ICFTU statement to IMF/World Bank

International Confederation of Free Trade Unions, ICFTU OnLine..., 176/990927/DD, 27 September 1999

Concrete measures needed to regulate international financial markets, world union tells IMF/World Bank Meeting

Brussels Sept 27 1999 (ICFTU OnLine): "This years' IMF/World Bank Annual Meetings must agree on concrete measures to regulate the global market, in order to prevent further devaluations and stock market crashes" said ICFTU General Secretary Bill Jordan on the eve of the IMF/World Bank annual meetings in Washington at the end of September.

"During a time of increasing tension and shock at the devastating effects of financial crises on people's lives, the IMF/World Bank and the WTO must adapt to the new politics of international co-operation and competition and must demonstrate their crucial role in ensuring that globalisation meets the needs of all workers and citizens", says the ICFTU.

Independent International Commission

In its paper to the IMF/World Bank Meetings the ICFTU suggests a number of measures for working towards this goal. Governments must set up an Independent International Commission to draw up measures to establish an international regulatory framework and new financial order, says the ICFTU. This should start with the holding of public consultations by the Financial Stability Forum, co-ordinated by the Bank for International Settlements, to work on the following issues:

• Taxing foreign exchange transactions;
• Improved fiscal and monetary policy co-ordination between the Dollar, Yen and Euro;
• Recognising states' rights to control short-term capital movements;
• Drawing up binding international standards for regulating financial markets;
• Ensuring transparent banking systems and better information on currency flows;
• Suggesting improved standards for corporate governance and company accounting.

The World Bank Report - A Missed Opportunity?

In the light of the need to balance economic growth policies with creating socially equitable societies, the World Bank's report entitled "Managing the Social Dimensions of Crises" is a missed opportunity, says the ICFTU. It fails to consider the role which civil society can play in achieving recovery from economic crises. Another important omission is the report's failure to discuss the importance of human rights, including core labour standards in producing a popular mandate for economic recovery programmes.

In order to engender public support for its recovery measures the IMF/World Bank meetings should include a greater social dimension in their policies. This could include:

• Providing social safety nets;
• Maintaining and enhancing school participation, particularly for girls, and eliminating child labour;
• Creating jobs;
• Respecting core labour standards;
• Promoting the participation of trade unions and other NGOs and employers' organisations in developing and implementing economic and social policies.

The ICFTU also hopes that next year the June 2000 UN Session on the follow-up to the Social Summit "Copenhagen +5" will include recommendations for incorporating the Copenhagen Summit Commitments into the IMF/World Bank programmes and policies.

Democratising and Strengthening the IMF/World Bank

One of the important issues for the meeting's discussions should be how to make economic policy decisions more democratic, since this is one way to prevent further economic crises. The meeting should encourage IMF/World Bank member states to publish annual reports which include the effects of the observance of international standards on market regulation and social policy. These reports should draw on discussions between the government, national regulatory bodies and non-governmental organisations such as trade unions and employers organisations.

The ICFTU says that the IMF/World Bank will only be able to gain agreement for a funding increase if they are seen to be more democratic and transparent in their operations, and if they include greater social responsibility. Coupled with this governments should agree to allow broader participation at national and international level in formulating policies so that this will take into account the needs of those who bear the brunt of economic crises.

Importance of Debt Relief Initiatives

The ICFTU's final recommendations relate to the debt relief initiatives, and here it welcomes the IMF/World Bank Highly Indebted Poor Countries (HIPC) initiative taken at the G8 Summit in June, but says there needs to be a more radical approach aimed at much greater cancelling of the debt early in the new millennium, along the lines suggested by the Jubilee 2000 coalition.

Initiatives include:

• Reducing the existing six year period for receiving debt relief so that countries which respect core labour standards could be eligible immediately;
• Breaking the link with the IMF's Enhanced Structural Adjustment Facility (ESAF) lending as the basis for determining a country's record of implementing macro-economic policies;
• Easing suggested austerity measures for lending, together with introducing quick-disbursing grant schemes for urgent targeted social relief for the more severely indebted countries.

The ICFTU's proposals to the meeting are part of a general approach to ensure that globalisation takes accounts of workers' needs. It says that trade ministers attending the 3rd WTO Ministerial Conference in Seattle this November will need to prepare for a future round of trade negotiations by agreeing to a broad agenda including supporting internationally-accepted standards on workers' fundamental rights, on the environment and on improved market access for developing countries.