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TUAC 131st Plenary discusses future economic strategies and asks when the wait for measures to restore sustainable growth and social justice is over?


“We have run out of options to exit the crisis”- a statement from the OECD Secretary General Ángel Gurría that shows that while societies continue to suffer from the impacts of the global crisis, political actions are falling short. On December 4, President Obama gave a speech about unsupportable levels of inequality in the United States - an issue that has been repeatedly evoked by trade unions. Delegates at the TUAC Plenary Session, held on December 10 at the OECD, recalled that they have warned of the social and economic costs of the austerity trap from the beginning of the crisis and have proposed alternative policy options. The latest example is the ETUC and DGB led European Investment Plan that calls for a break from austerity.

The TUAC Plenary discussed a set of central issues for the global trade union movement including the disturbing global economic outlook, the OECD Ministerial Meeting in 2014 and the organisation’s New Approaches to Economic Growth Project (NAEC), the Labour20 (L20) engagement and the Action Plan on Base Erosion and Profit Shifting (BEPS), long-term investments, and labour rights in Columbia and South Korea.

Participants drew attention to the social crisis that calls for action to achieve a sustainable and just economy as frustration and distrust in political systems grows. Austerity pushes states into a spiral of stagnant growth and low demand prompted by either the Troika doctrine or fears to loose one’s credit rating. The main message of the plenary: Reverse the lack of investments and in industrial policy coordination and take action against inequality through decisive policy initiatives.

Labour rights violations in South Korea & Colombia

The labour rights violations in both countries are alarming, and in the case of Korea show a significant regression from commitments made when joining the OECD in 1996 and since the end of the monitoring process in 2007. In light of the ongoing assassinations of trade unionists in Columbia, and the deregistration of the Korean Teachers Union (KTU) and denied registration of the Korean Government Employees Union (KGEU) in addition to further violations on their freedom of association, TUAC delegates are asking the OECD to focus on these developments in its current and future member states. It was also suggested that clear commitments to reduce the murders of trade unionists be included in the roadmap for Columbia’s accession to the OECD.

Long-term Investments: Opportunities & Challenges

The Plenary discussed the opportunities created with the new G20 Principles on Long Term Investment by Institutional Investors adopted at the Saint Petersburg Summit in September, which could facilitate the shift from short termist strategies towards greater direct investment in the real economy and in financing infrastructure by institutional investors (pension funds, insurance companies, sovereign wealth funds). However, important challenges remain. The increasing number of financial intermediaries between ultimate asset owners and invested assets – the “lengthening of the investment chain” – requires policymakers’ renewed attention to the financial industry’s transparency and accountability standards. Mobilizing private finance for infrastructure could also fuel a very detrimental agenda on public-private partnerships and implicitly weaken public services and administration, particularly in developing countries.

Economic Resilience on a ‘Social’ Footing

As the May 2014 OECD Ministerial Council Meeting and Forum theme will be on “resilient economies” this also has to link up to inclusive growth. One of the most pressing questions in the room was: What is effectively blocking measures against inequality or financial architecture reform and how can this be overcome? Participants in the OECD Ministerial Council Meeting will be confronted with broken societies, broken trust and broken economies as one delegate pointed out. Inequality and economic volatility will not go away by next May. TUAC affiliates therefore expressed their hope that the OECD NAEC project will bring some innovation into OECD economic recommendations and present new tools for measurement and policy design alike.

With its work on global value chains and Trade in Value Added (TiVA), the OECD is also in a good position to address the fact that international trade does not automatically lead to welfare for all with disasters as in Bangladesh as a frightening testament of a global race to the bottom. TUAC Global Union partners UNI and IndustriAll played decisive roles in the conclusion of the agreement on Work Safety Standards in the aftermath. As the Rana Plaza accident is symbolical of widespread neglect of workers’ concerns and rights, delegates demanded that working conditions in global production and services need to correspond to international standards, and wondered whether the OECD is ready to “go more social” and adopt a new approach on these and other issues.

New Paths towards Growth & Jobs at the G20

With regards to the L20, priorities for the future engagement within the G20 process, plans to track national commitments and further cooperation with the Business20 were discussed. In particular, the social dimension in the G20 process should be strengthened leading up to a Jobs and Growth Pact. Delegates also said that B20-L20 joint concerns on informal work, skills and lack of investments in infrastructure demonstrate to leaders that there is a broad consensus on the need for urgent policy action. Similarly, the BEPS Action Plan needs to go beyond stocktaking and provide concrete multilateral solutions as a next step. Also, a G20 Plan on Financial Sector reform did not take off as it was hoped for back in 2008/9 – it should thus be reintegrated as a main point in this year’s agenda.

Overall, the TUAC Plenary put emphasis on economic fairness and the need to accelerate sustainable recovery with concrete solutions, while considering social impacts of taxation, industrial and trade policies.