DFID’s new White Paper under the Decent Work micro-scope: small steps forward…
The UK Department for International Development (DFID) has recently published its new ‘White Paper’, its flagship policy document titled ‘Eliminating World Poverty: Building our Common Future’ (available here). Members of the newly established Decent Work and Labour Standards Forum debated and compiled a submission for the White Paper back in June (available here). Was the exercise worth the effort? Read next to the Forum’s submission, there is much to welcome in the White Paper, particularly on social protection and fragile states, but also many areas where the Forum members will want the conversation to continue.
Responding to the global economic crisis
With the triple crises of climate change, global recession and hunger, a comprehensive rethink on approach could not be timelier. The White Paper acknowledges the alarming rise in poverty and unemployment caused by these crises, and their disproportionate impact on women and the vulnerable (1.14-1.15)(NB: references are to paragraphs in the White Paper). While it argues for a growth-led recovery, the paper importantly acknowledges that, “too often growth has been damaging to the local and global environment including the climate, and has privileged the rich over the poor. Often it has failed to generate enough jobs” (2.4).
Why can growth be damaging? Or not emerge at all? And how will DFID avoid these pitfalls in the future? Central to DFID’s diagnosis of such failures is: conflict and bad governance (2.8); policies that discourage business and ineffective taxation systems (2.9); unfair trade rules (2.10); and lack of access to finance of all sizes (2.11). Part of this analysis is very familiar: developing countries bear significant responsibility for their own predicament, and require better conditions for the private sector and greater openness to global capital flows to escape it. Yet without policies to ensure that farmers, workers and the vulnerable can work their way out of poverty and get their fair share of economic growth – as advocated for in the Forum submission – this approach, employed in much of the developing world over the past 25 years, has a troubling record.
It is encouraging then that DFID is committed to increase its already substantial work on social protection, aiming to help some 50 million people in over 20 countries over the next three years (2.19). Helping the poorest and most vulnerable through a basic social wage, cash transfers is a remarkably cost effective way of shielding the most vulnerable from crisis, and ensuring that economic growth reduces poverty.
The White Paper also affirms DFID’s commitment to spend half of all direct country support for basic public services with major initiatives on health (5.27), primary school education (5.36), water and sanitation (5.22) and maternal and infant health (5.45). DFID will stick by its aid commitments, at a time when other governments are wavering in theirs.
DFID makes a huge commitment to support and fund the private sector. It is supporting an Investment Climate Facility for Africa (2.61), strengthening investment promotion agreements, the International Growth Centre (2.86) and scaling-up support for infrastructure development through e.g., its large “Aid for Trade” programme (2.42), and the proposed African North South Transport Corridor (p.41). Missing from this commitment is an explanation of how DFID will ensure that this ambitious support for the private sector will deliver poverty alleviating jobs.
The White Paper restates DFID’s commitment to concluding the long-delayed WTO trade negotiations arguing for, “an ambitious and balanced agreement, building on progress already made” (2.37). Global trade has certainly suffered due to the crisis, and UK commitment to reduce subsidies for European agriculture (2.39) would help farmers in the developing world if realised. Yet DFID does not acknowledge the serious concerns many have with the excessive market access and policy space that many developing countries are sacrificing under the current WTO deal. Further, the White Paper wants to help developing countries “put the ability to trade at the centre of their growth strategy” (2.43), at a time when key bodies such as the ILO, UNCTAD and even the IMF, are recommending growth strategies that rebalance economies with decent domestic wages, rather than relying on the endless growth of low-wage export platforms.
The White Paper’s commitment to stamp out tax evasion from the developing world is most welcome. This is a far greater drain on the public coffers than corruption and real reform could channel revenue into essential public services, instead of Monaco or Switzerland. Yet UK commitments on clamping down on corporate tax evasion are still too hazy. The UK should support the best and easiest solution to the problem: ensure that multinational companies report their profits on a “country-by-country” basis, to stamp out the anti-development practice of ‘transfer pricing’ – fiddling the books to record profits in low tax jurisdictions.
The recognition of the depth of the food crisis (an extra 110 million hungry) and proposed investments to boost investment and innovation in agricultural production are welcome (2.34). However, missing from the analysis of the food crisis is the role played by commodity speculation in doubling food prices in 2007. The deregulation of global commodity markets has done far more to keep bellies empty than any other cause – so its omission is puzzling.
The Decent Work Agenda?
The White Paper’s section on ‘Investing in people for jobs’ (2.102 to 2.104) reads like it was lifted from the Forum’s own submission: “Shared prosperity and opportunity, open to people from all creeds, castes and classes, build cohesive societies with stronger economies which are less prone to conflict”. DFID wants to encourage this through better health and education, business models that support the MDGs, and ILO collaboration. The challenge is also up to Forum members to work with DFID to ensure these aspirations are turned into real activities and commitments.
Work for the poorest is covered throughout the White Paper: from nurses and teachers, to garment workers and agriculture Yet while DFID is providing important support trade unions and civil society the next step is to ensure proper social dialogue: that workers have a seat at all the tables that decide their fate.
Other key announcements that will drive Decent Work include commitments to reduce the cost for migrant workers of sending remittances home (2.66), improving the working conditions in the Bangladesh garment industry, as well as a quadrupling of funding for fair and ethical trade (2.105). Yet there is no mentioned of any strategy to raise labour standards, or acknowledge fo the vital role . The conversation sorely needs to continue.
The threat of climate change
The White Paper acknowledges that emitting carbon at current rates will be a disaster. For the poorest and most vulnerable, it already is. DFID’s new climate funding, in additional to its current aid commitments (3.19), will help the poorest cope with climate change. Yet there is no recognition of the need to support a “just transition”: to ‘de-carbonise’ economic growth and industries in a way that doesn’t hurt poor workers but makes them part of a green new deal.
Building peaceful states and societies
The White Paper acknowledges that violence and conflict have huge costs particularly for the most vulnerable, and needs capable and accountable states, effectively providing basic public services, justice, security and jobs to reduce it. DFID will channel half of all new bilateral aid to fragile states, to invest in security and tackling violence against women; and critically, to create 7.5 million jobs in agriculture, rural enterprise development and private sector development programmes (4.32). These are all measures firmly advocated for in the Forum submission.
Reforming International Institutions
Forum members called for developing countries to have a stronger say in how the IMF and World Bank are run, and for these institutions to drop their damaging conditions attached to their loans. Progress on both fronts is disappointing.
On the question of developing country voice, DFID claims that it has ‘advocated a strong voice… for poor countries” (6.37), but does not commit to specifics. It has instead sought to decentralise World Bank decision making to country offices, arguing they will be more responsive to local needs. While a positive move, this is no substitute for the democratisation needed.
The G20 London Summit gave the IMF extra resources to allow developing countries to engage in counter-cyclical spending –government spending to save jobs and resuscitate growth. Yet the White Paper mentions that DFID will monitor the IMF to ensure that “it works effectively with all countries to agree sound fiscal and monetary policies to support their economies” (2.29). In practice the IMF is still imposing damaging ‘pro-cyclical’ conditions on many borrowers – worsening the recession in the developing world, while the developed world adopts a more Keynesian approach.
For the World Bank, the White Paper notes that “the Bank has stopped imposing conditions on sensitive policies such as privatisation and liberalisation if country ownership is uncertain or the political environment is fragile (p.116). How is this being interpreted in practice? And how does the Bank understand the legacy of past privatisations?
Continuing the conversation
In conclusion, the White Paper opens up many opportunities for the Forum to continue the discussion with DFID. Some ideas include:
- Private sector: DFID is placing a huge emphasis on directly financing the private sector and improving the ‘enabling environment’ it operates in. To what extent is and will this approach help the poorest or create decent jobs? How can we ensure that it does?
- Social protection: what is the evidence on the ground? How can we work together to ensure the entire global poor win the right to a basic social wage?
- Employment generation in fragile states: Can decent work reduce the likelihood of fragile and crisis states lapsing into conflict? What is the latest evidence telling us?
- Climate Change and a ‘just transition’: the poorest risk being hurt by measures to introduce a low carbon economy. Could green jobs under a ‘just transition’ instead turn them into champions for an environmentally sustainable future?
- Public sector: How can DFID help health and education workers to better deliver essential public services? How can public service workers play a more active role in delivering the MDGs?
Do any of these topics interest you? Do you want to work with the Decent Work and Labour Standards Forum to get these conversations started? If so contact us at contact@decentwork.org.uk
For more information on Decent Work, or the activities of the Decent Work and Labour Standards Forum, visit www.decentwork.org.uk
