Socioeconomic Development Box 6.4: Chapter 6 Flexicurity: Operating procedure What is flexicurity? Chapter 6 Poverty 906. Mauritius has no extreme poverty line. It has a relative poverty line equal to half of the median income. It also has a Relative Development Index (RDI) for identifying the priority areas of poverty reduction programmes. 907. The CSAR emphasises that there are virtually no Mauritians living below the World Bank absolute poverty line of USD1 per person Participatory Poverty Assessment (PPA) per day. This line applies to the least developed countries. For a country like Mauritius, the most appropriate line would be between USD2 and USD4 PPA per person per day. The CSO gave the CRM the relevant statistics: Flexicurity is an integrated strategy aimed at simultaneously improving flexibility and security in the job market. Flexibility, on the one hand, refers to the succeeding changes (‘transitions’) in life: (i) between education and the world of work; (ii) between jobs; (iii) between unemployment and inactivity; and (iv) between work and retirement. It does not mean that one should allow more freedom to enterprises to recruit or dismiss staff or that fixed-term contracts belong to the past. It means facilitating the progress of workers towards better jobs, promoting ‘upward mobility’ and developing talents fully. Flexibility also means organising labour. This will help to meet new production needs, to master new and necessary skills, and to facilitate the reconciliation of professional and private responsibilities quickly and efficiently. Security, on the other hand, means more than keeping one’s job. It means giving people the necessary skills to enable them to progress in their professional lives and helping them to find new jobs. It also means giving them appropriate unemployment benefits to facilitate change. Finally, it includes training opportunities for all workers (particularly unskilled and older workers). Table 6.2: Poverty rate based on different poverty lines 51 1996/1997 2001/2002 2006/2007 Number of households below the poverty line 2,832 2,434 2,237 Proportion of households below the poverty line 1.03 0.79 0.67 The components of flexicurity Proportion of persons below the poverty line 1.43 1.13 1.09 The CRM and member states, relying on their experience and several analyses, have arrived at a consensus according to which flexicurity policies may be developed and implemented through four policy components: USD4 a day per person Number of households below the poverty line 36,307 33,534 31,933 Proportion of households below the poverty line 13.23 10.93 9.55 Proportion of persons below the poverty line 16.96 14.13 12.78 This approach, therefore, enables enterprises and workers to take full advantage of both flexibility and security. It means better organised labour, the upward mobility that results from developing skills and investing in profitable training for enterprises, and workers who can adapt to and accept change. • • • • Flexibility and protection of contractual provisions (from the perspective of both employers and workers) within the framework of the right to work, collective agreements and organisation of modern labour. Global and lifelong learning strategies to ensure that workers, particularly the most vulnerable, are able to adapt to change and take up permanent employment. Efficient, active labour market policies that allow individuals to face rapid changes, reduce periods of unemployment and facilitate the transition to new jobs. Modern social security systems, which provide aid and adequate incomes, encourage employment and facilitate mobility on the labour market. This presupposes a wide range of social protection benefits (unemployment benefits, pensions and health care) that allow people to reconcile their work with their private lives and family responsibilities like raising children. Source: Commission of European Communities. 20 June 2007. Towards Common Flexicurity Principles: More and Better Quality Jobs by Combining Flexibility and Security. Brussels. 312 Socioeconomic Development USD2 a day per person Source: Central Statistics Office (CSO) 908. The general trend, irrespective of the poverty line used, is the relatively slow reduction in the proportion and number of poor people, especially in the past five years. 909. An analysis of the situation using the RDI is only possible for 1990 to 2000. It shows a significant improvement, because the proportion of people living in areas with an RDI of more than 0.700 increased from 20.6 per cent in 1990 to 73.6 per cent in 2000. One should wait for the results of the next general population census to determine the trends that emerge during the 2000 decade. 51 - USD1 is USD1.08 in terms of 1993 PPP estimates. This was equivalent to about Rs9.4 in 1996/1997, Rs12.50 in 2001/2002 and Rs16.70 in 2006/2007. USD4 was equivalent to about Rs37.4 in 1996/1997, Rs49.9 in 2001/2002 and Rs44.8 in 2006/2007. It should be noted that the PPP different from the exchange rate. The PPP is the amount of money in a country’s currency needed to buy goods and services equivalent to what can be bought with USD1 in the United States of America (USA). 313