IMF/World Bank Spring Meetings must provide global leadership and coordination

The ITUC has called on the international financial institutions at their Spring Meetings next week to put in place an urgent and comprehensive plan in response to the economic destruction caused by the COVID pandemic, with jobs and social protection at the centre.

“COVID-19 will have catastrophic impacts in the poorest countries, and social protection is urgently needed to keep countries afloat and avoid widespread famine. Billions of dollars are needed, and while the amount may be large, it is only a small fraction of the trillions of financial stimulus pledged by the G20. The pandemic affects all humanity, and only by the whole world working together can we come through it,” said Sharan Burrow, ITUC General Secretary.

The social protection call is included in the ITUC/Global Unions Statement to the Spring Meetings, which sets out the needs for coordinated action by governments and global institutions for economic stimulus, public health action and debt relief.

Central to the plan is a call on the IMF to issue extra ‘Special Drawing Rights’, a foreign exchange mechanism that can deliver desperately needed help to the poorest countries and maintain financial stability, as it did in 2009. This new allocation should be accompanied by a Trust Fund through which advanced economy countries can reallocate their holdings of SDRs to other countries. For emerging and developing countries, SDR allocation would provide the kind of economic support that advanced economies execute through Quantitative Easing. Debt relief is also required, tied to the UN Sustainable Development Goals, not to failed neoliberal structural reform. While the G20 committed to a record stimulus of $5 trillion, it risks excluding most emerging and developing countries.

“The Trust Fund should earmark public health, social protection and jobs to ensure that the money reaches people, helps preserve jobs and stimulates the real economy in line with the UN Sustainable Development Goals. Public health and social protection are the first line of defence as economies come under unbearable strain and global supply chains are threatened. The scale of the human cost in the poorest countries requires the international system to deliver right away, and we musn’t forget that emerging economies too are experiencing capital outflows that are a grave economic threat,” said Burrow.

To read the special ITUC Briefing: