Claude Kwaku Akpokavie ILO (ACTRAV)

1. ILO trade Union training on Economic and Social Policy with a special focus on Poverty Reduction Strategy PapersBarbados Workers College, 13-17 October 2003 Claude Kwaku Akpokavie ILO (ACTRAV)

2. Overview • Mission of trade unions • What is poverty? • State of global poverty • Inequality matters • The return of the poor • Why the return of the poor • What are PRSPs • Principles of PRSPs • Elements of PRSPs • Implementation of PRSPs • Why unions should participate in PRSPs/PRSs • Trade union critique of PRSPs • What to look out for • Trade union action against poverty

3. Mission of trade unions • Defence of workers’ rights/interests • Promotion of social justice/development • Defence of the weakest is linked to the defence of the strongest, most protected

4. What is poverty? Poverty is … : • Multidimensional • Poverty is a lack of: • access to basic needs • power • Voice • Security • Poverty is about: • Income (employment) • Rights (standards) • Social protection • Participation of the poor in shaping their destiny (social dialogue)

5. State of global poverty • Complexity of measuring poverty (income/HDI/relative income) • 1.2 billion people live on less than 1US$ a day (i.e.. 24% of developing world’s population) • 2.8 billion people live on less than 2US$ a das (i.e.. nearly half the world’s population)

6. State of global poverty Distribution of world population living on less than 1US$ a day, 1987 & 1998, in %

7. State of global poverty Income poverty by region, 1987-98: share of population living on less than $1 a day, in % Relative income poverty by region, 1987-98: share of population on less than ⅓ of average national consumption for 1993

8. State of global poverty: gender • Some 70% of people in extreme poverty are women • Unequal access to education, credit, jobs, property ownership, … • Women have increased participation in labor markets but higher levels of: • Unemployment • Insecure jobs • Lower wages • Undervalued jobs

9. State of global poverty: rural sector • Of the 1.2 billion people living in extreme poverty, 900 million of them live and work in rural areas • They are rainfed farmers; Smallholder farmers; Artisanal Fishermen; Pastoralists; Wage labourers; landless peasants; Female-headed households; Indigenous people • Problems: • Cultivate dry and marginal lands • Live in remote areas • Illiteracy • Bigger families and higher mortality • Suffer from hunger and diseases • Have few opportunities off the land • have less access to land, water, credit and social services • No access to land

10. State of global poverty: labour market • 160 million workers unemployed (notably first time job seekers) • 70 million youth unemployed • Youth unemployment is twice as high as average unemployment • Estimated 500 million workers, mostly from developing world, earn less than 1US$ a day • 460 million new job seekers will enter the labour market over the next decade (two-thirds from Asia)

11. Inequality matters! • Increasing inequalities between countries / within countries • 1960 per capita GDP of richest 20 countries = 18 times that of poorest 20 countries. In 1995 the gap increased to 37 times. • Inequality is important because it determines poverty outcomes

12. The “return of the poor” Policy evolution of IFIs: • 1960 – national modernisation • mid 1970s – basic needs • 1980s - Structural adjustment Critique: • Human face of adjustment • World Social Summit • 4th World Conference on Women, Beijing • UN: Year/Decade for Poverty Eradication • G8 initiatives: debt relief (HIPC) • 1999: World Bank & IMF adopt POVERTY REDUCTION STRATEGY PAPERS as framework for aid and debt relief • 2000 Millennium Development Goals (half extreme poverty by 2015)

13. Why the return of the poor • Structural adjustment policies where having little impact on poverty and inequalities • Increased pressure on IFIs to heighten poverty impact of aid, lending • Crisis of legitimacy of the World Bank & IMF • Criticism that development decisions were behind closed doors with little consultation • Research showed the need for a comprehensive approach to poverty reduction • End of the Cold War • Emergence of an international public opinion

14. What are PRSPs? • PRSPs are Poverty Reduction Strategy Papers • 1999: World Bank & IMF decide that PRSPs will be the basis of all concessional lending and debt relief under the Highly Indebted Poor Countries (HIPC) Initiative for all low income countries • 81 “PRSP-eligible countries” • 39 in Sub-Saharan Africa • 12 in East Asia and the Pacific • 11 in Europe and Central Asia • 9 in Latin America and the Caribbean • 2 in Middle East and North Africa • 8 in South Asia • Caribbean PRSP eligible countries: Guyana; Dominica; Grenada; St Lucia; St Vincent; Haiti • Other countries are encouraged to undertake Poverty Reduction Strategies (PRSs) • To date 50 Interim-PRSPs and 20 Full PRSPs

15. Principles of PRSPs • COUNTRY DRIVEN (country ownership) • based on broad PARTICIPATION of all stakeholders • RESULTS ORIENTATED and focused on outcomes that would benefit the poor • COMPREHENSIVE in scope and recognising the multidimensional nature of poverty • PARTNERSHIP-ORIENTED • LONG-TERM in perspective

16. Elements of PRSPs • Poverty diagnosis (features, causes) • Poverty actions (priority, short/long term) • Indicators (set targets, indicators of progress • Monitoring (coordination, monitoring results)

17. Implementation of PRSPs • participatory process • approval of cabinet • approval of parliament • endorsement by Boards of WB and IMF for concessional lending and debt relief • implantation into domestic policy (macroeconomic policy, budgetary allocations, social spending, sectors) • donor assistance

18. Implementation of PRSPs • Interim-PRSP (roadmap- 1 year) • Full PRSP (3 years) • Annual reviews • World Bank: Poverty reduction support credit (PRSC) • IMF: Poverty reduction and growth facility (PRGF) • Regional Banks • Bilateral donors • UN agencies

19. Why unions should participate in PRSPs/PRSs PRSPs offer trade unions an OPPORTUNITY to: • link Redistribution with Growth • place an emphasis on access to basic needs and public services like water, health, education • influence national socio-economic policy • build broader alliances with like=minded Civil society organisations • bring labour concerns into wider public arena • argue against structural adjustment policies • institutionalise social dialogue on socio-economic policy

20. Why unions should participate in PRSPs/PRSs Participation in PRSPs poses RISKS for unions: • Danger of legitimising unfavourable outcomes • Diversion of limited resources • PRSPs may offer a minimalist position policy framework (reduction of poverty) instead of an ambitious framework (eradication of poverty / development)

21. Union critique of PRSPs • Participation / ownership gap: • TUs participating – quality of participation? • PRSPs: disguised structural adjustment? • Lack of capacity of some trade unions • Networking – new alliances • Social dialogue institutions and PRSPs • WB/IMF role: country ownership?

22. Union critique of PRSPs • Content issues: • Correlation: trade union participation & labour content of PRSPs • Membership interests / broader interests • Sectoral component of PRSPs - Agriculture • Global causes of poverty & PRSPs

23. Union critique of PRSPs • Some policy issues: • Employment • Privatisation • Public goods (water, electricity,…) • Macroeconomic framework of PRSPs • Rights (labour law reform/social policy) • Minimum wage policy & poverty reduction • Social protection (pensions..) • …etc…

24. What to look out for: • LABOUR MARKET POLICIES: IFI-sponsored reforms often include reducing or freezing wages, eliminating job security provisions, eliminating limits on working hours,restricting collective bargaining right • PRIVATISATIONS of state-owned enterprises are often included as specific IFI loan conditions (job losses, working conditions, impact on poor, working conditions) • TRADE LIBERALISATION often includes reduction or elimination of import tariffs and other restrictions on imports and capital flows (impact on domestic agriculture, industry, jobs, rapid outflow of capital) • INVESTMENT POLICY: to encourage exports, many countries have created EPZs, offering tax advantages, looser regulations, restricted labour rights

25. What to look out for: • MARKET LIBERALISATION: IFI reforms often include eliminating price controls, price subsidies, and reducing private sector regulation-may lead to price increases of essential goods, imposition of user fees on public services • PENSION REFORM often include partial or total privatization of old-age pension systems- often results in reduced pensions and wide variation in benefits dependent on choice and chance • FISCAL AND MONETARY POLICY: pressure to increase taxes or reduce public expenditures in order to reduce the government deficit; IMF may push monetary authorities to raise interest rates or otherwise act to sustain the value of the currency, with the stated objective of controlling inflation

26. What to look out for: • MACRECONOMIC POLICY: PRSPs are still largely within the framework of past conditionalies of IFIs (stabilisation and structural reforms) • privatizations must be subject to consultations, social impact analysis • Government and IFIs must accept to examine alternatives to privatization, including IFI assistance for improved public services

27. Lessons learnt • Need for Capacity Building (institution; policy; advocacy) • Proactive – be ahead of the curve • Budget monitoring • Dealing with Global dimensions of PR • Risks and opportunities of PRSPs • Sustainability of PRSP approach: investing in the long term

28. Action • Organise the unorganised • Services to poor (informal) workers • Initiate socio-economic activities (cooperatives, mutual health systems • …passion…policies…action