Over the past six months, people around the world have watched in growing alarm as it became evident we now are facing the worst crisis in the real economy since the Great Depression of the 1930s. Unfortunately, working people, who had no hand in creating the crisis, are bearing the brunt of it in terms of massive unemployment, deep cuts in public services, decreased social stability and dashed hopes.
The international labour movement, however, has developed a bold agenda and a clear plan of where we should go and what changes are needed to confront this global crisis. There’s no doubt the news looks grim. The International Labour Organisation recently revised upwards its estimate of job losses predicted for 2009. This year global unemployment could increase over 2007 by a range of 18 million to 30 million workers, and more than 50 million if the situation continues to deteriorate. In the latter scenario, some 200 million workers, mostly in developing economies, could be pushed into extreme poverty. At the same time, the very same Wall Street bankers and financiers who lobbied for billions in public bailouts to rescue the financial system still continued paying themselves billions in corporate bonuses, a fact that US President Barack Obama described as “shameful.” “Indeed it is shameful,” said EI General Secretary Fred van Leeuwen. He pointed out that the $18 billion US that went into the pockets of those who created the crisis could have paid for two years of schooling for the 75 million children around the world who have no access to education. But, as always in times of crisis, there are opportunities for transformation. Education International and other global unions are seizing the moment to speak out about the need for fundamental reform of the economic system, reform based on social justice, human rights, decent work and international cooperation—not competition and greed. “This is the end of market fundamentalism,” Barbara Wettstein, of UNI Finance, writes in the journal International Union Rights. “But reform must be comprehensive and it must be global...The new economic model must put workers and sustainable development before the interests of financiers and speculators.” Now that economic policy makers are forced to acknowledge the need for new regulatory structures and financial architecture, unions are demanding to be part of the solution, insisting on their rightful place at the table and their voice in the global dialogue. To that end, EI is developing an Action Plan for Education and the Economy, a plan to protect education from the economic crisis and to mobilize political support for investment in education as a critical element in economic recovery. EI and its affiliates are pressing their governments to ensure that education is central to any stimulus packages they implement. In particular, affiliates in the G20 countries are driving that message home in advance of that group’s meeting in London in April. Van Leeuwen emphasized that the action plan must maintain EI’s basic principles: that education is a public good not a commodity; that education is about much more than economics; that education is central in our societies in many ways, having both social and economic importance; and, especially, that quality education requires quality teachers. He noted that in nearly 16 years of EI’s existence the struggle of education unions to put these principles into practice has been arduous. “Now it is going to get tougher, much tougher,” van Leeuwen warned. “The challenges that will confront education systems around the world as the financial meltdown impacts upon the global economy will be unlike any we have experienced previously in our lifetimes. The crisis began in the North, but already affects the whole world. The South, just emerging from mistakes like structural adjustment will be hit badly as global recession takes hold. The Millennium Development Goals for 2015 are seriously at risk. The financial and economic crisis threatens everything we have worked for.” In some European countries the impact on public education is already being felt in terms of reduced public spending and increased privatisation. Italy and Ireland, for example, have drastically reduced education funding, sparking enormous protests by unions, teachers, parents and students. EI insists that instead of cutting spending on education, governments ought to be investing in it to stimulate growth, foster social stability and build for the knowledge economy. Fiscal stimulus through spending on public services and social protection for the most vulnerable provides the best hope for recovery. At a recent meeting with representatives of the International Financial Institutions, EI’s General Secretary called on World Bank President Robert Zoellick to defend the Millennium Development Goals, and especially Education for All, against the ravages of the current crisis. “I can’t think of anything more important,” said Zoellick, who described how he was trying to persuade governments to include funds for vital services in developing countries, including education and health, in their fiscal stimulus packages. “We’ve got solid evidence that this kind of spending will help global recovery and the more advanced economies as well,” Zoellick said. Indeed, the International Monetary Fund recently reported to the G20 countries that it had calculated multipliers for three policy options: tax cuts, infrastructure investment and “other” government spending. Public education would be included in the latter. The IMF paper says that public spending in the “other” category has a considerably larger multiplier than tax cuts (1.0 vs 0.6), although infrastructure investment has an even higher multiplier (1.8 vs 0.6). Clearly, tax cuts are the least effective policy option. As the industrialised economies scramble to find solutions, people in the developing world are worried that they will suffer negative impacts on their economies and a reduction in development assistance. Most of the G8 governments failed to live up to their commitments in good times, so there are fears they will fail even more miserably now that they are faced with this crisis. However, a study by the OECD Development Centre reveals that support for development aid remains strong despite the crisis, and now is not the time to take away from people who already have so little. In Policy Insights No 87, entitled Fallout from the Financial Crisis (5), Robert Zimmerman reports that: “The evidence demonstrates that public support for development aid is high, and it has remained high for the past two decades. Politicians looking for an ‘easy’ cut in their budgets may want to think twice. First, the high support for development aid is reflected in a well organised global civil society that will resist breaches of donor commitments for more and better aid. Indeed, in leaner times, attitudes seem to be more charitable, and redistribution more popular. Second, in times of a global financial crisis, poor people in developing countries need development assistance more than ever. Taxpayers seem to realise this. Their policy makers must realise it, too.”