[DEBATE] : (Fwd) Cosatu on G20 - not as radical as times require
pbond at mail.ngo.za
Sat Apr 4 05:06:25 BST 2009
(A shame that while containing lots of insightful points, there are also
corporatist influences and an overall 'cautious welcome' in this
important statement. Most progressive civ soc forces, as well as Chavez
and Morales, are issuing really stinging critiques and renunciations of
the G20's right to decide anything at all. And I sense the paragraph "On
protectionism, we regret..." is a bit convoluted. With trade slowing
down so much anyhow, this is precisely the time Cosatu could push for a
reorientation of the economy to meet domestic needs. The Chinese import
quotas negotiated in 2006 are now fini, and more thousands of jobs will
be lost to a fresh import wave. The only way that protectionism in these
times can be justified is if it is part of a radical economic
reconstruction, as Venezuela has tried to do, with new cottage
industries and worker-managed plants. But such a strategy can only work
if protected from the voracious exporters, so desperate now. A crisis is
worth having if it can lead to a shake-up in power relations and a major
change in the balance of forces, which in theory is a possibility in SA
with Cosatu so influential in the ANC. The heavy hands of Manuel and
Mboweni, and the dead weight of Mbeki and Erwin, remain crucial factors
in the balance of power, it seems.)
COSATU response to the G20 2 April 2009 London declaration
The Congress of South African Trade Unions broadly welcomes the G20
London Summit Declaration but rejects some of its conclusions.
COSATU regrets that the G20 meeting did not clearly acknowledge that the
global economic crisis has been caused by the policies of the Washington
Consensus, which propagated a ‘one size fits all’ economic model based
on withdrawal of the state from the economy, emphasis on market
fundamentalism, deregulation, privatisation, trade liberalisation, cuts
in government spending and high interest rates, implemented through
lending conditions attached to IMF and World Bank loans for poor
countries. This policy led to gross imbalances in the global economic
system, overproduction and over-accumulation, and non-regulation of the
financial services sector.
This resulted in rising unemployment, income inequality and poverty,
stagnating wages, cuts in social protection, erosion of workers’ rights,
and increased insecure work. The International labour Organisation (ILO)
estimates that 50 million jobs could be lost and 200 million people
could sink into poverty as a result of the current economic crisis.
In South Africa, contrary to the local proponents of the Washington
consensus, workers are being laid off or put on short time, and wages
are being reduced; there is a decline in exports, a fall in commodity
prices and decline in manufacturing and mining sectors.
COSATU therefore rejects the G20’s reaffirmation of a free market policy
to address the international crisis, which is precisely the result of
such free market policies.
We had expected that there would be a paradigm shift in policy away from
the Washington Consensus. The real economy, decent work, and poverty
reduction were treated as marginal to the crisis, with the main focus on
finance issues. The G20 should have focused more on social issues, and
particularly on jobs. We are very unhappy that the Summit did not adopt
the Global Jobs Pact on the social dimensions and employment impact of
the economic crisis, as proposed at the ILO.
The G20 should have followed the South African example and called on
governments, business, labour and the community to work together to
protect the poor, the working class and vulnerable groups from the
effects of the crisis through industrial, fiscal and social measures.
However, we commend the G20’s position on following social measures:
* Its acknowledgement that the crisis unfairly affects the poor and the
vulnerable in poor countries and a need for a collective responsibility
to mitigate the effects of the crisis on the poor.
* An increase in resources for social protection for the poorest
countries and investment in long-term food security, and increased
resource allocation of more than $1trillion to assist emerging markets
and poor countries,
* The UN to monitor the impact of the crisis on the poorest and the
* A commitment to meet Millennium Development Goals and implement
pledges for aid as per the Gleneagles commitments, and more development
* Support for employment by investing in education and training and
through active labour policies focusing on the most vulnerable and the
role of ILO to assess actions taken and those required for the future,
* An undertaking to reach an agreement on the UN climate change
conference in Copenhagen in December 2009.
Macroeconomic policies should address world trade imbalances which have
resulted in inequality, poverty and unemployment. They should deal with
equity and redistribution of wealth to close the widening income
inequality, eradicate poverty and achieve the MDG goals to halve poverty
and unemployment by 2014.
COSATU calls for a significant revision of the world’s social
architecture to place workers’ rights and development at the absolute
centre of the new global agenda.
Other social measures to address the impact of the crisis on the poor,
which should be at heart of the stimulus packages, should include:
* Commitment by all ILO member states to ratify ILO convention and
comply with all labour standards. We are disappointed there was no
express provision for adoption of the ILO decent work agenda. Decent
work is the foundation of the fight against poverty and inequality and
it should be at the cornerstone of the responses to the economic crisis.
* Implementation of the ILO Declaration on social justice for a fair
* Adoption of the Global Jobs Pact on social dimensions and employment
impact of the economic crisis, as proposed at the ILO.
* Measure to curb speculation in staple food prices,
* Measures to avert unemployment, wage losses, and to provide income
* Support to companies that are temporarily affected by credit
difficulties in order to protect jobs.
* Putting more money into the pockets of the poor and working class in
order to stimulate the economy. This would boost growth, as the poor are
more likely to spend their cash quickly and thereby stimulate the
economy. This can be done through increased benefits, direct job
creation schemes such as investment in public infrastructure, and tax
COSATU agrees that countries should strengthen financial supervision and
regulation among others:
* Public control, oversight and regulation of all financial products and
transactions in particular, hedge funds
* Introduction of measures to address executive pay and bonuses that are
behind much of the risky investments and regulation of remuneration
schemes by law.
* Introduction of laws to regulate corporate social responsibility of firms
* Stopping the race to the bottom between tax jurisdictions which is
eroding tax revenue for most countries and introduce sanctions against
non cooperative jurisdictions including tax havens.
* Requiring of oversight and registration of credit rating agencies
which are responsible for hiding some of the risks associated with the
The G20 Summit called on central banks to lower their interest rates, so
that government investment in public infrastructure can be financed at a
low interest rate cost. We demand that our SARB take heed of the G20’s
We welcome the commitments to reform the IMF, in particular for
appointments of head of international financial institutions on merit.
We regret that there was no commitment to reflect developmental
objectives including the social mandate of decent work which means
increasing employment and improving the quality thereof in the IMF mandate.
There should have been commitments to abolish lending requirements for
the IMF and WB that leave developing countries with little or no policy
space to develop their economies. The G20 should address the US veto
powers and representation of the developing countries on the IMF board.
COSATU deeply regrets that the IMF has been given an enhanced role in
coordinating the global financial reform. This organisation has been
responsible for actively pursuing policies which have contributed to the
current crisis, and indeed is still pursuing them during the crisis. Its
policy mandate, governance structures and policies must be transformed.
An unreformed IMF could aggravate rather than resolve the crisis.
Otherwise the coordination should be done by the UN.
We regret that the Financial Stability Board, which is meant to provide
early warning on macroeconomic and financial risks in cooperation with
IMF, is not representative of the poor countries; only one regional
organization, the EC is represented. Other regional organisations such
as the African Union and Association of South East Asian Nations (ASEAN)
countries should have a place in the G20 just like the European Commission.
On protectionism, we regret that the G20 did not reprimand the rich
countries for breaching their November 2008 Washington declaration not
to impose protectionist measures. Since Nov 2008, 17 of the G20
countries have imposed trade-restricting measures, through among others,
export subsidies in the form of fiscal measures.
Poor countries should not accept calls to avoid protectionism, which are
in fact designed to stop poor countries from using targeted trade
measures to protect their industries from the crisis, whilst the rich
countries are using fiscal measures to protect their industries.
We regret that the G20 did not reaffirm the mandate of the Doha round to
put the interests of developing countries at the heart of its programme.
We still demand that trade policy negotiations in the WTO must be
developmental in character and Non-agricultural-market-access (NAMA)
provisions should not result in further trade liberalisation of markets
in developing countries and job losses.
The next G20 meeting should be convened within 6 months to enhance
coordination and a common approach to the crisis. COSATU demands that
the trade unions should be directly represented at that Summit.
The G20 should ensure that there is a paradigm shift in policy making
away from an economic model which focus on one option namely of opening
markets and deregulation to a model which focuses on decent work,
economic, environmental and social sustainability, an economic model
that puts people first.
Patrick Craven (National Spokesperson)
Congress of South African Trade Unions
1-5 Leyds Cnr Biccard Streets
P.O. Box 1019
Tel: +27 11 339-4911/24
Fax: +27 11 339-5080/6940/ 086 603 9667
E-Mail: patrick at cosatu.org.za
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