ITUC advocates New Social Contract at historic Finance Ministers UN-meeting

ITUC General Secretary Sharan Burrow addressed the meeting of Finance Ministers convened by the United Nations and Finance Ministers of Canada and Jamaica on "Financing the 2030 Agenda for Sustainable Development in the Era of COVID-19 and Beyond".

Since the High-Level Event on “Financing for Development in the Era of COVID-19 and Beyond” on May 28, the ITUC has been participating in the process aimed at advancing policy measures for Finance Ministers to confront the crisis and achieve the Sustainable Development Goals (SDGs) in the longer term.

The Finance Ministers meeting, the first ever of its kind at the UN, saw an exceptional participation bringing together more than 60 countries and Institutions, representatives of civil society and the private sector.

The International Monetary Fund (IMF) Managing Director Kristalina Georgieva emphasised that the IMF is expanding the use of global reserve funds or Special Drawing Rights (SDRs) and extension of swap lines for greater social investment in developing countries. Strong support was generally given to extending the G20 Debt Service Suspension Initiative (DSSI) through 2021 to grant debt-service suspension to the poorest countries.

The head of the UN Economic Commission for Africa (UNECA) together with the African Union strongly underlined the issue of debt service payments which are becoming a regressive transfer from developing countries to developed ones, seriously compromising liquidity and financial stability: “macroeconomic fundamentals need to stay but we cannot go back to austerity” she said. This was echoed by ECLAC Executive Director who underlined the need for inclusion of middle-income countries whose insolvency could trigger dreadful consequences: global financial stability is “a public good” she said, highlighting the need for private sector creditors involvement and responsibilities.

Several participants urged the need to address revenue losses of countries because of tax evasion, corruption and other illicit financial flows.

The European Union - leading the workstream on “recovering better for sustainability” – emphasised the role of fiscal policies in supporting SDGs implementation, including scaling up social protection, as well as investments in climate change through financial instruments such as green bonds.

Sharan Burrow called on the Finance Ministers to take action on the following priorities:

- 1 Centrality of Jobs for sustainability: 400 hundred million jobs lost, with 1.6 billion informal workers. In such context, any form of debt relief extension should be conditional to the SDGs implementation, as well as investments that should be directed “to productive economy and we need to shift the parameters to that end” she said.

- 2 Scale up social protection: today 70 per cent of the world’s people cannot count on the security of social protection. We need a global mechanism – GFSP – to help countries most in need to sustain and expand protection in times of crises and to build resilience.

- 3 These are the pillars for a New Social Contract that trade unions demand globally based on the SDGs and the ILO Future of work Declaration

The policy options will be presented to world leaders at a follow-on High-Level Meeting of Heads of State and Government on 29 September 2020 to advance concrete solutions.



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