New York, 24-26 June, 2009
EXECUTIVE SUMMARY
1. The ITUC, representing 170 million workers organised in 312 national trade union centres in 157 countries, calls for a strong Outcome Document of the UN Conference on the World Financial and Economic Crisis and its Impact on Development. The Document should serve to forge a new global consensus on the systemic reforms and policy responses required to restore growth with equity, and give developing countries very real prospects for achieving the MDGS and the broader Internationally Agreed Development Goals (IADGs).
2. Imbalances in the global economy, unregulated capital and huge concentrations of wealth in a financialised economy disconnected from the real economy were unsustainable, and have led to a severe economic meltdown.
3. The human costs can be measured in the jobs crisis, increasing income inequality, rapid increases in unemployment, and growing hunger and poverty in developing countries.
4. Trade unions call on Member States to adopt an Outcome Document of the Conference that recognises the root causes and the severe social and developmental impacts, and that agrees to a set of bold, decisive actions within a comprehensive and coordinated framework that is adequate to the task of achieving enduring, sustainable solutions. Trade unions insist that the decent work dimensions of social dialogue and respect for fundamental principles and rights at work are critical components for achieving distributive justice within a new consensus for restored growth with equity, and that these must be prioritised.
5. The report of the Stiglitz Commission of Experts set up to explore solutions to the crisis (the Stiglitz Commission Report) contains just such a comprehensive set of recommendations which should be fully incorporated into the Outcome Document of the Conference.
6. Trade unions support the Report’s recommendations for strong, global coordination of fiscal stimulus measures to finance the implementation of countercyclical policies with robust distributive mechanisms to stimulate aggregate demand, restore long-term growth, drastically reduce inequality, and eradicate poverty. Further details of Global Unions’ proposals to end the global economic and financial crisis are contained in the trade union statements to the G8 L’Aquila Summit (Italy, July 2009) and G20 London Summit (April 2009).
7. Trade unions assert that countercyclical policies should prioritise the strengthening of labour markets through, inter alia, job-intensive investments in physical and social infrastructure; large-scale investment in green infrastructure with an emphasis on skills development for green and decent jobs; provision of credit for SMEs to enhance their capacity to maintain productivity and decent jobs; strengthen macro-economic stabilizers such as income support measures and social insurance, with a focus on easing the burden of women’s unpaid work in the care economy, and freeing them for jobs created through new investments; and focus on groups/sectors particularly hard-hit by the crisis: young, older and unskilled workers, temporary and part-time workers, those in informal and unprotected work, women and migrants.
8. Developing countries must be allowed the policy space they need to implement countercyclical policies, devoid of harmful policy conditionalities of the IFIs.
9. Trade unions call on all Member States to support the Stiglitz Commission Report which proposes a number of mechanisms to mobilise adequate resources for stimulus packages for developing countries, notably: dedicating 1% of the stimulus packages of rich countries to low income countries over and above ODA commitments which should stay on track; issuing IMF Special Drawing Rights accessible to developing countries, to offset the imbalances and inequities created by the stimulus and bail-out measures implemented in industrialised countries; augmenting liquidity through regional cooperation arrangements; and creating a new credit facility allowing developing countries to access liquidity quickly without inappropriate policy conditionalities.
10. Stimulus packages constitute a short to medium-term measure that should begin a process of fair, re-distributive, demand-led growth in the global economy. It must be linked to longer term systemic reforms within a new financial and development architecture that effectively regulates the financial sector, and ensures that it carries out its real function, namely to serve the interests of the productive economy and sustainable development.
11. Global unions propose a number of regulatory reforms, notably:
a. Clamp down on the ‘shadow’ financial economy Governments must ensure full regulatory coverage of all institutions, products and transactions.
b. Governments must agree to end tax and regulatory havens and create new international mechanisms for tax cooperation, including strict reporting requirements for multinational companies and other investors, and sanctions to protect their tax base from abusive practices, with an international mechanism for addressing matters related to tax cooperation through upgrading the UN Committee on Tax matters to an intergovernmental body, as called for in the Doha Declaration.
c. Increasing access to finance for developing countries, including through Special Drawing Rights.
d. Reform the private banking business model to prevent asset bubbles and reduce leverage risks.
e. Protect working families against predatory lending by providing for the transparency of financial contracts (housing, credit cards, insurance), access to effective recourse, proximity of services and affordability
f. Consolidate and enhance the public accountability, mandate and resources of supervisory authorities.
g. Restructure and diversify the banking sector through a diversity of business models and legal forms, to help build balanced and robust domestic financial services that serve the real economy and meet the needs of working families.
h. Protect Workers’ Pensions through the strengthening of existing government guarantee schemes, pre-funded regimes and pension fund investment regulation generally, including ensuring employers take their share of the pension risk and funding responsibilities.
12. Systemic reforms must include debt restructuring through a Sovereign Debt Restructuring Mechanism (SDRM) to provide a framework for fair and transparent debt workout, led by a neutral arbiter or ombudsperson that is not the creditor, thereby avoiding conflicts of interest. Within this framework, measures such as debt moratoria and debt cancellation should be considered on a case by case basis, and the issue of the protection of countries from predatory practices such as vulture funds should be addressed.
13. Corrective actions are needed to adjust those trade and investment agreements that hamper the capacity of developing countries to implement counter-cyclical policies, because of obligations on capital market deregulation and liberalisation.
14. The IFIs must reach early agreement on revisions of their governing structures, to increase developing-country representation substantially. Developing countries must achieve at least parity representation to industrialised countries at the World Bank, by virtue of its role as a development institution. Representation must be substantially improved for the two groups of countries are currently under-represented in the IMF’s decision-making structures: the group of “emerging economy” countries which have been called upon to make additional resources available to the Fund, and other middle- and low-income countries currently using the IMF’s assistance, where the Fund’s lending policies have major implications for domestic policy.
15. Member States at the UN must move decisively on global governance reforms, including IFI reforms, placing social priorities at the centre of international governance with the setting up of a Global Economic Council (GEC) which will be the locus of forging a new global consensus on sustainable development policies, backed by the kinds of institutional reforms needed to restore lasting growth. An International Panel should be established to serve as an advisory body to the GEC. This panel should include representatives of trade unions.
16. Functional linkages between the UN and the G20 processes must be established, in the interests of inclusive, democratic global governance, and policy coherence.
17. The role of the ILO, addressing the jobs crisis, as part of a global coordinated process, must be fully recognised. The Global Jobs Pact, underpinned by the ILO Declaration on Social Justice for a Fair Globalisation, provides guidelines, policy and programmatic support for national policy agreements and for development cooperation agreements specifically designed to strengthen labour markets, promote decent jobs and social protection in developing countries, and all UN member states should assist fully in its implementation.
18. Member States need to support the completion of an ambitious agreement by the United Nations Framework Convention on Climate Change (UNFCCC) at Copenhagen in December. This will require action on Green Jobs, financing of support for developing countries and the inclusion of “just transition” strategies in the agreement adopted in Copenhagen.
19. Consultative arrangements should be put in place within the Working Groups agreed by the UN Conference, to ensure the continuing engagement of trade unions and other representative civil society organisations in follow-up and implementation of measures for effective governance of the global economy, restored global growth and shared prosperity for all.
20. Trade unions call on Member States negotiating the Outcome Document to show the necessary political will, and to agree to a strong, pro-development Document that initiates an inclusive, democratic process towards real and lasting solutions to the crisis, as outlined in the recommendations of this Statement.
