of their talent.

Going forward, the OECD will develop specific recommendations and will rely on its well established methods of peer reviews to monitor and benchmark progress in the institutional, legal and economic frameworks to ensure gender equality in education, employment and entrepreneurship.