ITUC OnLine – March 23, 3007

Brussels, 23 March 2007 (ITUC OnLine):  The World Bank and the International Monetary Fund must do far more to support labour rights, according to a new statement issued by the international trade union movement in the lead-up to key meetings of the International Financial Institutions (IFIs) in Washington on 14 and 15 April.  The main function of the “Spring Meetings”, of the IMF’s International Monetary and Financial Committee and the joint World Bank – IMF Development Committee, is to assess progress in the work of the two institutions.  “Real and consistent improvements on labour rights must be a cornerstone of tackling poverty and growing inequality worldwide”, according to ITUC General Secretary Guy Ryder.

One positive aspect noted in the report is the progress that has been made concerning the achievement on the Millennium Development Goals through the implementation of debt cancellation for the poorest countries. The requirement by the World Bank’s private sector lending arm the IFC that borrowers observe the core labour standards of the International Labour Organisation, and the declared intention of the World Bank itself to include similar criteria in its infrastructure investments, show a commitment to achieving equitable and sustainable development. 

Nevertheless, the world union bodies criticise serious inconsistencies concerning decent work, in particular around labour rights. The World Bank continues to promote policies that encourage countries to abandon protection for workers and the poor and it applies its discredited “Doing Business” methodology to its “Country Policy and Institutional Assessment,” which is used to determine poor countries’ aid eligibility based on their scores on areas including business regulation and labour market flexibility. The IMF also persists with burdensome and inappropriate economic policy conditionality in areas such as privatization and public expenditure caps, undermining governments’ capacities to provide basic services such as health, education and social protection.

The statement concludes with a series of recommendations to encourage the IFIs to make a positive contribution towards a fair globalization. This includes a call on the World Bank to follow through on its commitment to work closely with trade unions during the implementation of its governance and anticorruption strategy. On the IMF side, the need for a regulatory framework to address global economic crises must be addressed, along with the burgeoning impact of speculative transactions.

“There has been some progress on important issues, but we are still a long way from seeing the sort of coherent policies which address poverty, hardship and inequality which are so clearly missing from the work of these two powerful institutions,” said Ryder.

Click here to read the full statement.