Speech of W.F.T.U. General Secretary
Com. George Mavrikos at

98th ILC Plenary Session
Geneva June 17th , Assembly Hall, Palais des Nations

a. The economic crisis: the realistic and
necessary targets.

Dear Mr President, Dear colleagues

On behalf of the World Federation of Trade Unions (W.F.T.U.) we believe that the worries, the thoughts and the anger of the world’s working class due to the widespread attack against its rights and achievements are fully justified. The capitalists and the capitalist governments use the economic crisis to remove rights of the popular layers.  As a solution to the economic and financial crisis, they encourage the strengthening of the monopolies and the banks with public, governmental money, while at the same moment, they reduce wages and pensions, they increase unemployment, they increase poverty. They close the way for a decent future for the young generations. They use as basic tools the privatizations, the blow of social security,  the black and undeclared work, the exploitation of migrants.

The rise of racist and neo-fascist parties in the recent elections for the European Parliament is a loud bell that nobody should ignore. The economic crisis leads the workers in mistaken ways. One more exemple is what happened last week in Peru where the government has killed 240 natives in the Amazon. The case is typical and shows what many people mean when talking about green development. To kick out the indigenous farmers from their land and to be exploited by monopolies. This is the modern capitalist world. Profits for the few, poverty for the peoples.

The World Federation of Trade Unions has undertaken several initiatives for the action of trade unions against the consequences of the economic
crisis. We organized an International Trade Union Conference in Portugal, a Conference in Nepal, in Belarus, in Cuba, in Nigeria, etc.

Our central proposals are:

* Drastic reduction of military expenses. * Increase of social spending on today’s social
needs.

* Support the living standards of workers

* Stop the privatizations

* Support of the self-employed and farmers.

We call upon all workers and all unions throughout the world to fight together for these goals which are both realistic and necessary.

b. The situation in Palestine and the Arab region.

Dear Colleagues

For years now the people of Palestine suffers from the attacks and threats of the Governments of Israel. And along with Palestine, Lebanon, the Syrian Golan, the people of Iraq, Sudan, Iran, are also targets of Israel. We all have a good reason to wonder : how far this aggression will go? For how many more years the army of Israel will kill children and women? Until when Israel will refuse the establishment of an independent Palestinian state?

The WFTU since its foundation until today is on the side of the Palestinian people. Alongside with the Arabs. Not with words but with action. And today we say that peoples can live peacefully.

All peoples must live in peace. A basic condition for this is the immediate withdrawl of all foreign troops from the Arab territories. To put an end to the occupation

c.The situation within the ILO

Dear representatives of the international trade union movement,

For the last three years, here, from this pontium, we firmly support that the ILO must implement both to its functions and organs, the UN principles, the principle of equality, of proportional representation, democracy and transparency. The lack of these characteristics, hurt first of all the ILO itself. The requests
we put are fair and realistic.They need to answer us after all: in the ILO Governing Body, is it fair for a trade union with 20,000 members to participate as Titular member and the ACFTU with 200 million members not to be a titular one? Is it realistic that a trade union with 70,000 members is amongst the Titular members
and the WFTU with 70 million members to be excluded? We wait for a reply. For an effective answer.

We will not stop until a fair and mutually acceptable solution is given. This would be in favour of workers, would be in favor of the international trade union movement and for the ILO.Draft

WFTU Paper for ILO Session

EFFECT OF ECONOMIC CRISIS – WFTU’s APPROACH

* The deep and broad jobs crisis leads
to worldwide Social Recession”- ILO

In his introduction to the Report on “Tackling the Global Job Crisis” the Director-General of ILO expresses concerns on the following elements.

# ” Millions of women and men have lost their jobs; business bankruptcies are growing exponentially, particularly among smaller enterprises. l Unemployment is expected to continue rising at least until end 2010, probably 2011.

# Poverty and informal employment will continue to rise as well, reversing recent gains, while middle classes are weakened.

# Meanwhile 45 million persons, mostly young women and men, will enter the labour market in 2009 and following years looking for their
first job.

# The International Monetary Fund (IMF) forecasts some recovery in global growth as of mid-2010, but this is conditional on the success of stimulus packages adopted by countries and on re-establishing a functioning financial sector. Both results are as yet uncertain.

# Evidence of past crises indicates that, even after economic growth returns, employment only recovers to pre-crisis levels with a lag of four to five years, on average. And we already had a decent work deficit before the crisis.

# When jobs are not available, demand for social protection increases significantly.

# Prolonged employment crises carry major risks for social and political stability.”

* Why & How the Crisis?

Capitalism has been moving towards the crisis for long time.

Large scale and fierce competition led to monopoly. When the big business found the return of the dollar dwindling and found itself compelled to find quick new source of profits, they demanded to remove all barriers and use government resources as milk cows. The demand is placed on the Governments ments.

Eventually, the major centres of capitalism found they had declining manufacturing base, capital was withdrawn from production and speculation grew. The last two decades have been period of speculation bubbles moving from dot.com frenzy to real estates, oil and cash crop. It is a major source of instability.

The unregulated, mindless market economy has once again got exposed. This is not just mismanagement of some companies/MNCs, but a problem embedded in the nature of capitalism itself. Private competition and greed have been the centre state, more aggressively in the last two decades. Freeing up the market through large scale de-regulation and privatisation has been the name of the game.

If we look at the Balance Sheet of the “Washington Consensus” for the last thirty years there have been fifteen crisises, including “1970-2007-124 banking crisis, an average of 3.4% per year; 1980- Latin America, US & S&Ls; 1990-Scandinavia, Japan, Asia; 2007-US sub prime and now global melt down which is more than the 1930 recession. The economic tremors in the 1970s knocked down “managed capitalism”. Recall the breakdown of fixed exchange rate regime, two oil price shocks, wayward government deficits, interest rate hikes, stagflation, global economic recession and the debt crisis.

It is loud and clear that capitalism has been failing humanity. The convergence of right-wing economics and right-wing policies to extol the virtues of the unregulated markets despised any form of Govt.intervention. The result is this crisis.

* ‘Financial Casino’:

In 2002 (Lietaer) it was said: “the money is determined by a global casino of unprecedented proportions, $2 Trillion are traded per day in foreign exchange markets, 100 times more than the trading volume of all the stock markets of the world combined. Only 2% of these foreign exchange transactions relate to the “real economy” reflecting the movement of real goods and services in the world and 98% are purely speculative. This global casino is triggering the foreign exchange crisis which has caused several shocks (as already noted). Unless some precautions are taken there is at least 50-50 chance that the next five or ten years will see a global money melt down, the only plausible way for global depression.”

Let us recall the wise men’s observation that “Fictitious Commodities” do not produce the food, the jobs, the clothes, the houses etc. “real commodities” that people need. Later, Insurance was available against defaults, known as “credit-default swaps” or “Insurance derivatives”. Analysts pointed out that insurance derivatives market exploded from $5 Trillion early in the 21st century to $650 Trillion in 2006-2007 or 10 times the size of all US corporate debts. It proved a “financial casino” in insurance derivatives.

* A case study of Africa:
The Communique on the impact of the global economic & financial crisis (dt. March 27-APO) expresses as follows: “We underline our deep concerns regarding the farreaching negative impact of the global economic and financial crisis on African economic growth and national development plans, balance of payments and national budgets, competitiveness, access to international public and private finance, and foreign direct investment. It has become clear that the crisis has already begun to negatively impact the important economic sectors in African countries, and its consequences have spread to production, exports, employment, investments, tourism, and remittances, among others, and have resulted in a deep decline in commodity prices. All African economies have registered deep decline in economic growth as a result of the crisis which was initiated in developed countries, and quickly spread across the globe to negatively impact developing countries particularly in Africa.”
The Responses:

(i) The Govt’s response:

The Govt’s response to the crisis in many countries is revealing two things

(1) Everything is being done to transfer the cost of crisis on to the back of the working people
(2) The re-direction of Govt. resources to massive Corporate Welfare only meant a wave of serious belt tightening, less provision for a range of services that are important for the peoples standard of living and quality of life. The owners of Corporations do not foot the bill. It is again proved that markets cannot solve the problem. Hence, Govt’s intervention was sought in the form of huge bail out packages. The story of such bailouts in US, Europe and elsewhere are already well known.

(ii) The G20 Response:

In order to address the global financial meltdown, the Group 20 has committed to “make available an additional $850 billion of resources through the global financial
resources, the main vehicle will be the IMF (International Monetary Fund), to support growth in emerging market,” Such a blank cheque to IMF, whose
conditionalties in many cases stifled growth and social protection through high interest rates; cuts in productive investments including health & educations and set the
stage for a new external debt crisis, cannot be agreed at all.

The G20 is a shield for those who are responsible, the G7. In order to regulate the global economy the world does not need another ‘Washington Consensus’; The power
of the IMF, WB and WTO to be curbed. The IMF loans are calling exactly the opposite of stimulus the US practicing for itself. IMF has been pushing high interest
rates, less government spending and privatisation. “Decent Work” of ILO with its 4 pillars is not in the IMF agenda. These financial institutions talk about “Financial
Socialism – Socialising the loses & Privatising the profits.”

Our Response:

We neither agree with the above Govt’s responses, nor that of G20. The obvious answer to the failure of capitalism, is to put
into place a stable system of Government with Social ownership, control & planning. Our considered views, amongst the various
aspects, include the following:
1. The Global economic & financial crisis underscores the fundamental flaws of capitalism and the urgent need for radical transformation towards a new economic order built on certain principles, such as, economic justice and equitable development, peoples participation in the shaping of economic policy, food and energy sovereignty, universal access to
essential services and public utilities, protection and promotion of all human rights, in particular right to food, air, water, right of workers, rural & urban communities, indigenous people, women & children.

2. Using industrial policy to strengthen manufacturing sector and creating purchasing power for a vibrant economy, where ‘living wage’ is ensured.

3. Protection of jobs; labour and migrant workers in accordance with ILO core labour standards and based on the definition of decent work (contents of work, nature of jobs, security & representation), creation and facilitation of alternate employment and in the process advance other development goals; prioritation of Govt. assistance to small & medium scale sector and assistance to big industries should ensure employment of a significant number of workers.

4. Re-orient budgets to finance immediate measures to address the impacts of the crisis, additional public investments to social infrastructure; Repeal and reverse the policies that brought on this crisis (eg.) Liberalisation, deregulation, privatisation.

5. UN should play a central role; Govts to re-negotiate the free trade agreements, placing control on capital flows and applying sensible conditions to foreign investments and financial transactions.

6. Radically reduce military spending and allocate to social sector; commit massive public funds to reverse privatisation of common essential services, and public utilities.

7. Apply stringent ‘progressive’ tax systems by raising exemption from income tax to the poor, no tax on basic consumption foods and tax on the rich and luxury goods. Adopt controls such as, Tobin Taxes, on movement of speculative capital. Dismantle ‘Tax Havens’.

8. Finance Capital and financial system should not dominate over the real economy (production & social production) and ensure economic equity; self determination of sovereignty of peoples and nations.

9. Cancel unsustainable and illegitimate debts of developing countries unconditionally; Tied aids to be rejected. The strategic vision should be to end the Aid regime. Restitution of undue wealth should become a
principle of international law.

10. Phase out the WB, IMF and WTO and help to build a new international financial architecture; withdraw from ICSID. A reformed and democratised UN and not the G7 or G20 must be the at the heart of the financial system reform. Decision making should be based on the 192 country parity vote.

11. Introduce full scale socialisation of Banks, not just nationalisation of bad assets; recover the cost of the bailout from the banks/companies assets and assets of the Executives; Potentially big banks must be subjected to anti-trust and anti-monopoly laws; The offshore banking system to be shut down.

12. The end goal of trade should be social usefulness and not just financial profits; Trade policy should not destroy traditional, home-based and small & medium industries, as these have huge amount of potential employment for the urban and rural poor.

13. Abandon capitalist practice of (a) capitalintensive industrial structure (b) lean model production, (c) free exit policy. Industrial policy should prioritise employment generation, safety & health, improving the quality of life, implementing the ILO’s Decent Work in letter and spirit.

14. Goal of agricultural policy should be food self-sufficiency; Abolishing big land system & Corporation of land, to protect small farmers and not the needs of the transnational agribusiness. WTO should be kept out
of agriculture.