IMF-World Bank Spring Meetings: Time for a democratic reform of global institutions

The ITUC calls for a major democratic reform of the international financial architecture as a key demand in its For Democracy campaign, as the International Monetary Fund (IMF) and the World Bank hold their spring meetings.

11-04-2024

The ITUC calls for a major democratic reform of the international financial architecture as a key demand in its For Democracy campaign, as the International Monetary Fund (IMF) and the World Bank hold their spring meetings.

Across the world this month, trade unions focus on the fight For Democracy in societies, which means much more than free-and-fair elections. Central to the For Democracy campaign is the New Social Contract which will guarantee workers climate-friendly, decent jobs, rights for all, minimum living wages, universal social protection, equality and inclusion. In support of the drive to rebuild democracy for the benefit of all, working people are signing this global petition demanding that International Financial Institutions (IFIs) change course and support governments to deliver a New Social Contract to workers.

The IFIs can also play a constructive role in the fight For Democracy at a global level by prioritising human rights, a just global financial system centred on a New Social Contract, equitable cooperation among nations and peaceful common security.

ITUC General Secretary Luc Triangle said: “Democracy starts in the workplace with fundamental trade union rights and continues in our societies with respect for basic freedoms, but these principles can be undermined at the highest levels of international governance when austerity and neoliberal policy dominate.

“The IFIs must also introduce democratic reforms to their structures to effectively address the growing crises of countries struggling under unpayable debts, the climate emergency and a precarious global economy that is rigged to benefit the rich.

“Despite talk within the IFI of new directions and new approaches, we see frustratingly similar results. In practice, their policy advice frequently undermines decent work, social protection, good governance and democracy.”

In a pivotal year for the democratic legitimacy of global governance, the Global Unions have published a statement calling for reform of the IFIs, including:

•  A shift away from policies that undermine job quality to address major transformations such as climate change and the digital transition. Without reform, the statement says, “these transformations will further divide the world between those who benefit from new technologies and greater productivity and those that see their livelihoods destroyed with no replacement nor hope on the horizon.”
•  Resolution of, and relief from, the worsening debt crisis. Workers continue to be harmed by the international financial system’s failure to resolve the debt crisis, as countries must submit to austerity measures, including social spending cuts and privatisation in exchange for bailout loans. The statement describes existing policy as a “punitive approach [that] risks a lost decade, jeopardising the Sustainable Development Goals and democratic legitimacy of development finance.”

However, there is still opportunity to change course. The upcoming IDA21 replenishment and the review of the International Finance Corporation’s sustainability framework offers the World Bank a chance to promote decent work, uphold and implement labour standards and provide vital concessional financing.

Luc Triangle concluded: “In a time of underinvestment, conflict and rising anti-democratic extremism, we urge the IFIs to genuinely engage with the global labour movement as the world’s largest democratic force, and support workers’ call for a New Social Contract.

“As leaders in the international financial system with resources and a global development mandate, the IMF and the World Bank must change to fulfil their commitment to equitable and sustainable development through decent work.”