Quality Jobs And Collective Bargaining Must Be At The Centre Of The IMF And World Bank

The spring meetings of the International Monetary Fund (IMF) and World Bank have taken place under the dark clouds of war and the pandemic.

With the world of work and multilateral cooperation in a deeply damaged state, trade unions call for a comprehensive approach to reconstruction by the international financial institutions (IFIs), with policies that promote collective bargaining, strong unions and quality jobs that contribute to a healthy, caring and sustainable global economy.

The IMF downgraded its forecast for global economic growth and predicted that global employment will remain below pre-pandemic levels until 2024.

The pandemic pushed millions into poverty and led to widespread job losses and hunger, with more to come as the Russian invasion of Ukraine reverberates through world food and energy markets.

Undermined by years of failed policies, multilateralism proved weak in the face of COVID-19 and allowed the deepening of inequality between and within countries, leaving millions of working people behind. Now, Russian aggression has further damaged the weak, multilateral economic order that is incapable of solidarity and coordination on the scale needed, with consensus being blocked at key meetings this week.

“There have been bright spots at the IFIs, including support for Ukraine and its neighbours, the fight against hunger and COVID-19, and the landmark allocation of IMF Special Drawing Rights.

“The new IMF Resilience and Sustainability Trust will re-channel these Special Drawing Rights to emerging and developing countries, helping them prevent future crises linked to climate and health. To succeed, all operations of the IFIs should fully take on board Sustainable Development Goal 8, including full employment, social dialogue and labour rights, all of which promote peace and prosperity from the ground up,” said ITUC General Secretary Sharan Burrow.

Reducing inequality

In a statement to the spring meetings, Global Unions denounced an attempt to revive the infamous labour indicator of the Doing Business index through the rebranded Business Enabling Environment report. The international labour movement called on the IFIs to build upon research showing that trade unions, collective bargaining and balanced labour regulations reduce inequality.

Previous IFI meetings have warned of the dangers of a divergent recovery, with emerging and developing countries facing a fiscal stimulus gap. Now, inflation pressures rooted in supply chain disruptions from COVID-19 and the war in Ukraine could lead central banks to raise interest rates too quickly and governments to remove fiscal support despite renewed shocks to households.

Austerity and overly restrictive monetary policy would quash the possibility of economic and employment recovery and place highly indebted developing countries in an impossible position. Debt servicing costs would rise, taking even more away from social protection, fiscal stimulus, crisis response and public investment to protect and create jobs.

Without a binding international mechanism to renegotiate sovereign debt and international support, such as a global social protection fund, developing countries will be left with few options.

Solutions for reconstruction

In 1944, the first part of the World Bank was formed amid war. The International Bank for Reconstruction and Development was tasked with “encouraging international investment for the development of the productive resources of members, thereby assisting in raising productivity, the standard of living and conditions of labor in their territories”.

“Today, solutions are at the ready for reconstruction and development with higher living standards and better lives for working people. The IFIs should take bold steps to promote and respect collective bargaining, public investment, higher wages and sustainable industrial policy.

“Social dialogue should guide the design of loan programmes and strategies, especially regarding just transition and jobs. This will pay dividends for peace, sustainable economic growth and stability while reversing the dire trends of inequality, poverty and working people’s falling share of income.

“Actions, such as pushing labour market deregulation as proposed in the World Bank’s Business Enabling Environment report, will go in the wrong direction. Now is the time to reform and rebuild multilateralism and build a new social contract together,” Sharan Burrow concluded.

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