I had the pleasure of addressing the 2nd World Congress of the International Trade Union Confederation (ITUC) in Vancouver a couple of weeks ago, and participating in a panel debate. I also met privately with some key union leaders.
For me, three main points emerged.
First, I was confirmed in my belief that, for the IMF, our interaction with the labor movement is extremely valuable. We make it a point to meet with unions, including in the context of our lending programs. Over the past few years, I have personally met international trade union leaders four times -- on the eve of important G-20 meetings -- as well as with individual union leaders. So the labor movement has a lot of influence on the way we work -- even if they do not always think so.
As an example of how the labor movement has influenced our thinking, I mentioned in Vancouver our strong support for the fiscal stimulus back in 2008, especially geared toward measures that would create jobs.
We also talked about the IMF's more recent approach to country lending programs -- which has changed in a number of important ways. For a start, we understand the importance of setting realistic targets for reducing deficits. A target that demands too much too soon can damage the economy; it can also damage prospects for success.
In our recent lending programs too, we have been pushing for what I call "social conditionality"--specific measures to protect the most vulnerable from the tough medicine that is often needed.
It is also important to share the burden of adjustment equitably -- as a country has a far better chance of pulling through a crisis if there is a sense of fairness in the program and a spirit of national solidarity.
The second message that came out in Vancouver was that the labor movement has a major role to play in supporting continued economic cooperation across the world. Collaboration is really the great legacy of this crisis, as countries came together to face common problems with common solutions. Because of it, we avoided a second Great Depression. Now more than ever, the world needs a renewed unity of purpose. The labor movement needs to keep pressing this point -- as do we at the IMF.
What does cooperation mean in concrete terms? Well, in the IMF's analysis for G-20 leaders in Toronto, we showed that with even greater policy cooperation, world growth could be boosted by 2½ percentage points over five years -- creating 30 million new jobs.
To get there, all countries need to do their bit. Fiscal consolidation in advanced countries is unavoidable. They need to put credible fiscal adjustment plans in place now, mostly starting in 2011, as the recovery is still fragile. At the same time, economies with surpluses need to boost internal demand, by spending on social safety nets, improving infrastructure, and allowing exchange rate flexibility.
Fundamentally, growth is the answer -- for jobs, for debt sustainability. That means unlocking productivity potential, innovating in areas like "green technology", and making sure that all who want jobs can find jobs.
Financial sector reform is also crucial -- and on this issue too, I believe we are on the same page as the labor movement. Excessive risk-taking -- often fueled by greed -- threatened the entire world economy and pushed millions into unemployment and poverty. We need to put the financial sector back in the service of the productive economy. This is why we support tougher and better regulation, especially to build capital firewalls against future crises. We also think that financial sector taxation can help reduce the likelihood and cost of future crises. Here, we have some differences with the ITUC -- they support a financial transactions tax while we prefer a tax on profits and remuneration. But while we may differ on the means, we are united by the common goal of ensuring a fair and substantial contribution from the financial sector.
In fact, I believe the IMF and the labor movement share a number of important goals -- and this was my third take-away in Vancouver. The goal of the IMF is global macroeconomic and financial stability. This is ultimately the best guarantee of steady employment growth and job security. But it's more than that.
The IMF was founded after the Second World War, and our founders were determined never again to repeat the mistakes of the past -- an economic nationalism that led to devastating war. Today, our overarching goal is bringing about better relations between countries, avoiding the economic roots of instability, social unrest, and conflict.
So while the IMF and the labor movement might have different views on different topics, our goals are ultimately the same -- standing against narrow domestic interests, against nationalism, against war. And standing for better living standards for all, and for peace.
From iMFdirect blog.
This is an extended "olive branch", an indication that Capital knows it is losing.
Not in the US, but about everywhere else: Europe, China, India, Latin America.
All socialist by US standards.
Capitalism and Milton Friedman are losing to "statism".
that means against the concept that a nation should have the right to 'utter' its own currency and credit.
The IMF is nothing more then a tool of the imperial monetary system that should be done away with because it has turned most of the planet into a 3rd word disaster and it's hopelessly bankrupt.
How is it fair to allow Wall Street/City of London to control the bond market thus controling the value of every nation's currency, while at the same time controling the printing presses of the world's reserve currency?
How is it fair that Western countries keep their grip on patents that are 50-to-100 years old so nations in Latin America and Africa cannot use them, without paying a royalty, to build their factories and infrastructure to become truly self-sufficient?
Why is it not illegal to make profits off weapons sales so there's no incentive to sell weapons to 3rd world countries or start conflicts to profit off both sides?
Why is Africa and most of Latin America forbiden to use of peaceful and latest thermo-nuclear technologies, that burn its own waste so it doesn't harm the environment, like Prometheus Bound, in Greek mythology, witholding fire from man?
Let's face it, the IMF is to ensure that banksters can get away with loan-sharking to poor people and then forcing them to give up what they have through immoral privatization schemes.
Meanwhile, on the ground, their bourgeois policies, or maybe I will give them the benefit of the doubt and say- their idealistic intentions are wreaking havoc on not only the diversity of culture etc etc..but has led to the introduction of some cultures who have NO desire to integrate and instead have brought much fear, destruction, and chaos (etc) into their new host country.
Forcing this nationalistic agenda sometimes feels more like they are putting a jihadist with an oozie, in a car full of scantily clad Christian/Jewish women who are driving themselves to college and then hoping that it will all work out because the jihadist is now in "our" country.
I think it would be more prudent for us to leave the "cultures" alone and stop forcing this agenda of eliminating nationalism. Until all cultures learn how to respect all members of their society first - we cannot ask them to learn to respect us first; the former, ALWAYS follows the later -otherwise we are inviting a host of dysfunctional people to the party - and simply, that's NO fun!
For themselves, of course.
It won't. Not protecting our workers is what the rest of the World would like us to do.
I am not a fan of the IMF, but your statement needed a response to illuminate the contra of your position.
"I mentioned in Vancouver our strong support for the fiscal stimulus back in 2008, especially geared toward measures that would create jobs." Yet, the banksters got all the money, didn't they?
"In our recent lending programs too, we have been pushing for what I call "social conditionality"--specific measures to protect the most vulnerable from the tough medicine that is often needed." Would the most "vulnerable" to be protected happen also to be those responsible for the mess: governments around the world?
"Collaboration is really the great legacy of this crisis, as countries came together to face common problems with common solutions." World-wide wage freezes, perhaps?
I hear what you're saying, I just don't trust a word of it.
Do they really think anyone is buying this BS anymore?
After decades of a near-perfect record of what is effectively predatory lending, no-one is about to believe that the IMF causes so much human suffering by mistake.
produce 30 million jobs sure in third world nations at low wages and dragging our economy down and our standard of living down.
Tariffs and fees must be restored NAFTA and all other free trade agreements revoked. You one world government stinks as it will require our living standards here in the U.S. to fall.
Down with the IMF and down with the Federal Reserve. Bankers are running the world not our chosen politicians . While we are at it shut down the world bank also.
Are all of the "progressives" out there starting to see that Obama is progressing the IMF's American agrenda onto individuals and small businesses right into a third world standard of living? He's given control over the banks to the people at the FED (a private bank) that caused the problem in the first place. What has Obama actually done to help the average working American? Obama works for the same IMF big interests that many of you scream at the Republicans for. Neither party is serving the people. They serve big corporations and money it takes to keep them in power, and this is the Marxist-Leninist strategy. It doesn't help the average person, it only tries to make you believe that it does. Vladamir Lenin once said "a lie told often enough becomes the truth" and the elitists think we're all what he termed, the "useful idiots" for continuing to allow it.
In EVERY case where the IMF has ruled the roost in a developing country (EVERY case) it has resulted in the creation of a permanent underclass of desperate poverty-stricken serfs and a VERY few rich(er) bastard robber barons. The IMF needs to be dissolved and those who work for it jailed for crimes against humanity (and all assets seized and distributed to the peoples they have helped rape and pillage).
If this person's views toward labor are supported, the US labor movement and the wages and benefits of unionized professionals and labor in the US are doomed to fall.
Wouldn’t that sentence suggest that a “unity of purpose†once existed. But has unfortunately been misplaced? If so, what exactly would that unity of purpose be? And where did you last see it?
“Fundamentally, growth is the answerâ€
Even a hog is sensible enough to know when to stop force-feeding itself. Maybe it realises that the ultimate and inevitable outcome of unremitting growth, is catastrophic detonation.
“steady employment growth and job security. But it's more than that.â€
Its humanity itself, ensuring the survival of its own species?