Global Unions challenge International Financial Institutions
The International Monetary Fund (IMF) and the World Bank (WB) hold their 2012 Spring Meetings in Washington, from 20-22 April. Global Unions, which includes EI, will be represented to bring the voice of workers to this key event.
Global Unions have issued a statement firmly arguing for two priorities: job-focused growth and reduction of inequality. Towards these crucial objectives, the statement provides a full analysis of the current context as well as concrete recommendations for economic recovery.
In the statement, Global Unions support emergency lending at low rates for countries to avoid the exorbitant lending charges of private financial institutions. This lending resource could be provided either through specific regional arrangements, such as for the euro zone, or a global one managed by the IMF.
Europe deserves special mention due to its renewed economic slowdown. “The euro zone will probably require far more resources than the amounts allocated so far,” reads the statement. Nevertheless, it points out, “No firm decision has been taken to further increase the fund’s financial resources during the latest crisis”.
Protection of core labour standards
Moreover, this financial assistance must support growth strategies with “priority given to policies that have the maximum employment impact”, instead of “imposing economic contraction through austerity policies”.
Indeed, much of the focus of the IMF programmes has been on reforms aimed at making labour markets more ‘flexible’. This is moving in the wrong direction. The International Labour Organisation estimates the global number of workers in vulnerable employment has increased to 23 million since 2009.
The Global Unions insist deregulatory measures to increase flexibility and reduce labour costs result in higher short-term unemployment. An important OECD study found that legislative reforms to increase market flexibility had no significant impact on employment rates, but did result in higher wage inequality.
Social Protection development
The World Bank social protection and labour strategy 2012-2020 has been welcomed but, the Global Unions’ statement points out that it requires further development. For instance, the WB should ensure its “reoriented approach to pension reform and unemployment benefits will be put into operation.”
The Global Unions therefore invite the WB to put forward a “global target year” for the universal implementation of a social protection floor, that is, a basic set of social rights. The WB also needs to do more to assist countries “in achieving adequate funding for social protection programmes, including through tax policy”.
Financial sector regulation
One of the key demands of the Global Unions to the International Financial Institutions is that they address the root causes of the crisis through serious financial sector reform. Consequently, they urge these institutions to take coordinated action to regulate adequately the global financial system.
This implies a vast range of concrete actions including implementing a Financial Transaction Tax, separating risky investment from normal banking operations, controlling the shadow financial economy, tackling tax avoidance by multi-nationals, and strictly regulating credit rating agencies.
Transparency of Governance
Finally, the statement challenges both IMF and WB to recognise the deep governance and socio-economic problems in the Middle East and North Africa during the past decade.
The Global Unions ask for more transparency regarding loan negotiations and programmes of the International Financial Institutions in these regions. As new governance structures emerge in countries of the region, “programmes should follow, not lead, the national dialogues to establish development strategies”.
Transparency and accountability of their management structures, as well as increased representation of developing countries in the governing bodies of both institutions, are also needed for reduction of inequality worldwide.
To read the whole Global Unions Statement to the 2012 Spring Meetings of the IMF and World Bank, please click here