29 April, 2009After years of strong criticism by trade unions, the World Bank has finally instructed its staff to stop using the labour indicators of its "Doing Business" flagship publication that gives higher rating to countries with the lowest workers' protection.
GLOBAL: After years of strong criticism by trade unions, the World Bank has finally instructed its staff to stop using the labour indicators of its "Doing Business" flagship publication that gives higher rating to countries with the lowest workers' protection. These have been used to push developing countries to adopt strict labour market deregulation policies as recipe for development and conditions for eligibility for loans and grants.
At a time of global crisis, with the institutions of finance being severely criticised as part of the causes of the present problems that hit most severely workers in all countries of the South and the North, the World Bank is making a significant move that, if concretely translated quickly and effectively in its policy recommendations, can mark an important change with positive effects on employment policies in developing countries.
The World Bank communiqué issued on April 27 stresses the importance of "development goals" such as "social safety nets to shield vulnerable parts of society from intolerable risk and protection of rights for workers and households as well as for firms".
The Bank is also scaling up its work on social safety nets, on "issues of access to benefits such as unemployment insurance and social security".
With regard to the Doing Business indicators, the Bank will adjust the scoring in its annual report "regarding provisions for fixed term workers and standards for severance payment, mandatory days of rest and night work and holidays, and minimum wage levels, in order to accord favourable scores to worker protection policies that comply with the letter and spirit of the relevant ILO Conventions, recognizing that well-designed worker protections are of benefit to the society as a whole".
Furthermore "a guidance note will be issued clarifying that the indicators do not represent World Bank policy and should not be used as a basis for policy advice or in any country program documents that outline or evaluate the development strategy or assistance program for a recipient country. The note will emphasize the importance of regulatory approaches that facilitate the creation of more formal sector jobs with adequate safeguards for employees' rights and that guard against the shifting of risk from firms to workers and low-income families.....We will convene a working group including representatives from the ILO, as the international standard setting body, trade unions, businesses, academics and legal experts.....to advice on revising the EWI and on the establishment of a new worker protection indicator.......and on labour market and employment protection issues -- with a view to creating regulations that help build robust jobs with adequate protection in the formal sector that can withstand future crises. The development of a new worker protection indicator (WPI).......could cover such matters as how a country is adhering to core labour standards and using law, regulation and other instruments of government to ensure that workers are adequately protected, including in the event of unemployment".
The International Metalworkers Federation will actively monitor, together with the other global unions, the translation of these welcome developments into practice.