Responding To Global Crises: Role Of G8 Leadership

[SEE ALSO: G8 LEADERS SUMMIT 2008 - SCOOP FULL COVERAGE]

Responding To The Global Crises: The Role Of G8 Leadership

Trade Union Statement to G8 Hokkaido Toyako Summit
July 2008

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Contents

I. EXECUTIVE SUMMARY (§1-7)

II. RESPONDING TO THE UNFOLDING ECONOMIC AND FINANCIAL CRISIS

* Economic recovery measures that support decent work (§8-17)

* Regulating financial markets: the labour dimension (§18-20)

* Regulating Sovereign Wealth Funds (§21-22)

III. PUTTING FAIR DISTRIBUTION AT THE HEART OF POLICY (§23-30)

IV. DELIVERING PROMISES TO DEVELOPING COUNTRIES

* The G8 must fulfil promises (§31-33)

* Responding to the humanitarian crisis of rising food prices (§34-36)

* Development and decent work (§37-40)

* Education: delivering on G8 commitments (§41-43)

* Linking poverty reduction and public health strategies (§44-50)

V. BUILDING THE SOCIAL DIMENSION OF GLOBALISATION (§51-52)

* Corporate accountability and the OECD Guidelines for MNEs (§53-58)

* The Heiligendamm process (§59)

I. Executive summary

1. The crucial issues on the G8 Summit agenda – climate change, development and Africa – remain central for the Global Labour movement which insists that promises made in the context of the G8 must be followed up especially when so many governments are not on track to meet past commitments.

2. However the G8 Leaders are meeting as the impact on the global economy of the financial crisis that spread from the US credit and mortgage markets is still emerging. It is all too clear that the United States is facing the most serious financial crisis since the 1930s, a crisis that is now dragging the economy into recession and slowing growth globally. The ILO has warned that economic turbulence linked to the financial crisis will lead to unacceptable increases in unemployment and aggravate the deficiency of decent work. This situation is compounded by the unprecedented rise in fuel and commodity prices and the resulting food crisis in developing countries.

3. G8 leadership is necessary to bring about an effective response by global governance institutions to these interrelated crises. Unions have called for global action by finance ministers and central bankers that goes beyond the steps already taken. Unions are demanding a coordinated government response to the crisis including monetary easing backed by fiscal policy, a call that has been taken up by the IMF. The G8 Leaders must ensure that their economic, finance and labour ministers take action in coordination with central banks to halt the contagion and ensure that measures taken have a specific focus on raising the quality and quantity of jobs, as well as addressing the lack of transparency and effective regulation of global capital markets.

4. In the US and some major G8 economies, the economic downturn begins with median wages still below their pre-recession levels. Wage stagnation and lack of purchasing power for working families is both a result of damaging policies and itself a major factor behind the fall in household savings and the emergence of unsustainable debt that led to the mortgage crisis. Financial trade union advisory committee to the organisation for economic cooperation and development Commission syndicale consultative auprès de l’organisation de coopération et de développement économiques Page 2 deregulation allowed creditors to promote borrowing against home equity as a substitute for income. The long-term decline of wages as a share of national income and the growth of inequality within wages have become characteristic features of global growth. Financial bubbles in asset prices, stimulated by excessive leverage and lax rules, substituted for sustainable growth based on shared earnings.

5. Falling wage shares and growing inequality extends beyond the G8 countries and although forecasts for developing and emerging economies are stronger than those for the G8 the worsening economic situation will add to the deficit of decent work identified by the ILO. Moreover, the explosion in food prices over the past year – increases of 57% according to the UN – adds a new urgency to addressing the development agenda at the G8 summit. The human cost is being seen by the growth in world hunger and has now spilled over into food riots in the Caribbean and across Africa. G8 leaders must both agree on emergency responses including action to counter speculative actions in food markets and expansion of emergency support to the poorest together with more medium-term action to expand sustainable food production and reform world trade. It is essential that the Doha Development Agenda actually delivers economic and social development. Beyond this, G8 governments must use the summits to identify what must be done so that the commitments made in the Gleneagles summit to increase development assistance and to meet the Millennium Development Goals are lived up to.

6. Turning the challenges of countering climate change into an opportunity for job creation and sustainable development must be at the heart of the G8 discussions. The creation of green jobs can be both a partial solution to economic problems and a way of advancing action to counter climate change. The G8 must design and engage mechanisms for consultation and joint action with the Social Partners on national climate change strategies. They must also ensure the transfer of resources and clean technologies to developing countries.

7. In summary, we call on the G8 leaders to use their discussions to ensure: Coordinated government a * ction to offset the negative employment effects of the global financial crisis and support decent work (§8- 17);

* Effective regulation of financial markets, including Private Equity and Sovereign Wealth Funds (§18-22);

* Action to combat growing inequality including the promotion of “equity audits” in all relevant areas of government policy (§23-30); * Emergency action to counter hunger and poverty sparked by soaring food prices (§31-36);

* The fulfilling of the Millennium Development Goals through the creation of decent work, meeting commitments for development assistance and stepping up action on education and public health including the provision of universal access to treatment for those with HIV/AIDS (§37-50);

* Building on advances made at G8 meetings in 2007 on the social dimension of globalisation and the refining of an effective approach to corporate accountability and social responsibility (§51-58);

* Effective trade union involvement in the Heiligendamm Process (§59);

* Action to ensure global coherence in the attenuation of climate change and development of a just transition agenda for “green jobs” (§60-69);

* Strengthening of multilateral nuclear disarmament and non proliferation as part of the move toward the abolition of nuclear weapons (§70-72).

--SNIP--

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ENDS

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