Global Unions demand policy change in finance institutions
With the prospect of several millions more job losses in a new worldwide economic downturn, the Global Unions urge the financial institutions and G20 group of countries to put a halt to their ‘destructive and ultimately self-defeating economic policies that will lead to a new surge of global unemployment’.
GLOBAL: In an extensive analysis of the global financial crisis of 2008 and the risk for a new downturn in 2011 the International Metalworkers' Federation and its sister Global Unions, as well as the International Trade Union Confederation (ITUC) and the Trade Union Advisory Committee to the OECD (TUAC), demand action and policy changes in the International Monetary Fund and World bank. These will gather for their annual ministerial-level meetings in Washington, USA, on September 23-25.
In the 12 page statement the unions state the case for employment-creating measures and their support for infrastructure programmes, health care and education, and climate-related investments rather than fiscal consolidation by cutbacks in social programmes that will hit the poor and vulnerable, and risk creating a ‘lost generation of children and young people with insufficient and inadequate education'.
Deficits should be reduced through tax measures that have the least impact on employment, and that help reduce income inequality, such as the replacement of flat taxes by progressive income taxes. The Monetary Fund is urged to support debt restructuring, including reductions of home mortgages and rescheduled sovereign debt repayments in unsustainably indebted countries. A financial transactions tax, as already implemented in Brazil and proposed by Germany and France, should help finance job-intensive recovery programmes and achieve development and climate-finance goals.
In order to avoid new financial crises, the unions urge the Financial Stability Board created after the crisis of 2008, the international financial institutions and their member countries to regulate the financial system by breaking up financial institutions that have become too big to fail, to implement controls over the non-bank shadow financial economy, hedge funds and private equity firms, and to eliminate tax and regulatory havens.
The unions point to serious shortcomings specifically in the World Bank and IFC Doing Business unit: "The popular uprisings in countries of the Middle East and North Africa showed the short-sightedness of analytical frameworks that ignore key phenomena such as persistent high joblessness, particularly among youth; exorbitant income inequality; concentration of wealth from the exploitation of natural resources, industry, trade and finance in a few hands, often as a result of privatization of state assets; lack of freedom of association and expression and political repression.
Some of the countries whose regimes were overthrown were designated top global performers by the World Bank's Doing Business or declared by the International Monetary Fund to have exemplary macroeconomic performance. For example, in February 2011 the Fund's executive board stated that it ‘welcomed Libya's strong macroeconomic performance and the progress on enhancing the role of the private sector and supporting growth in the non-oil economy [and] ... commended the authorities for their ambitious reform agenda'".
A counterexample, highlighted by the global unions, is Brazil, ‘previously one of the most unequal countries in the world, where improved access to education, increased state benefits to the poor and higher minimum wages all contributed to reducing income inequality over the past decade.'
Read the full text of the Statement by Global Unions to the 2011 Annual Meetings of the IMF and World Bank Washington.Sep 05, 2011 – Rainer Santi