Council of Europe welcomes World Bank change of course

24 June 2009

Council of Europe welcomes World Bank change of course

The Parliamentary Assembly of the Council of Europe (PACE) has commended the World Bank for a small but significant step in the direction of a fairer and more sustainable globalisation. An amendment to this effect proposed by SP Senator Tuur Elzinga to a resolution on the ‘challenges of the financial crisis for the global economic institutions’ was carried almost unanimously.

Senator Elzinga, who took the floor on behalf of the European United Left group, to which the SP is affiliated, supported the resolution, but stated his opinion that the mild criticism of the World Trade Organisation (WTO), the International Monetary Fund (IMF) and the World Bank could be sharpened.

Tuur Elzinga“Deregulation of the financial markets and the perverse bonuses in the banking sector, which have encouraged shareholders’ short-sighted interests, irresponsible risk-taking and greed, are the direct causes of the crisis. But underlying these are more structural problems, problems of a global economy which has been thrown badly out of balance: unsustainable differences of wealth and income which globally are growing ever wider, and rich countries which consume far more than they produce. In general terms, three decades of neoliberal policy, advocated and imposed by, amongst others, the WTO, IMF and World Bank, have enlarged these differences, exacerbated the economic imbalance and thereby not merely allowed speculative bubbles to continue to form, but in fact caused them. These economic and financial institutions are therefore in large part directly responsible for the present crisis.”

Elzinga concluded his contribution to the debate on a positive note, suggesting that the World Bank be congratulated for having taken a serious step in the right direction with its decision no longer to use, in its present form, the so-called “Employing Workers Indicator” in its important “Doing Business” report. This controversial indicator has been challenged for many years by the labour movement, on the grounds that it awards the highest mark to those countries which least respect workers’ rights. The indicator was in the past used repeatedly by the World Bank and IMF to pressure developing countries into deregulating their labour markets. The amendment welcoming this move by the World Bank was discussed this week in PACE, which went on to back it. “This means that the World Bank could now at last do what it was set up to do, support fair and sustainable development and encourage growth which also benefits the poor,” says Elzinga.

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