VARTIKA RASTOGI | 19 OCTOBER, 2018
‘Stop promoting labour market deregulation, a race to the bottom’
The World Bank and the International Monetary Fund (IMF) recently held their Annual Meeting in Bali, Indonesia between October 8 and 14 to discuss issues of global economic and developmental concern, and to provide recommendations for the World Development Report 2019.
The report, which proposes to delink corporations’ responsibility to comply with labour regulations in order to increase the flexibilization of labour, was met with opposition from 36 women’s and labour rights groups across the globe, who argued the move would weaken labour rights and protections, leading to increased inequalities and poorer working and living conditions for the world’s labour forces.
According to the report, companies should not be burdened by the ‘rigidities’ of labour regulations. Instead, it recommends that states finance inclusive social protection through measures such as value-added taxes and reduced subsidies.
These are regressive measures, says a statement issued by the Asia Pacific Forum on Women, Law and Development (APWLD) – a leading network of feminist organisations and grassroots activists in 27 countries with over 32 years’ experience in advancing women’s human and civil rights and developmental justice – that “have gendered impacts and hurt the poor the most”.
The statement adds, “The global economy is currently functioning through women’s underpaid and unpaid work. If corporations are not obliged to provide workers with decent, non-discriminatory and safe working conditions, with the excuse of improving their adaptability, it will disproportionately affect women workers and promote a race to the bottom, with women at the bottom”.
The APWLD also argues against the report’s proposal to do away with regulations such as minimum wage and employee retention and dismissal, in favour of ‘flexicurity’ in the market. Whereas the World Bank argues that increasing or retaining regulations would lead to an ‘informalisation of work’, the APWLD advocates the implementation of direct and progressive taxes, such as corporate taxes, and taxes on capital, as well as the strengthening of global tax cooperation through the establishment of a Global Tax Body, instead of putting the pressures on the poor to finance public services.
The APWLD’s Labour Programme Focal Person Daisy Arago said, “The World Bank argues that rising inequality in many countries is merely ‘a perception’ and ‘a feeling’ as social media increases people’s exposure to ‘divergent lifestyles’. It also argues that the notion of a race to the bottom is ‘unfounded’. However, the report only cites data of 41 emerging economies to support its argument. It dismisses the reality of most countries in the world, where the gap between the rich and the poor has kept increasing due to higher privatisation of public services, deregulation of people’s rights and protections, as well as trade liberalization.”
“There is ample evidence that global inequalities are increasing, and World Bank and IMF play a huge role in accelerating that,” she added.
According to Arago, the World Bank is complicit to a great extent in maximizing corporate greed at the expense of the poor: “The World Bank finances a lot of projects in many countries in the Asia Pacific region. These projects range from dams, eco-tourism, palm oil plantations to so-called new urban city planning, or new land management schemes. Such projects usually come with a lot of money from the Bank. However, the money often doesn’t go to the people, or to small sellers or enterprises in many of these communities, but to large corporations.”
“A lot of the corporations financed by the Bank, directly or through the International Finance Corporation, will displace existing communities and existing local economies or livelihoods, with whatever the corporations would like to do with the piece of land or natural resources. There are so many examples, whether in Buong Kak Lake or investment in the palm oil industry in Indonesia, where Bank-funded projects are displacing communities so corporations can build their own infrastructures. These two cases alone illustrate how the Bank puts corporate greed and interests above people, especially the poor, and the Bank’s investments are littered with many such examples,” Arago added.
Arago believes that the World Bank and IMF should “stop promoting and recommending policies to make labour more flexible and precarious”. According to her, they should focus instead on “strengthening labour market institutions to ensure workers’ rights and protections; promote the rights to organise and unionise; and ensure all workers, including informal workers, have decent work and living wage, to increase the labour share of national income. If the World Bank genuinely aims to reduce poverty and bring prosperity, it must strengthen labour power and workers’ collective bargaining. This is the long-lasting way to reduce income inequality, as the history of labour movements proves.”
In their statement the APWLD expresses deep concern about “the World Bank’s recommendations encouraging states to contravene their human rights obligations”, and reiterate “the recommendations of the Independent Expert on the promotion of a democratic and equitable order addressed to the World Bank and IMF that there should be no ‘human-rights-free zones’, and that the Bank must stop promoting labour market deregulation”.
Even as the Bretton Woods institutions strive to keep pushing deregulation on the world forum, protests by opposition groups such as those represented in the APWLD prove that the days of welcome to unresponsible corporate functioning are far from near.