Geneva – Call it socialism, protectionism, ‘lean and mean’ governments or semi-closed markets. Or need a punching bag? Of course the IMF and the World Bank, seen as culprits of the global crisis by prescriptive aid --denying developing countries the right to cheap finance sans conditions.
This week at a special 3-day‘Jobs Summit’ of the International Labour Organisation (ILO), all along the corridors of the Palais des Nations building, the headquarters of the United Nations’ European complex, it was all about changing the economic order and moving away from the Washington consensus of free markets and financial speculation, and reforming these institutions. IMF and World Bank bashing was the order of the day from presidents to workers to non-governmental organizations. The Washington consensus generally refers to the World Bank and the IMF and its policies towards developing countries.
 |
| French President Nicolas Sarkozy (2ndR), Former French minister Nicole Ameline (L), French “Cour des Comptes” President Philippe Seguin (2nd L), French Foreign affairs minister Bernard Kouchner (3rd L) and French Labour, Labour Relations, Family and Solidarity minister Brice Hortefeux (4th L) listen ILO Director-General Juan Somavia opening the 98th International Labour Conference on the Global Jobs Crisis at the UN headquarters in Geneva. AFP |
Another word that echoed across the conference was the Kenyan word ‘Harambi (pulling together)’. When Kenyan Vice President Stephen Kalonzo Musyoka told a panel discussion that his government had put ‘Harambi’ at the top of the agenda, thinking out of the box and using extraordinary ways to tackle the crisis, panel moderator and CNN anchor Charles Hodson was quick to suggest that ‘Harambi --That’s what this conference is all about. Can’t we adopt this for this conference?”
And that’s what ILO’s enigmatic Director General Juan Somavia did: “I say everyone is accountable in making this Jobs Pact work. We heard this great Swahili word ‘Harambi’ about an ancient culture. Let’s take ‘Harambi as the new direction, as a mandate for change. With ‘Harambi’ on one side and decision-making on the other, we’ll certainly succeed.”
Mr Somavia, who has an infectious smile, also said, “We have to act now. We have to act together with others. We need to give life and commitment to the suggestions that came out of this meeting.”
Nine heads of state, five vice presidents and dozens of ministers were among nearly 5,000 participants from more than 160 countries attending the biggest-ever gathering at an ILO event here.
Other heads of state attending were Argentinian President Ms. Cristina Fernández de Kirchner, Finland President Ms. Tarja Halonen, Mozambique President Armando Guebuza, Polish President Lech Kaczyñski, Togo President Faure Essozimna Gnassingbé, Burkina Fasa Prime Minister Tertius Zongo and Jamaican Prime Minister Bruce Golding.
While nearly 5,000 delegates from more than 160 countries discussed ways and means of tackling a crisis precipitated by financial speculation that triggered the economic crisis and resulted in the loss of millions of jobs, perhaps the most profound statement about the crisis came from French President Nicholas Sarkozy, "For those who think this is a temporary crisis, it’s a suicidal approach. We can’t wait... we have waited too long. We must act now," he warned, adding that financial speculators are already back at work with oil prices on the rise. Financial speculation has been the cause of collapse of many banks and financial institutions in the United States and in some countries, triggering a ripple effect across the world.
Mr Sarkozy said the world cannot be governed by the markets or laws of supply and demand. "If there is no global regulation, globalisation will not survive the law of the jungle. There cannot be freedom and liberty without rules."
Mr Sarkozy, whose presence at the meeting led to tight security in the complex, said: “The crisis has given us a license to imagine. There is no time to retreat, more time to lose.” He hoped that action would be taken on the decisions made at the April G20 summit in London where - among other measures - the IMF said it would move away from imposing conditions on standby credit facilities.
But that’s the point: How fast has the IMF moved on its promise? ILO officials say many countries are patiently waiting for the IMF to deliver on assurances given at the G20.
Alicia Barcena, Executive Secretary of the Economic Commission for Latin America and the Caribbean, didn’t mince words as her time came for ‘IMF’ bashing. “Why should the IMF interfere in our social and development policies? The IMF is the lender of last resort and should not impose conditions that lead to problems in social systems, education and health.
They must stop this prescriptive lending.” Brazilian President Luiz Inacio Lula Da Silva even more outspoken than Mr Sarkozy, in his comments, deviating from a prepared text to slam the agencies, saying the ‘Washington consensus’ is over. "We need to build a new world based on equitable distribution of wealth," he said.
The summit discussed a Global Jobs Pact (GJP) proposed by the ILO for ratification at the main ILO annual conference which is running simultaneously from June 3 to 19. Mr Lula, welcoming the GJP, said the international community cannot allow more jobs to be lost in poor countries. "G20 leaders promised not to bail out banks and financial institutions, but protect jobs and create jobs. We need to build a new [economic] model that’s equitable," he said.
The GJP calls for high levels of employment and decent work for all. It also calls for an open economy that delivers opportunities and fairness alongside a sustainable environment and low carbon growth. It stresses the importance of social protections with strong and affordable social security systems and workers rights. Mr Lula condemned US-based credit rating agencies, saying that while they go around warning other countries, "they could not stop the risk in their own countries." "We cannot live in a financial system that speculates on paper, this is unproductive and doesn’t create jobs." He was referring to US financial institutions and the sub-prime lending which triggered the crisis. Perhaps the silver lining in this crisis is that India, China and the Arab states have not been as affected as much as other countries.
In India and China’s case, their large domestic markets have insulated them from external fundamentals unlike a country like Singapore which is wholly dependent on the outside world for everything. The Arab states, probably the biggest employer of workers from outside, has strong financial reserves that is sustaining infrastructure development and other economic activity. The exception however is Dubai where there has been a contraction in construction activity. Ibrahim Awad, Director of the ILO’s International Migration Programme, says there has not yet been any major loss of jobs or reduction in remittances - which countries like the Bangladesh, Indonesia, Philippines and Sri Lanka depend on.
"While some part of the construction industry has been affected in Dubai, by and large not many workers are returning home," Awad told the Sunday Times.
However, he said while the impact in the Middle East has been marginal, the situation is far more serious in Central Asia - where thousands of people migrate to work in Russia, a country severely affected by the crisis. In Kazakhstan, for example, Mr Awad estimated that remittances account for 45% of GDP. "That’s half the economy that is dependent on remittances," he explained.
While it’s difficult to assess (from a Sri Lankan viewpoint) the success or not of a conference of this magnitude which didn’t have any conclusions or a set of recommendations, the driving force here and the realization that things have to change was in the role of the IMF. There was no doubt that the bashing that the IMF took at this conference in front of nearly 5,000 delegates was a lesson it would never forget.
Among new terms used regularly by speakers - that may be of interest to a Sri Lanka audience – was this one: ‘green shoots’. The quick and easy meaning is that it represents the beginnings of economic growth after a recession.
On the lighter side, there was a demonstration outside the UN headquarters by Geneva-based Iranian students and Iranian migrants protesting against the presidential election in Iran.
Dozens of speeches were made and millions of documents churned out at this meeting on all issues relating to the job crisis. Social policies and stimulus packages are the order of the day in resolving the crisis and this was clearly emphasized at the Geneva meeting. For this to happen, speaker after speaker spoke on the need for governments, employers andworkers to come together to make the pact work.
However delegates, including the Sri Lankan team lead by Labour Minister Athauda Seneviratne, are unlikely to forget the inspiring words and strong message by Sharan Burrow, President of the International Trade Union Federation.
Outspoken as ever, she said: "The fault (in the global crisis) was obvious… corporate greed and self interest corrupting not only the board room, but the political will of many governments." She said the workers are angry and demand fundamental change. "We are angry that tens of millions
will lose their jobs to join those who are already unemployed. Some 200 million will be forced into extreme poverty - joining the 1.2 billion who live on less than two dollars a day," she said, adding: "The word from workers and trade unions is clear. The party is over.
There can no longer be business as usual." Strong words indeed but will Sri Lankan employers take this to heart or still consider job losses as inevitable because that’s the way the markets operate? Or will they go with the new international trend now – pursued by the likes of the French and Brazilian Presidents and others – that a new economic order is needed where people are more important than markets,than supply and demand? Let’s wait and see. |
E-mail