The IFIs and Labour Reform in Post Communist Economies

Abstract

Since 1999 the International Financial Institutions (IFIs) have sought to revise their policy approach to encourage participation, facilitation and dialogue with civil society organisations and trade unions. This Post Washington Consensus has been applied in transformation economies, where the IFIs have established labour market reform as a pre-condition for loans and grants. Such labour reforms have been deleterious to the interests of collective labour, and a continued source of contestation between unions, government, and the IFIs. This paper examines the reality of the new consensus framework with particular reference to the former Yugoslavia. Evidence is drawn from documents of the IFIs and from interviews with representatives of key union federations in the region. The article assesses the evidence against alternative theoretical frameworks from within political economy and international relations, and concludes that consensus is illusory, leaving unions consulted but then ignored.

Desde 1999 las Instituciones Financieras Internacionales (IFIs) buscaron la revisión del enfoque de sus políticas internas para reanimar la participación, facilitación y diálogo con las organizaciones de la sociedad civil y los sindicatos gremiales. Este Consenso Post Washington se ha aplicado a economías en transformación, en donde las IFIs han establecido una reforma de mercado laboral como un prerrequisito para préstamos y subvenciones. Tales reformas laborales han sido perjudiciales a los intereses de trabajo colectivo y una fuente continua de protesta entre los sindicatos, el gobierno y las IFIs. Este artículo examina la realidad del nuevo esquema del consenso con una referencia particular a la antigua Yugoslavia. Se ha extraído evidencia de documentos de las IFIs y de las entrevistas con representantes de las federaciones sindicales claves en la región. El artículo evalúa la evidencia contra los esquemas teóricos alternos dentro de la economía política y las relaciones internacionales, y concluye que el consenso es ilusorio, después de haber consultado a los sindicatos, pero luego dejándolos ignorados.

Keywords:

• International financial institutions
• trade unions
• Labour relations
• post Communism

Notes

See https://www.imf.org/external/pubs/ft/seminar/1999/reforms/index.htm.

Current estimates from the ILO show ‘… that in developing countries in 1997 around 534 million persons can be considered working poor. This was about the same number as in 1986 (536 million). Thus, in 1997 around 25% of the employed labour force in developing countries were working poor, the great majority of whom were living in low-income countries. The dynamics of the working poor population show that their numbers have increased in low-income countries, but decreased in middle-income countries. There seems to be also a polarization between those low-income countries where the number of working poor are declining and those where they are increasing thus exacerbating world inequalities’ (Employment Analysis—poverty, income and the working poor, Geneva: ILO, 2005).

Since November 2006 renamed as the International Trade Union Confederation (ITUC).

Time Series Measurement of poverty levels can be found at the UN statistical database (http://millenniumindicators.un.org).

The OECD Economic Outlook 2005 (Paris: OECD) states ‘On current trends, however, OECD countries will still have around 36 million job-seekers in 2006 (or 6.4% of the labour force), compared with 37 million in 2004 (or 6.7% of the labour force): about 35% of people of working age are without a job, and there are few signs of a significant improvement in the next two years’. The ILO in its report A Fair Globalisation—Creating Opportunities for All (Geneva: ILO, 2005) stated that ‘In 2003, official figures for global unemployment reached a record high of over 185 million people.’

The brief of the IMF does not go as far as social protection and focuses on macro-economic policies. This is in contrast to the micro-orientation and poverty reduction brief of the World Bank.

Referring to the development of the World Social Forum the document suggests that: ‘There was an overall shift toward more peaceful engagement in the wake of the violence which occurred in 2000 and 2001 at the international meetings in Prague, Quebec, and Genoa, and particularly after the September 11, 2001 terrorist attacks, but experience shows that some groups remain committed to using obstructive tactics or even violence. With these more militant groups, there is little basis for the Bank to expect that constructive relations are possible or desirable. However, the evolution of the World Social Forum (WSF) and other civil society forums suggest that even some of the more radical social movements may be maturing, recognizing the need to move beyond using protest as an advocacy tool and engaging policy makers in serious debate about policy alternatives.’ (Ibid. p. xi).

See http://www.eurodad.org and Eurodad 2003 PRGF Matrix and Analysis, Brussels: Eurodad, 2004.

The IFIs' Role in Implementing Global Commitments to Achieve the Millennium Development Goals, Statement by Global Unions to the 2005 Annual Meetings of the IMF and World Bank (ICFTU, Washington, 24–25 September 2005).

See the World Bank/IFC site at http://www.doingbusiness.org/.

See Stability Pact for South Eastern Europe Annual Report 2004, http://www.stabilitypact.org/rt/041122annualreport.pdf.

See http://www.icftu.org/list.asp?Language=EN&Order=Date&Type=CEETURBulletin&Area=CEEU.

Quoted in http://www.icftu.org/list.asp?Language=EN&Order=Date&Type=CEETURBulletin&Area=CEEU.

‘Central and Eastern European Workers Struggle to Hold Their Ground in Hard Economic Times’, an Interview with Jasna Petrovic, Multinational Monitor, May 2002, available on the web at http://multinationalmonitor.org/mm2002/02may/may02interviewpetrovic.html

Quoted in interview with author by Slavko Lukovic, General Secretary of Nezavisnost, June 2004.

The union was formed as an independent oppositionist union during the Milosevic period.

Author's interview notes, June 2004.

Mid-term Development Strategy of Bosnia and Herzegovina (PRSP) 2004–2007, Sarajevo: Bosnia and Herzegovina Council of Ministers of BiH, Government of Federation of Bosnia and Herzegovina, Government of Republika Srpska, Office of the BiH Coordinator for PRP, April 2004.

SCF (UK) submission to PRSP.

Author's interview notes with ICFTU office in Sarajevo.

Mid-term Development Strategy of Bosnia and Herzegovina (PRSP) 2004–2007, Sarajevo: Bosnia and Herzegovina Council of Ministers of BiH, Government of Federation of Bosnia and Herzegovina, Government of Republika Srpska, Office of the BiH Coordinator for PRP, April 2004.

‘Employment and the Reduction of Poverty in Bosnia and Herzegovina Recommendations by the Unions of BiH’. 5 April 2005, Sarajevo: SSSBiH/SSRS/SBDBiH.