Kathmandu, April 13:

Responding to concerns about a possible implosion of the financial sector and a major global economic slowdown, the International Trade Union Confederation (IUTC) and its Global Union partners has called on the World Bank and International Monetary Fund (IMF) to significantly increased assistance to countries that seek to protect their workers and citizens, particularly the most vulnerable, against the shock of an economic crisis.

“If there is no firm and coordinated policy response, the dramatic rise in financial and economic uncertainty since mid-2007 will lead to increased unemployment, declining living standards and higher poverty, particularly affecting women, in many countries,” ITUC general secretary Guy Ryder, said, adding that the IMF and the World Bank must support measures that increase the buying power of low-income workers.

In a Global Unions statement released ahead the 2008 spring meetings of the World Bank and IMF, the international trade union movement has urged both the leading international financial institutions (IFIs) to shift their focus from promoting deregulation, including labour market deregulation using the Bank’s Doing Business report, in favour of policies promoting the creation of decent work.

The Global Unions set out a policy agenda for the IFIs that could support, rather than dictate to, developing countries.

The Global Unions called on the IFIs to assist countries that seek to control destabilising capital flows that require emergency financial assistance to overcome balance of payments problems, that strive to improve social protection and that extend workplace protection and labour rights to unprotected workers.

The Global Unions are encouraging the IMF, in particular, to adopt measures to help cushion states against the global slowdown, such as assistance to offset the impact of higher food and fuel prices, an emergency credit facility for countries in financial difficulty and measures to protect against destabilising speculative capital movements.

“Just a year ago, the IMF would have been content to let market forces resolve a crisis like this,” said Ryder, “but at the recent G7 meeting, even the managing director of the Fund recognised the importance of a coordinated fiscal stimulus response to the current global economic slowdown.”

It further seeks a role for the IMF not only in responding to the current crisis, but in preventing new ones. In the statement, the Global Unions called on the IMF to take a lead role in developing new international regulatory frameworks to control the largely unregulated activities and new financial instruments that helped set off the crisis.

On some long-term issues, it acknowledges progress from the World Bank on requiring some

of its projects to be implemented in conformity with the core labour standards. However, it questions the Bank’s commitment to enforcing those standards, particularly at an important time when the World Bank is seeking to devolve more responsibility for procurement standards in the bank-financed projects to borrowing countries.

The statement also reiterates a long-standing but unanswered demand of global unions and other civil society organisations — that IFIs finally cease to use economic policy conditionality to demand harmful reforms from developing countries.