Artikels/Articles Trade unions reject the Wall Street Consensus at the Annual Meetings of the IMF and World Bank
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Amid a downgrade of global growth projections to their lowest levels since the global financial crisis, the International Monetary Fund and World Bank are pushing deregulatory structural reform. Working people in Ecuador and around the world are resisting this dangerous mix of austerity, deregulation, and attacks on labour rights.
The statement by Global Unions to the IMF and World Bank proposes an alternative path of inclusive and sustainable growth built around collective bargaining, public investment, and a just transition to a low-carbon economy.
In contrast, the IMF is urging deregulation, privatisation, and weakening of worker protections, especially in emerging and developing countries. The World Bank is moving in the same direction, promoting financial deregulation and a development model that prioritises the interests of private finance. A recent Bank publication recommended that countries combine weaker labour regulations with individualised, marketised schemes for social protection.
“Trade unions will stand strong against attempts to impose deregulatory structural reforms, which have a long history of causing economic crisis and instability. With a global slowdown occurring, more austerity and anti-labour reforms would be a risky mistake,” said International Trade Union Confederation (ITUC) General Secretary Sharan Burrow.
The disastrous effects of failed policies were recently seen in Ecuador, where the announcement of a package of structural reforms amid an IMF loan programme caused massive protests. The measures, including the expansion of temporary employment contracts and further cuts to the public sector, led trade unions and indigenous organisations to successfully fight back.
This structural reform agenda marks a return to the recipe of the Washington Consensus, a set of adjustment policies that wreaked havoc on developing countries in the 1990s. A new study from the Institute for Policy Dialogue, the ITUC and Public Services International shows that elements of the Consensus continue to be used. “Austerity: The New Normal - A Renewed Washington Consensus, 2010-24” describes an unrelenting wave of austerity and attacks on labour rights since 2010, when the IMF pressed governments to prematurely end fiscal stimulus measures taken after the global financial crisis.
A new version of the Washington Consensus has emerged: the Wall Street Consensus. Through its Maximizing Finance for Development approach, the World Bank is pushing for private finance to dominate infrastructure investments in developing countries. This approach will deepen financialisation, particularly shadow banking, and drive the use of Public-Private Partnerships that limit access to services and create hidden fiscal risks.
In the replenishment of the World Bank’s International Development Association, trade unions have urged the Bank and donor governments to instead focus on quality jobs, stronger labour market institutions, alignment with international labour standards and transitions from the informal to the formal economy. It is also crucial that development finance support free, quality public education. The ITUC and Education International have endorsed a global call for the World Bank and its private lending arm, the IFC, to stop supporting for-profit commercial education providers.
Burrow commented: “The Sustainable Development Goals can be a powerful guide for the international financial institutions on economic policy, education, labour and gender. Now is the time to reform multilateralism to achieve these goals.”
