Education International
Education International

Trade unionists demand robust social protection to weather crisis

published 28 January 2011 updated 28 January 2011

An international trade union delegation has met with World Bank and International Monetary Fund directors to urge leaders to combat the economic crisis to foster inclusive growth by committing to social protection strategies.

Over 80 trade unionists from 31 countries took part in high-level meetings between the international trade union movement, the International Monetary Fund and the World Bank from 18-20 January 2011. The trade union delegation, led by ITUC General Secretary Sharan Burrow and including General Secretaries from four Global Union Federations, pushed for a number of important outcomes as well as specific commitments from the international financial institutions to improve consultations with trade unions and to focus on combating the unemployment crisis that is affecting workers around the world.

World Bank President Robert Zoellick agreed with trade unions that economic growth alone is not enough; recovery from the recent financial crisis and the ability to weather future crises will require active labour market policies and robust social protection strategies. Trade unions pointed to Tunisia as a case where economic inequality and continuously high unemployment levels had resulted in deep social unrest, advising the Bank to take a stronger role in leading a jobs-based agenda and encouraging more inclusive growth. Zoellick agreed that the World Bank would seek trade unions’ advice on developing policies to achieve these common goals, and invited trade union input in the new Social Protection Strategy that is under development (www.worldbank.org/spstrategy).

ITUC General Secretary Sharan Burrow emphasised that labour rights are human rights, and also economic tools that the Bank must take up. Trade unions have had success in pushing the Bank to adopt core labour standards in its private sector projects (since 2006) and more recently in its public sector construction projects (since 2010), and are now advocating for a broad policy to ensure the protection of these standards in all World Bank lending. While Zoellick did not directly address this request, he affirmed the Bank’s commitment to supporting all core labour standards in public sector as well as private sector projects.

The meetings also fortified the momentum of the changes to the World Bank report "Doing Business". In 2009, in response to heavy criticism from trade unions, the World Bank suspended the use of the report’s Employing Workers Indicator (which gave higher rankings to countries with lower workers protections). The World Bank committed to follow up on two other trade union concerns – the development of a Workers’ Protection Indicator and the revision of the Paying Taxes Indicator – through the existing Consultative Working Group which includes trade unionists and ILO representatives.

Pointing to the swelling food prices, trade unions from developed and developing countries demanded that the World Bank take constructive action to assuage the food price crisis that is affecting workers all over the world, put particularly affecting those in low-income countries who must spend a majority of their income on food. Zoellick admitted that the Bank’s work in this area had lapsed since its emergency programme in 2008, and outlined the Bank’s plans to reactivate this programme in order to expand much needed assistance for agricultural production, nutrition, and social safety nets.

In sessions with the IMF, trade unions repeatedly emphasized the need for policy focus on employment-centred recovery. IMF Managing Director Dominique Strauss-Kahn agreed that "2011 must be the year of jobs" and supported trade unions' proposal to make employment a priority consideration of IMF staff. Towards this goal, the IMF accepted the trade union suggestion that it deepen its work with the ILO as part of the G20-mandated Mutual Assessment Process. The IMF agreed that the follow-up measures to this engagement, started in a joint ILO-IMF conference on the crisis and employment held in Oslo in September 2009, should include IMF support for ILO social protection initiatives (namely, the global social protection floor) and improvements in country-level engagement between the international organisations. The IMF also made a specific commitment to address trade union concerns in Romania and some other countries.

The union delegation took the opportunity to again raise with the IMF the trade union support for a financial transaction tax (FTT) as a means to generate revenue for addressing public resource gaps, meeting overseas development assistance commitments, and financing climate change. While the IMF prefers its model of a financial activities tax (FAT), which generates substantially less revenue, Strauss-Kahn underlined an important area where the IMF agrees with trade unions: governments should take action to develop a tax framework for the financial sector as soon as possible. Trade unions and the IMF also agreed on the very real danger of another crisis if weaknesses and gaps in financial regulation are not sufficiently addressed.

Unions also challenged the IMF on its troubling shift from recommending stimulus measures – as it did it many countries at the height of the crisis – to supporting austerity measures, even in countries that are still in recession. The IMF gave little ground in this area, but claimed that IMF programmes would not recommend cutting spending on health and education and agreed with trade unions that countries should not rush to cut deficits.

These high-level meetings, the fifth such forum since the establishment of a trade union-IFI protocol in 2002, marked important areas for continuing dialogue between organisations. Chief among these is the need for improved consultation mechanisms, particularly at the country-level, to ensure that trade union advice is listened to at an early stage of World Bank and IMF programme design. The World Bank also committed to improve its work with trade unions in different economic sectors through engagement with the Global Union Federations. To facilitate improved communication with trade unions, both the IMF and the World Bank agreed to take part in a working group to update the trade union-IFI protocol in the coming year. With this protocol, the ITUC/Global Unions hope to further strengthen and clarify the IFIs commitments to address the labour movement’s concerns more effectively.