Defend MDGS against the economic crisis, EI tells World Bank
EI’s General Secretary Fred van Leeuwen got immediate agreement when he called on World Bank President Robert Zoellick to defend the Millennium Development Goals, and especially Education for All, against the ravages of the current financial and economic crises.
“I can’t think of anything more important,” said Zoellick, who described how he was trying to persuade governments to include funds for vital services in developing countries, including education and health, in their fiscal stimulus packages.
“We’ve got solid evidence that this kind of spending will help global recovery and the more advanced economies as well,” he said, referring to recent discussions he had held with German Chancellor Angela Merkel and British Prime Minister Gordon Brown.
Turning to AFL-CIO President John Sweeney, he said the US labour movement could suggest that President-elect Barack Obama include support for overseas development in his recovery plans for the US economy, because the US would also benefit at the end of the day.
This exchange was one of the highlights of two days of intensive discussions between Global Unions and the top leadership of the World Bank and the International Monetary Fund (IMF) last week in Washington DC. The agenda was dominated by the financial crisis, which all participants concurred had caused the worst crisis in the real economy since the Great Depression. IMF Managing Director Dominique Strauss-Kahn told the union representatives that the unemployment forecasts for 2009 were worse than stated previously and warned of bad news in the figures to be announced at the end of January. So far world-wide unemployment had been projected to increase by 25 million this year but the January figures will be much higher. He and Zoellick also emphasized that the crisis had become truly global. No country could escape it.
Other items addressed included the food crisis, climate change, gender issues and respect for core labour rights. EI's Van Leeuwen warned that to these crises it was necessary to add a crisis in education, with a massive shortage of teachers looming in developing countries and in most of the North. Suggestions by World Bank staff that countries could meet their MDG targets by putting unqualified people in front of students were misguided, he said, and would deny quality education. He called on the Bank to work with EI and UNESCO to build up teacher education programmes and help governments recruit the needed qualified teachers.
Earlier, World Bank Chief Economist Justin Lin told Global Unions that the Bank and donor countries had to avoid the mistakes of the 1970s and 1980s, when education and health systems in many developing countries had been allowed to degrade, and it had proven extremely difficult to rebuild them later. IMF officials said there was “a new IMF” under the leadership of Strauss-Kahn. “We got it wrong,” said one top official, after explaining the causes for the crisis. Fiscal stimulus through spending, particularly on public services and social protection for the most vulnerable, provided the best hope for recovery.
But Strauss-Kahn warned that the government plans announced to date did not go far enough. “At least 2 percent of world-wide GDP is needed,” he declared. “And it has to be coordinated among countries,” he added, citing IMF analysis showing that recovery packages coordinated by governments would be twice as effective as ‘go-it-alone’ schemes.
A new international ‘architecture’ to deal with global financial issues remains unclear. All agreed that “we have to stop this ever happening again,” but few concrete proposals were advanced. There is a general view in favour of continuing the G20 process aimed at putting effective regulation of financial markets in place and setting up early warning systems. But negotiations are currently going on behind closed doors, through four G20 working parties. “There won’t be much confidence in the outcome if people who got it wrong just go on meeting in secret,” said John Evans, General Secretary of the Trade Union Advisory Committee at the OECD. “Organizations representing working people have to have a seat at the table,” he added.
“Working people are not responsible for the crisis, but they are paying the price for the failures of a system and of your institutions,” said Guy Ryder, ITUC General Secretary. “Our members will have to pay, one way or another, for massive bailout plans of financial institutions. They want to know if stimulus plans are going to get them back to work, save their homes, and let their children continue their education,” he added.
A session with Executive Directors of both the Bank and the Fund, representing the governments, showed how far away we are, realistically, from real change in policies. Bank and Fund officials from the top down readily acknowledged the gravity of the crisis, the need for new regulation, the need for stimulus, and the need to involve labour unions more actively at all levels of their operations.
But the government representatives, mostly from national finance ministries, were not on that wave length, mostly locked into the tired neo-liberal precepts of minimal regulation and small government, and the complacency of believing that the current crisis was just part of a cycle, a worse downtown than most, but soon to be succeeded by business as usual.
Pointing out that the IMF’s own staff had circulated a paper reminding us that the Great Depression had lasted 9 years, EI’s Bob Harris said it had become apparent that nobody was really sure how to get out of the current crisis. Technical studies were not enough. It would take, fundamentally, a change from the logic of ‘value-added’ to values of equity and justice, equality of opportunity through education, democracy and decent work, he said. The previous warnings of the unions had been ignored, he noted.
The sessions in Washington showed that the unions had a greater responsibility than ever to press governments to change their approach at the global institutions.