The model of globalization stands discredited: Time for change has come

Against the background of the ongoing global financial crisis the International Trade Union Confederation (ITUC) has published the following statement:

The political wrangling in the US Congress over a $700 billion bail-out plan may well reflect the disgust and anger of working people everywhere at their taxes being used to bail out those whose greed, irresponsibility and abuses have brought the world’s financial markets to the brink of collapse and raised the spectre of global recession.

But it has also deepened a crisis which threatens the jobs, homes and futures of billions of human beings – those who never drew profit from the years of excess, whose work has been underpaid and degraded and who bear no responsibility for what is now happening.

Having looked into the abyss they have helped create, policy-makers are waking up to the need for regulation of the world economy and for governments to finally take up the duties they have long abdicated - to set rules for markets, to protect and provide for their citizens, and to intervene to ensure socially equitable and sustainable outcomes.

This awakening comes late, but if it goes deeper than a passing concern to extinguish the fires raging in the financial markets which are threatening to engulf the real economy, then it is to be welcomed. Because only by breaking the habit of hanging on the coat tails of financial interests, abandoning their complicity in the generation of massive and growing inequality, and ending their underwriting of corporate greed and excess, can governments reconnect with the realities of the lives of working families, and begin to provide the leadership and the answers they demand.

The immediate task is to respond decisively and effectively to the financial crisis with assistance for its victims but without reward for its authors. But the scale of the challenge ahead goes far beyond even this massive task.

When the ITUC was founded in 2006, it highlighted the need for fundamental change in globalization and committed itself to bring it about.

The time for that change has come.

Resolving the financial crisis must go hand in hand with concerted international action to stimulate jobs and growth so that the imminent danger of world recession is averted, and economies are launched on paths of just and sustainable development.

The essential task of regulating financial markets, so as to shut down the option of a return to business as usual and a repetition of today’s debacle, must be one component of a wider agenda to reshape the management of the global economy.

The imbalances which have seen real wages fall or stagnate, at the same time as capital has reaped record profits, need to be redressed. Organising and bargaining rights, recognized internationally, must be enforced universally so workers can have real influence over their lives and their futures. The trade agenda, mired in the impasse of the Doha Round, can only move forward once it is based on the imperatives of decent work, development, rights and equity. The international community faces too the unavoidable obligation to agree quickly an effective plan to combat climate change, where failure would have consequences far beyond anything that financial meltdown might bring.

The bottom line is that the model of globalization which has reigned supreme for over two decades stands discredited. But in its failure are the seeds of opportunity for fundamental change.

The ITUC calls on all governments to seize that opportunity and to act with courage, vision and principle to reinstate commitment to social justice, decent work and sustainability at the heart of policy making and as the central objectives and rationale of economic activity.

Business cannot be the solution to hunger

While the US Congress is currently finalizing a $700bn bailout for financial firms, seems the UN General Assembly cannot mobilize the $72bn a year needed to realize targets set to end world poverty and hunger. "Money is on offer freely to reward the failures of the private sector in Washington. But in New York the pleas from poor countries, representatives from marginalized communities, and UN agencies, for a massive injection of finance to address the food crisis, appear to be falling on deaf ears”, said Colm Ó Cuanacháin, International Head of Campaigns at ActionAid International.

Adding to the conundrum, governments gathered in New York are turning to the private sector for financial help to fulfill the Millennium Development Goals, through a series of parallel meetings here. Public Private Partnerships are being announced as the new way forward for development, but with a total lack of transparency and accountability, and with no regard to the costs for poor countries. Corporate partnerships are being pedaled as positive supports for development, rather than profit oriented business relationships. Is it states that are responsible for fulfilling human rights, and if governments need to rely on companies to provide support, they have a duty to regulate the activities of these companies.

The British NGO War on Want attacked premier minister Gordon Brown for claiming that support for the summit from UK companies including mining giant Anglo American and Wal-Mart, including its British subsidiary Asda, can help achieve the development goals. War on Want research has revealed that Anglo American operations abroad are fuelling conflict and human rights abuse in developing countries. And in addition to Wal-Mart’s notorious anti-union practices, War on Want has found workers still paid less than half a living wage producing clothes for Asda in Bangladesh.

MDG week in New York: We have arrived in a multi-polar world

“The basic message of this week is that the world must find a new model of collective leadership following the collapse of US authority”, writes Jeffrey Sachs (see photo) from the Earth Institute at Columbia University in the FT’s MDG Blog today. “Like many crises, the fundamental decline of US leadership has been apparent for years, but it had proceeded gradually. Then, like a weak bank hit by a depositor panic, the collapse happened suddenly and in plain view.

At the UN, the world grappled with poverty, disease, hunger, and climate change in the near total absence of US leadership. This was pathetically underscored by President Bush, whose speech to the UN on Wednesday was filled with “terror,” “terrorists,” and “terrorism” 31 times, but didn’t include a single mention of “climate,” “environment,” or the “Millennium Development Goals” (MDGs). By the time of the UN’s MDG Summit Day yesterday, the US was simply nowhere to be seen, neither in the plenary sessions nor in the breakout events.”
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Trade unions call on EU to include development benchmarks and social chapters in EPAs

The International Trade Union Confederation (ITUC) and the European Trade Union Confederation (ETUC) have called on the EU to listen to its partners in ACP countries and to concentrate on a pro-development approach in negotiating Economic Partnership Agreements (EPAs). The EPAs are a new trade arrangement between Europe and the ACP (Africa, Caribbean, Pacific) countries which aim at putting their trade relationships in conformity with WTO rules. However, there is concern that EPAs could require ACP countries to open their economies unsustainably beyond their world-level commitments. As of now only the Caribbean region has confirmed its intention to sign a regional full EPA, possibly in October, although the date of signature has already been postponed several times. Negotiations with African and Pacific nations have been tense all along and could not be finalised before the end of 2007, the WTO-imposed deadline. As a result interim EPAs were agreed upon with 20 individual African and Pacific countries.

"While the European Commission sees interim EPAs as a stepping stone for regional full EPAs, many aspects of the agreements as currently proposed risk undermining ACP countries," said Guy Ryder, ITUC general secretary. "We urge the European Commission to show flexibility in the negotiations so as to ensure that EPAs contribute to the development prospects of ACP countries instead." In particular, trade in services, investment, public procurement, competition policies and intellectual property should not be imposed in the negotiations, and the EU should not demand that ACP countries open up to 80% of their markets to imports. Instead, EPAs need to become real instruments for the development of ACP countries and fully support endogenous regional integration processes as defined by ACP states.

Indeed, trade agreements struck between the EU and individual ACP countries regardless of the regional context might fragment already weak regional integration processes. In place of such deals, trade unions support the inclusion of development benchmarks in the EPA texts. These would reflect the development priorities of the ACP countries at both national and regional levels and make the realisation of trade liberalisation contingent on the level of economic and social development of each country in its process of regional integration. "Equally important is the call for strong, effective and operational social and labour chapters as full part of EPAs," said Ryder. "Trade can never be fair if comparative advantages are based on the exploitation of workers when they are not allowed to organise."

"The social chapter should also help to ensure that European multinationals in ACP countries engage in social dialogue with union representatives and use socially and environmentally responsible practices including vis-à-vis their local suppliers and partners," added John Monks, ETUC general secretary. "In addition, the EU should finance technical cooperation to help ACP countries with the implementation of ILO labour standards, to increase the focus and impact of development assistance on gender equality as well as to support trade unions' activities and build their capacities."

MDG Summit in New York: Additional $150bn per year needed

Ahead of a crucial meeting in New York this week to assess the state of the world’s fight against global poverty, international agency Oxfam called on world leaders to redouble their efforts to fight the impact of rising food and fuel prices – and the attendant economic slowdown from eroding real gains in poverty reduction. The latest UN estimates suggest that the number of malnourished people worldwide has increased by 75m, to 925m, reversing progress towards the Millennium Development Goal (MDG) of halving world hunger by 2015. Higher food prices indirectly affect progress towards many of the other Goals as well, not least because hunger negatively impacts on peoples’ ability to work, stay healthy and for children to go to school.

Alison Woodhead, Oxfam International’s spokeswoman in New York said: “In the face of these new and daunting challenges we need a dramatic shift in political will and ambition. This meeting must deliver concrete plans on how to keep these anti-poverty targets in our sights.” Around 90 Heads of State and Governments, along with the CEOs of the world’s biggest businesses and hundreds of anti-poverty organizations, are expected to gather in New York on September 25th for the High-Level Event on the Millennium Development Goals, which will be hosted by the UN Secretary-General Ban Ki-Moon. Oxfam is calling on them to treat this as an emergency summit and step up their efforts in the fight against poverty.

According to Oxfam, Leaders must not just reissue empty promises, with their fingers crossed behind their backs. “This is a poverty emergency that requires exactly the same attention and response as the financial crisis grabbing the headlines”, Woodhead said. Remarkable progress is possible, even in the poorest countries. In Rwanda the number of children dying from malaria has been cut by two-thirds in the last two years alone. A boy born in Tanzania today is 25% less likely to die by his first birthday than his sister born just four years ago. However on current trends, Oxfam warns that the MDGs will not be achieved. An additional $150bn per year is needed by 2010 to meet all the goals, less than double the amount spent ($85bn) to bail out a single insurance group, AIG.

This week, Oxfam and other international agencies launch a major new campaigning action called ‘in my name’, calling on citizens to hold their leaders accountable for promises made in the year 2000. The initiative brings together dignitaries such as Queen Rania of Jordan, Mary Robinson and Archbishop Desmond Tutu, and celebrities from all continents including Rahul Bose, will.i.am, Angelique Kidjo, Wyclef Jean, Annie Lennox and Sergio Mendes.

NGO recommendations ahead of Doha

On August 30, civil society organisations monitoring the review process of the
Financing for Development (FfD) published a document, Key Recommendations for the Doha Draft Outcome Document which calls for “a package of new, concrete, monitorable measures, coupled with a strong and explicit political commitment to implement them”. The FfD conference is scheduled to take place on 29 November-2 December 2008 in Doha. The recommendations, which have 60 signatories including Eurostep, Action Aid and Oxfam International, include binding timetables to reach the UN target of 0.7% of GNI to ODA by 2015 at the latest, making use of the proceeds from emissions trading for international measures to combat global warming, expanded debt cancellation and the removal of aid conditionalities.

The document highlights that “it has now become clear that agriculture, food security and food sovereignty need to be put back on to the development agenda”. It also stresses the need to address the challenge of financing climate adaptation and mitigation, to allow “democratic and equitable participation of all countries in global and national-level policy-making” and to recognise gender concerns and women’s participation as integral to effective policy-making.

Calls on the EU to pass the €1bn food facility and save 1 billion people on the brink of starvation

SAAPE, a South-Asian alliance of civil society organizations and social movements, speaking for millions of small and marginalized farmers in the region, yesterday called on the European Union to use the €1bn fund as an immediate and essential response to the global food price crisis driving millions into destitution and hunger. At the occasion of a special meeting of the European Parliament’s development committee on the €1bn fund with high-level guest-speakers, such as the heads of the Food and Agriculture Organization (FAO) and the World Food Program (WFP), SAAPE welcomes the ambitions by the European Commission and MEPs like Gay Mitchell and Thijs Berman to use the €1bn to fund agricultural development in developing countries.

“On moral grounds, the EU must pay back to small farmers in developing countries the €1bn € it has saved by way of farm export subsidies", said Prerna Bomzan, Programme Co-ordinator for the SAAPE-Eurostep EU advocacy initiative in Brussels. Even with food prices reaching an historical peak, throughout the developing world poor small scale farmers can barely survive from what they harvest. “The additional funds will help in boosting our agriculture in a sustainable, humane and regenerative way”, said Sarath Fernando with the Movement for National Land and Agricultural Reform in Sri Lanka. “And we also urge the EU not to give in to demands by multinational companies to implement an industrial agriculture system, based on mono-culture, hybrid seeds, chemical fertilizers and genetically-modified organisms, which is the very reason for the current deadly crisis”.

With severe droughts leading to crop failures from Australia to Latin America, the loss of arable land to an obscene biofuel production and famines in Africa making the headlines again, the call for help seems to be more urgent than ever. Especially at a time when, according to latest UN and World Bank announcements, aid to poor nations has slumped and more people suffer from extreme poverty than previously thought. As an answer to the food price crisis SAAPE favors food sovereignty. “It is the inalienable right of peoples to define and implement their own agricultural policies, which are ecologically, socially and economically appropriate to their unique circumstances”, said Prem Dangal with the All Nepal Peasants’ Federation that was a forerunner in enshrining the Right to Food Sovereignty in the country’s interim constitution in 2006. Empirical evidence shows that farmers, who have maintained their right to choose their mode of production, have all over the world found distinct approaches to secure food safety and have managed to feed themselves and their families sufficiently.

SAAPE is a regional alliance of civil society groups and social movements from Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka, working together towards poverty eradication by combating the harmful socio-economic policies of globalization and neo-liberalization. Further information can be found at: www.saape.org.np.

World Bank’s Doing Business: Endorsing unacceptable labour standards

The just published 2009 edition of World Bank’s highest-circulation publication, Doing Business, rewards countries that have not ratified ILO conventions for being the world top performers for “employing workers”. Doing Business 2009 also repeats the practice of making unsubstantiated claims of causality between its “employing workers” indicator, which gives the best ratings to countries having the lowest level of mandated workers’ and social protection, and positive economic outcomes, even though the Bank’s own internal watchdog unit found no evidence of any relation between the two. Last June, the Bank’s Independent Evaluation Group declared that, “no significant association emerged between … [the Doing Business indicator on] employing workers and employment” and blamed the publication for making “overstated claims of the indicators’ explanatory power”.

Doing Business 2009 falsely asserts that, “An economy can have the most flexible labor regulations as measured by Doing Business while ratifying and complying with … the ILO core labor standards”. In reality, none the countries designated by Doing Business 2009 as the top four for employing workers ratified all of the International Labour Organization’s core labour standards (CLS) conventions. Two of the top four countries ratified not a single one of the eight CLS conventions and a third ratified only two of out of eight. “The Bank should draw the appropriate lessons from its own evaluation unit, which found the methodology of Doing Business to be flawed in identifying labour standards and contributions to social programmes as nothing more than obstacles to investment. The mandate to determine the Bank’s policy recommendations for developing countries’ labour regulations and social protection should be taken away from Doing Business,” said Guy Ryder, general secretary of the International Trade Union Confederation (ITUC).

The World Bank and IMF have used the Doing Business indicators in numerous country-level policy reports to advise governments to dismantle workers’ protection or reduce funding for social safety nets. In some cases, countries have been forced to comply with the recommendations through loan conditions, even if such measures work at cross-purposes with the Bank’s stated goal of eliminating poverty. For example, Doing Business supports the reduction of the minimum wage in Brazil because increases applied by the current government have meant that it exceeds the low threshold that Doing Business deems acceptable for business owners. However, the World Bank’s 2008 Country Partnership Strategy for Brazil highlights “increases in the minimum wage” as one of the causes of a significant decline in poverty and of the fact that Brazil’s income inequality, which used to be among the highest in the world, “is finally eroding”. At the same time that the Bank recognizes that Brazil has succeeded in making strides towards reduction of poverty, which the Bank formerly described as its “overarching goal”, the institution’s highest-circulation publication promotes measures that would increase poverty in the country.

On the other hand, Doing Business has lauded Belarus for its top-ranking “employing workers” indicator, even though the ILO has condemned the authoritarian regime’s curtailing of workers’ rights as a violation of the CLS. The violation led to the European Union withdrawing trade preferences under the Generalized System of Preferences. “By endorsing unacceptable labour standards that have resulted in reduced access for Belarus exports to the world’s largest market, one wonders how much of a service Doing Business and the World Bank are actually rendering to those who wish to ‘do business’ in the country,” said the ITUC’s Guy Ryder.

Doing Business 2009 continues the practice of the first five editions in making unsubstantiated assertions linking the Doing Business labour indicators to positive economic outcomes, using as references unpublished studies and internal “working papers” prepared by Doing Business staff, none of which can be verified by credible researchers or the ILO. Stated Ryder: “It is surprising that, even after the Bank’s own evaluation unit found no links of causality between the indicators and employment and criticized Doing Business for making such claims, the Bank’s highest circulation publication continues repeating the same assertions. This will do nothing to enhance the World Bank’s aspiration to be a global ‘depository of knowledge’ on development issues.”

New guide on China's overseas dam industry

International Rivers has just published a new guide for concerned groups and dam-affected communities: The New Great Walls: A Guide to China’s Overseas Dam Industry. Chinese companies and financiers are key to hundreds of new dams around the world, particularly in Southeast Asia and Africa, but also in countries like Pakistan and Albania. With Chinese dam companies and financial institutions now outpacing their competitors overseas, this guide provides helpful tools for engaging with the Chinese dam industry on issues of social and environmental responsibility. The guide addresses the question: what can communities impacted by these projects do to protect their rights, and advocate for rivers targeted for dams built by China?

The guide includes a “who’s who” among Chinese companies and financiers; information about policies and commitments Chinese companies and financiers should follow; a map of China’s major overseas dam projects; analysis of the reasons behind the global expansion of China’s dam industry; an action guide for how to address problematic dams built by Chinese companies and financiers, and who to contact for help. Please find the as PDF file >>> here. Hard copies may be ordered free of charge by e-mail >>> nicole@internationalrivers.org.

Last-ditch diplomacy: Agenda for Action still needs action, says Oxfam

According to Oxfam International, last-minute negotiations pushed by developing country and European ministers at the High Level Forum on Aid Effectiveness have secured commitments to improve international aid. The world will now be watching to ensure all donors implement the Accra Agenda for Action and go further to make aid more responsive to the priorities of developing countries. “The stage is set for important improvements in the way aid is delivered. But the Accra Agenda needs to be backed by urgent action if it is to live up to its name. It won’t have any impact on the lives of people living in poverty unless its promise is put into practice,” said Oxfam International head of delegation Robert Fox. “This agreement must be a floor, not a ceiling. We encourage all donors to go further in accelerating the pace of reform.”

A compromise agreement was reached among official negotiators on Wednesday, without any time-bound targets. But developing country and European ministers arriving in the Ghanaian capital argued for specific commitments and dates for action. Developing countries and non-governmental organisations have pointed to the urgent need to reform aid to prevent waste and give developing countries more control.

“There is much more that can and must be done to improve quality, but equally important we need to boost the quantity of aid if we are going to end poverty and improve access to health care, education and clean water,” said Robert Fox. “At the UN meetings later this month on the Millennium Development Goals and the November meetings on development finance, donor countries have to get serious about scaling up aid to meet the enormity of the challenge. With more and better aid, we can make a real difference.”

Civil society statement in Accra warns urgency for action on aid

Over 600 representatives from 325 civil society organisations and 88 countries have met in Accra to debate what actions must be taken to reform aid, and finalize their recommendations to the Third High Level Forum (HLF3) on Aid Effectiveness starting today. CSOs have engaged energetically with the preparatory processes for Accra over the last year. Although they have welcomed these opportunities, they are very disappointed that the Accra Agenda for Action as it stands promises little change. Since the Paris Declaration of 2005, donors in particular have made very slow progress in making aid more effective. Too much aid remains driven by donors' priorities and interests rather than by the national priorities defined by developing countries.

CSOs call on officials present in Accra to respond with urgency. What is needed in Accra are clear time-bound commitments to deliver real results for people on the ground, towards the eradication of poverty, inequality and social exclusion. This is a political not a technical challenge, and should be treated as such. The Accra HLF must also deliver real measurable and time-bound commitments to address some of the problems which are not adequately dealt with in the Paris Declaration. Donors must take responsibility for improvements which only they can deliver (e.g. untying aid and improving medium-term predictability of aid) and all governments must increase the democratic accountability and transparency of their use of aid resources, policies and activities.

If the Accra High Level Forum is to be seen as a credible response to the serious challenges of making aid more effective, the Accra Agenda for Action must at a minimum:

* Commit to broadening the definition of ownership so that citizens, civil society organisations and elected officials are central to the aid process at all levels.
* Set time-bound and monitorable targets to:
- Stop short-term aid and commit to ensuring that 80% of aid is committed for at least 3-5 years by 2010.
- Reduce the burden of conditionality by 2010 so that aid agreements are based on mutually agreed objectives.
* Set a more ambitious target to make all technical assistance demand-led by 2010.
* Commit to end tied aid, including food aid and technical assistance, by 2010.
* Commit donors and recipients to make the aid system more accountable by developing and implementing new standards for transparency by 2009 which ensure that accurate, timely, accessible and comparable information about aid is proactively communicated to the public.
* Commit to improve the monitoring of aid effectiveness by adapting existing Paris indicators and by integrating new indicators from the Accra Agenda for Action by 2009; by supporting independent and citizen-led monitoring and evaluation systems and by agreeing an inclusive evaluation process to assess the impact of Paris on poverty reduction, gender equality, human rights and environmental sustainability.

Please find the full statement at www.betteraid.org.

Aid Effectiveness: US and Japan are blocking progress, says Oxfam

Ahead of an international conference this week to reform aid, a battle is emerging over the future direction of aid and development. The High Level Forum (HLF) on Aid Effectiveness – in Accra, Ghana, from 2 to 4 September – is part of a process that began three years ago in Paris to make aid more effective and give developing countries more control. Representatives of donors and recipient governments are meeting today to reach consensus on a communiqué (the Accra Agenda for Action). But differences risk derailing much-needed aid reform.

“Urgent action is needed at Accra but progress in raising the bar is being blocked. While some countries are willing to move ahead in setting more aggressive targets, others, including the US and Japan, are dragging their feet,” said Oxfam International head of delegation Robert Fox. “Many donors want changes that will hand a lot more power, a lot more quickly, to effective developing country governments. The US and Japanese governments don’t. This isn’t just a food-fight between bureaucrats. Until you solve the political question of who should shape development, you cannot solve the problems of poverty and inequality.”

An OECD (Organisation for Economic Cooperation and Development) survey on progress in reforming aid, to be released this week, shows that where recipient governments have improved their management of aid, donors have still not kept their commitments to give them more control and improve aid efficiency. Rich countries’ insistence on using separate procedures to manage aid wastes both time and money, said Oxfam. In Mozambique, for instance, donors were spending a staggering $350m a year on 3,500 technical consultants, more than four times the annual salaries of 100,000 Mozambican public-sector workers. “One of the best ways to support developing countries that are working hard to reduce poverty is to channel funds directly to their governments – yet right now, a tiny proportion of global aid is delivered in this way. Recent reviews of aid to governments in Rwanda, India and Zambia show that it is helping get many more children into school and assuring many more people get proper healthcare when they are sick. Governments need direct aid to pay for the salaries and training of millions more teachers and health workers,” said Robert Fox.