to create an economic development model that puts people, the environ- ment and the public interest first.
37 The ‘exit strategies’ currently under consideration by some G20 govern- ments, together with the IMF and the OECD12, establish as post-2010 priorities: privatising stakes in financial institutions; calibrating the with- drawal of monetary stimulus and the removal of public deficits, primarily through public expenditure reductions; and shifts to consumption and property taxation13. This response to the risk of falling growth rates simply re-prescribes the structural policy measures of the past decades – reduced employment protection, increased wage flexibilit , less ‘generous’ unem- ployment benefits and deregulation. This is despite the acknowledgement by both organisations that “the links between structural policies and growth are complex and generally not well known”. The perception that citizens and taxpayers are twice being asked meet the costs of the crisis – first in the initial financing of the bailouts and stimulus packages and then by bearing the cost of reduced collective rights to welfare and social security – are likely to prove to be politically unacceptable.
38 The new model must be based on balanced wage-led growth rather than financialisation and excessive profits. Policies must be designed to rebal- ance the economy: the financial and the real economy; the rights of labour and capital; the trade surplus and deficit countries; and industrialised and developing countries. Now is the time to push ahead with the adoption of broader indicators ‘beyond GDP’ that measure economic and societal progress. Governments must push forward with progressive fiscal reform in order to spread the costs of the crisis fairly and to provide a sustain- able solution to the growing public finance deficits. This would place the burden on the companies and executives who created the crisis in the first place, rather than on the workers, who would be the first to suffer under austerity plans in a context where unemployment rates may rise to 20% in some OECD countries.
39 More balanced growth must also involve the reform of the international economic institutions. Governments should take forward the outcomes of the ‘UN Conference at the Highest Level on the World Financial and Economic Crisis and its Impact on Development’. Trade unions need to play a full part in the new governance and advisory structures to inter- national organisations, using their institutional links to the OECD as a model. The ILO also needs to be assigned a central role.
IMF and OECD, Global Economy After the Crisis: Policies and Prospects over the Medium Term, May
OECD, Going for Growth, 2009.
40 The G20 must propose an expedited timeframe for the IMF and World Bank to undertake a long overdue revision of their governing structures. Both the IMF and World Bank must engage in governance reform that substantially increases the representation of developing countries in the institutions’ decision-making structures and that increases account- ability for IFI programmes. Global Unions support the proposal that developing countries achieve at least parity representation to indus- trialized countries at both the World Bank and IMF. The IFIs should improve their accountability by requiring that loans and conditions