[stop-imf] ICFTU: IFI Policies and the Failures of Corporate-Driven Globalisation

[Robert Weissman]

September 26, 2002
INTERNATIONAL CONFEDERATION OF FREE TRADE UNIONS (ICFTU)
 
ICFTU OnLine...
163/260902/JL 
 
New ICFTU report released to coincide with the 28-29 September annual
IMF and World Bank meeting

Changing the Model: IFI Policies and the Failures of Corporate-Driven
Globalisation
 
Brussels, 26 September 2002 (ICFTU online): In a statement issued to the
28-29 September annual IMF and World Bank meetings in Washington, the
Global Unions group is calling for a re-examination of the basic
premises used by the International Financial Institutions (IFI) in the
wake of the recent spate of corporate scandals. The statement, entitled
'Changing the Model: IFI Policies and the Failures of Corporate-Driven
Globalisation,' attacks the promotion of "dysfunctional practices of US
capitalism" in developing countries by IFIs and condemns the dogmatic
"fix it, even if it isn't broken" approach to privatisation.
 
"IFI policies to promote privatization, market-friendly deregulation,
and openness to foreign investment were carried out on the premise that
these corporations were inherently more efficient and immune to
corruption than any developing country public authority. This is clearly
false," stressed Guy Ryder, ICFTU General Secretary. 
 
The ICFTU states that "the spate of corporate collapses have brought to
light incidences of company executives extracting huge personal gains
from failing corporations, large financial institutions acting in
connivance with corrupt corporate practices, massive accounting fraud
and laughably weak regulatory control. These private sector abuses in
the world's most powerful economy dwarf the level of corruption in many
emerging economies and give new meaning to the term 'crony capitalism'."

 
As such the ICFTU and the other organisations in the Global Unions group
are calling for a re-examination of fundamentally erroneous IFI
policies. According to the statement "these policies include dismantling
public pension programmes in favour of privatised funds, privatising
basic services without ensuring adequate regulatory control, and
applying macroeconomic austerity programmes that may be advantageous for
the financial sector, but detrimental to the vast majority of the
population."
 
Instead the IFIs must adopt alternative policies such as including
binding international standards for the prudential regulation of
financial markets covering capital reserve requirements and limits to
short-term foreign currency exposure, which can promote growth,
regulation, and decent employment for women and men world-wide. Another
priority must be the rapid establishment of a mechanism allowing for
countries close to default to declare a temporary debt payment
standstill and for an orderly renegotiation of the debt. "It would
certainly not be acceptable to wait three years before putting in place
any kind of debt restructuring mechanism, as the IMF alluded to last
autumn," stated Guy Ryder. "Permitting other countries to fall into the
situation of Argentina would not only cause terrible damage to the
country concerned, but would further destablise the entire world
economy."
 
The full range of in-depth proposals from the ICFTU can be found in a
new report- Trade Union Proposals for Reforming the International
Financial System-also to be released in the run-up to the IFI annual
meeting. This document can be found on the ICFTU website at:
http://www.icftu.org/displaydocument.asp?Index=991216512&Language=EN
 
For further information:
 
Interview with James Howard, ICFTU Director of Employment and Labour
Standards:
http://www.icftu.org/displaydocument.asp?Index=991216511&Language=EN 

ICFTU statement to IFI meeting- 'Changing the Model: IFI Policies and
the Failures of Corporate-Driven Globalisation'
http://www.icftu.org/displaydocument.asp?Index=991216493&Language=EN 
 
 
 
The ICFTU represents 157 million workers in 225 affiliated organisations
in 148 countries and territories. ICFTU is also a member of Global
Unions: http://www.global-unions.org 
 
For more information, please contact the ICFTU Press Department on +32 2
224 0232 or +32 476 62 10 18.