TUCP Statement at the Meeting with International Monetary Fund (IMF)

TUCP  Statement at the Meeting with International Monetary Fund (IMF)
held on 23 November 2009
at the IMF Conference Room, BSP, Pasay City, PHILIPPINES

We thank IMF for inviting the TUCP to this meeting.

We note the Communiqué of the International Monetary and Financial Committee of the Board of Governors of the IMF released on 04 October 2009 at its 2009 Annual Meetings of the IMF and World Bank in Istanbul, Turkey.

The Communiqué outlined Policies for Sustainable Recovery and Financial Stability. Among other things, it expresses the Committee’s:

• commitment to maintaining supportive fiscal, monetary, and financial sector policies until a durable recovery is secured, and stand ready to act further as needed to revive credit, recover lost jobs, and reverse setbacks in poverty reduction;
• o collective responsibility to avoid protectionism in all its forms;
• continuing international support for low-income countries’ efforts to implement their long-term development plans and to combat poverty, and to continue monitoring the impact of the crisis on these economies; and
• call on the Fund to assist the G-20 mutual assessment by developing a forward-looking analysis of whether policies are collectively consistent with more sustainable and balanced trajectories for the global economy.

We take this opportunity to convey our position and reiterate the ITUC and Global Unions Statement to the 2009 Annual Meetings of the IMF and World Bank.

1.PUT QUALITY JOBS CREATION AT THE CENTRE OF
IMF COUNTRY STRATEGIES AND PROGRAMMES FOR RECOVERY

The ILO estimates that stimulus policies have created or saved as many as 11 million jobs. The ILO expects that the global number of unemployed will be up to 61 million higher in 2009 than in the pre-recession year 2007.

The IMF’s latest growth forecast indicates that the recession may have hit bottom. But the IMF and all other forecasters also expect the number of jobless to keep increasing.

We urge the IMF to commit to consistent application of policies and programs that promote employment and wage-centred recovery, in conformity with the ILO Decent Work principles and the Global Jobs Pact  to fulfil its mandate to promote “high levels of employment and real income.”

We urge the IMF to support anti-cyclical recovery programmes in all countries, especially developing countries, and use its expanded lending capacity, by providing financial support over a longer period to countries that are currently in the midst of sharp economic decline.

The Pittsburgh G20 Summit in September emphasized “the importance of building an employment-oriented framework for future economic growth”.

2.RESPECT FOR CORE LABOR STANDARDS

We note that the IMF, along with the World Bank has already adopted some measures in support of the ILO’s core labour standards:

• freedom of association and the effective recognition of the right to collective bargaining,
• elimination of all forms of forced or compulsory labor,
• effective abolition of child labor, and
• elimination of discrimination in respect of employment and occupation

We are happy that IMF is including trade unions in its consultations, including today’s meeting.

However, we urge the IMF to set up an independent body, with the participation of trade unions, to monitor compliance by IMF-assisted programs with ILO fundamental principles and rights at work.

3.SOCIAL PROTECTION

Noting that over half of the world’s labour force has no social protection whatsoever, “the expansion of social protection coverage has to be a priority to mitigate the impact of the recession” (Ryder, 2009).

We urge the IMF to increase resource allocation towards assisting recovery of low-income countries like the Philippines, which face increases in extreme poverty because of continued and impending high oil and food prices, as well as the lingering impact of the global financial and economic crisis.

We also urge IMF to refrain from making recommendations which will serve to disturb social protection measures already in place in the Philippines.

4.REBALANCING OF THE GLOBAL ECONOMY –ELIMINATION OF HUGE TRADE DEFICITS AND SURPLUSES

A. We express agreement with regards IMF’s new mandate to monitor the consistency of countries’ policies with a “rebalancing” of the global economy (elimination of huge trade deficits and surpluses). However, we invite the IMF to address the root causes of global imbalances, among which is the burgeoning inequality that has taken place in many countries over many years.

The IMF has called on large trade surplus countries in Asia to increase their domestic demand base as part of the global rebalancing effort. “We believe that that won’t happen if these same countries keep wages artificially low and provide insufficient social protection by prohibiting free trade unions that could negotiate higher wages and better working conditions and campaign for adequate pensions and health protection.”

B. IMF has aired concern over the Philippine government budget deficit.

The global crisis has reduced economic activity in the Philippines, in almost all fronts, except overseas workers’ remittances.

In addition, two disastrous typhoons have resulted in close to P40 billion damage in infrastructure and agriculture.

We hope IMF doesn’t exert undue pressure on the Philippine government to reach budgetary balance much quicker than anticipated in 2013.

Such anti-stimulus pressure will further postpone the recovery of employment and incomes in the Philippines.