Brussels, 13 April 2007 (ITUC OnLine): Against a background of intense media attention surrounding World Bank President Paul Wolfowitz, the ITUC has today reiterated its call for proper transparency and democracy at the Bank and the International Monetary Fund. Both institutions are facing a crisis of legitimacy, and must respond by increasing their accountability to member and client countries and the public at large, as well as refocusing their policies and activities to address major fault lines in the global economy.
“The IMF itself has acknowledged that working women and men are getting a diminishing slice of the world economic cake – unless the course of globalisation is changed dramatically, then inequality, insecurity and unsustainable business practices will worsen. Both the major international financial institutions need to face this reality squarely and change direction”, said ITUC General Secretary Guy Ryder.
The international trade union movement believes that the value of the World Bank in the world economy should be to act as a leader in ensuring high labour, social and environmental standards, which are determined and implemented through transparent processes and through close consultations with governments, trade unions, other civil society organisations and the public. On the issue of labour standards, the Bank should follow the lead of its private sector arm the International Finance Corporation, by implementing its stated commitment to incorporate core labour standards into its lending criteria.
The IMF for its part must in particular rise to the challenge of tackling speculative investment. Its own Global Financial Stability Report, published on Tuesday, supports the trade union view that highly-leveraged buyouts involving private equity and hedge funds can have serious economic consequences. The international trade union movement, and an increasing number of governments, are deeply concerned by the activities of many such funds with their “buy it, strip it, flip it” approach, with dramatic impacts on the workforces of targeted companies, as well as on overall stability in national and international markets. Rapid action is needed by the IMF to develop an internationally-agreed regulatory framework, which all national governments need to play their part in implementing.
“Both the Bank and the Fund have declared their commitment to tackling world poverty. They need to live up to this commitment, and governments need to make sure that this happens”, said Ryder.
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