International financial institutions

The International Monetary Fund (IMF) and World Bank, which began operations shortly after the Second World War, were established with the missions of providing for global financial stability and for post-war reconstruction. The International Monetary Fund initially only lent to governments in crisis so as to ensure the stability of the global financial system but later became involved in longer-term lending, especially to low-income countries. The World Bank Group’s stated focus is on economic development and poverty reduction. It provides loans and grants to governments and loans and guarantees to the private sector in developing and emerging-market economies.

Several multilateral investment banks with specific regional focuses have also been created to support economic development. These include the Inter-American Development Bank, the African Development Bank, the Asian Development Bank, and European Bank for Reconstruction and Development.

Trade unions became particularly concerned by the programmes of the international financial institutions (IFIs) in the 1980s when they began applying structural adjustment and austerity policies as conditions for their loans. These conditions have often had a major impact on levels of employment, real wages and social programmes and remain a serious concern for the trade union movement.

Consistent with the ITUC’s work on the social dimensions of globalisation, it advocates at the IFIs for policies that give priority to sustainable decent work creation instead of the privatisation, deregulation and austerity policies that have characterised many of their interventions. The ITUC has called for the incorporation of respect for fundamental workers’ rights and decent work into the institutions’ policy advice and lending operations. This includes advocacy in support of expanded social protection, and respect for international human rights and labour standards. The ITUC also works to promote appropriate rules and practices governing the behaviour of private businesses that receive financial support from the IFIs.

The ITUC/Global Unions Washington Office, which is a joint office of the ITUC and the Global Union Federations, represents the concerns of the global labour movement at the International Monetary Fund, World Bank and regional multilateral development banks.

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Peter Bakvis
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