THE IMPACT OF THE IMPACT OF GLOBALISATION AND ITS GLOBALISATION AND ITS

IMPACT ON WORKERSIMPACT ON WORKERSMain Challenges for the Labour Movement Main Challenges for the Labour Movement

QUOTE…No.1

“Globalization reduces poverty because integrated economies tend to grow faster and this growth is usually widely diffused”

By World BankWB Report in 2001

QUOTE…No.2

“To allow the market mechanism to be sole director of the fate of human beings and their natural environment…would result in the demolition of society”

By Karl Polanyiin 1944

AGENDA FOR DISCUSSIONAGENDA FOR DISCUSSION

How do you change How do you change “globalization” to better “globalization” to better serve for workers and serve for workers and ordinary people in the world?ordinary people in the world?

Activity 1Activity 1

• Take a piece of paper, and Take a piece of paper, and write a list of write a list of FIVE THINGSFIVE THINGS (reforms) you will implement (reforms) you will implement as President or Prime as President or Prime Minister of your country to Minister of your country to improve “globalization”improve “globalization”

Activity 2Activity 2

• For each of the five things you For each of the five things you identified in Activity 1, list identified in Activity 1, list THREE THINGS you should THREE THINGS you should do to achieve the best success do to achieve the best success

GLOBALISATION: GLOBALISATION: HISTORICAL DEVELOPMENTHISTORICAL DEVELOPMENT

• Continuous and radical changes in:Continuous and radical changes in:

– Means of TransportationMeans of Transportation

– Information TechnologyInformation Technology

– Political (Regulatory) Framework.Political (Regulatory) Framework.

GLOBALISATION OF:GLOBALISATION OF:

• Trade

• Production

• Finance (investment, capital)

• Company (MNEs)

• Cultures

• Politics

GLOBALISATION IS…GLOBALISATION IS…

Process of economic, social, Process of economic, social, political and cultural integration of political and cultural integration of nation-states into a global nation-states into a global market/community/standard, with market/community/standard, with much increased inter-dependencemuch increased inter-dependence

CHANGE OF WHEELS and ENGINES for GLOBALIZATION

1980

Exchange of goods and services between nation state

Creation of productive assets and purchase of assets by foreigners

TRADE FDI

GOLD STD/FIXED RATE US$/FLOATING RATE

MANAGED MARKET ECONOMY

FREE MARKET ECONOMY

LARGE GOVERNMENTfor WELFARE STATE

SMALL GOVERNMENTfor PRIVATE INITIATIVE

COLD WARCOLD WARPOWER POLITICSPOWER POLITICS

NEW-LIBERALNEW-LIBERALECONOMIC POLITICSECONOMIC POLITICS

NEO-LIBERALISMNEO-LIBERALISM

““If you free up the flow of If you free up the flow of private capital, goods and private capital, goods and services across national borders services across national borders then this will lead to raised levels then this will lead to raised levels of productivity, GDP growth, of productivity, GDP growth, employment and real income.”employment and real income.”

GLOBALISATION OFGLOBALISATION OFTRADETRADE

• Increase in trade volume (1950-2001):– International trade grew twice as fast as GDP,

or world production– However, the growth rate was much higher

during 1950’s and 1960’s than in 1990’s

• Until 1980’s, production was still based in few industrialised countries:– Fordism (mass production system)– Standardisation of products.

GLOBAL ASSEMBLY LINEGLOBAL ASSEMBLY LINE

• Garments designed in the USA - • Manufactured under contract in China• By a company owned in Hong Kong • With raw materials from all around the world• Transported to the UK in container ships carrying

a flag of convenience and crewed by Filipino seafarers

• Payroll and other data tasks carried out in Asia• And, the profits accounted in a tax haven (to avoid

tax)

GLOBALISATION OF GLOBALISATION OF FINANCEFINANCE

• Political decisionsPolitical decisions to liberalise capital’s to liberalise capital’s circulation;circulation;

• Creation of a global financial network;Creation of a global financial network;• Daily transactions: more than 2 trillion Daily transactions: more than 2 trillion

US $ (1/4 of total world trade value).US $ (1/4 of total world trade value).

Source: WTO (Annual DG Report 2001)Source: WTO (Annual DG Report 2001)

GLOBALISATION OFGLOBALISATION OFCOMPANYCOMPANY

• Trans-national Corporations developed:Trans-national Corporations developed:

– Regional marketsRegional markets

– World marketWorld market

• More than 60,000 trans-national More than 60,000 trans-national corporations (TNCs) with over 800,000 corporations (TNCs) with over 800,000 affiliates abroad.affiliates abroad. Source: UNCTAD

Source: UNCTAD

GLOBALISATION OF GLOBALISATION OF CULTURESCULTURES

• Development of the media via satellites;• Global media concentration;• Advertising;• English has become a de facto global

language for business although there exist 6,000 languages in the world (95% of world population speak around 100 languages): One person in five speaks English.

GLOBALISATION OF GLOBALISATION OF POLITICSPOLITICS• End of cold war – proliferation of the

democratic values and market rules of the winner (U.S.);

• Development of democracy (but with a huge gap between the idea and reality);

• Threat to, and huge limit on, sovereignty of nation-states (e.g. social and economic policies);

• Increasing impact of international institutions on social and economic policies of countries.

GLOBALISATION… or GLOBALISATION… or POLARISATION? [TRADE]POLARISATION? [TRADE]

• Percentage in World Trade– Share of Africa = 1%

“While world trade has increased ten times since 1970 and more food is produced per person than ever before, the number of people going hungry in Africa has doubled…”

• The world’s top 30 host countries account for The world’s top 30 host countries account for 95% of total world FDI inflows and 90% of 95% of total world FDI inflows and 90% of stocks;stocks;

• The world’s top 30 home countries account for The world’s top 30 home countries account for around 99% of outward FDI flows and stocks;around 99% of outward FDI flows and stocks;

• 49 LDC receive 0.7% of FDI;49 LDC receive 0.7% of FDI;

• Below 1% = African share in FDI inflows.Below 1% = African share in FDI inflows.

GLOBALISATION… orGLOBALISATION… orPOLARLIZATION? [FDI]POLARLIZATION? [FDI]

Source: UNCTADSource: UNCTAD

GLOBALISATION… orGLOBALISATION… orPOLARLIZATION? [TNCs]POLARLIZATION? [TNCs]

• Fifty-one of the world's top 100 economies are corporations Fifty-one of the world's top 100 economies are corporations (in 2000);(in 2000);

• TNCs control 2/3 of all world trade and 80 % of foreign TNCs control 2/3 of all world trade and 80 % of foreign investment;investment;

• TNCs employ only 3% of the total world labour force (2.5 TNCs employ only 3% of the total world labour force (2.5 billion) and less than half of them are in the South;billion) and less than half of them are in the South;

• The 200 largest TNCs employ 1% of the total labour force The 200 largest TNCs employ 1% of the total labour force and have a turnover equal to 28.3% of the world GNP;and have a turnover equal to 28.3% of the world GNP;

• About 90 of the world’s largest 100 non-financial TNCs are About 90 of the world’s largest 100 non-financial TNCs are headquartered in the Triad (US, EU and Japan).headquartered in the Triad (US, EU and Japan).

Source: W. Anfreff, “Le multinazionali globali”, Trieste 2000Source: W. Anfreff, “Le multinazionali globali”, Trieste 2000

Source: Institute for Policy StudiesSource: Institute for Policy Studies

Source: Oneworld.netSource: Oneworld.net

Source: Globalpolicy.orgSource: Globalpolicy.org

Source: UNCTADSource: UNCTAD

GLOBALISATION… or GLOBALISATION… or POLARISATION? [INCOME]POLARISATION? [INCOME]

• 20% of the world’s population consumes 86% of goods produced;

• The richest 20% of the world’s population had at their disposal 86% of the world GDP while the poorest 20% had access to a mere 1%.

• Income gap between the top 10% and the bottom 10% = 77:1 in 1980 and 122:1 in 1999

• Maximum daily consumption of the world’s poorest 400 million = $0.75 in 1998

Various sourcesVarious sources

GLOBALISATION… or GLOBALISATION… or POLARISATION? [SOCIAL]POLARISATION? [SOCIAL]

• More than 250 million children at work;• 120 million working children have no access to

school;• Number of “official” unemployment is 160 million

and 500 million new jobs needed over the next decade;

• 500 million workers are unable to keep their families above the $1 poverty line (of the 1.3 billion people living in poverty worldwide, more than 70% of them are women and girls) .

Source: ILO World Employment Report 2001 (www.ilo.org) - ICFTUConference of women trade union leaders, Rio di Janeiro, 18-21 May 1999

Source: ILO World Employment Report 2001 (www.ilo.org) - ICFTUConference of women trade union leaders, Rio di Janeiro, 18-21 May 1999

CONCEPTUAL BACKBONE CONCEPTUAL BACKBONE OF GLOBALISATIONOF GLOBALISATION

““Neo-liberal Economic Policy”Neo-liberal Economic Policy”– Thatcherism since ‘79 / Reaganomics since ‘81;– Role of IMF/WB & WTO (Washington

Consensus);– “Competition, competition and competition!”;– Liberalization of markets;– Privatisation of public enterprises and services;– New Zealand’s Experiment in Asia and the Pacific– “Integrationist Strategy” for development

OTHER FACTORS OF OTHER FACTORS OF GLOBALISATIONGLOBALISATION

• Fiscal crises in nation states;• Reduction of tariffs & trade barriers (GATT

and WTO) Integration of national markets into a global market and the emergence of global competition;

• Concentration of capital (mergers & acquisitions);

• Development of new products (New Economy): services and information.

IMPACT of GLOBALIZATION IMPACT of GLOBALIZATION on TRADE UNIONS (1)on TRADE UNIONS (1)

• Decrease of trade union density;• From national agreements/negotiations to

enterprise/individual agreements (NZ shock);• Abolition of, or pressure on, check-off

systems;• Increase of the informal employment (most of

the workers employed are women and children) where no social protection is ensured and organizing is extremely difficult.

IMPACT or GLOBALISATION IMPACT or GLOBALISATION on TRADE UNIONS (2)on TRADE UNIONS (2)

• Increase of atypical forms of labour (contract labour). These form are more common among women than among men (90% of home workers in EU are women);

• Increase of EPZs (from 850 in 1999);• Global attack against workers’ rights;• Weaker tripartite machinery.

Source: ICFTU Annual SurveySource: ICFTU Annual Survey

IMPACT of GLOBALISATION IMPACT of GLOBALISATION on WORKERS’ RIGHTS (1)on WORKERS’ RIGHTS (1)

• Over 300 strikes repressed by employers or the police, in nearly 90 countries;

• About 8,500 arrested or detained;

• 209 trade unionists killed or disappeared;

• Over 100,000 harassed ;

• 20,000 dismissed because of their trade union activities.

Source: ICFTU Survey of Violations of Trade Union Rights 2001 (http://www.icftu.org/survey).

Source: ICFTU Survey of Violations of Trade Union Rights 2001 (http://www.icftu.org/survey).

IMPACT of GLOBALISATION IMPACT of GLOBALISATION on WORKERS’ RIGHTS (2)on WORKERS’ RIGHTS (2)

• 20 million bounded labourers worldwide;• 700.000 women and children victims of

cross-border human trafficking each year;

• Worldwide women are paid anything between 10-50% less than men for doing similar job or different job of equal value.

Source:PSI Women - N.14- January 2002 (www.world-psi.org)ICFTU:www.icftu.org/survey

Source:PSI Women - N.14- January 2002 (www.world-psi.org)ICFTU:www.icftu.org/survey

THE CHALLENGE:THE CHALLENGE:GOVERN OR FIGHT? (1)GOVERN OR FIGHT? (1)

• Organising / Global unions;

• Framework Agreements;

• Alliance on MNEs;

• Extension of the European Works Councils into Global Works Council.

THE CHALLENGE:THE CHALLENGE:GOVERN OR FIGHT? (2)GOVERN OR FIGHT? (2)

• Trade union networking and global solidarity;

• Globalisation of workers’ rights: ILO Declaration on Fundamental Principles and Rights at Work;

• Social Clause.

THE CHALLENGE:THE CHALLENGE:GOVERN OR FIGHT? (3)GOVERN OR FIGHT? (3)

• Co-ordination of economic, trade, and social policies;

• Social dimension of globalisation and the role of the ILO in the world agenda (G8 and relationships with IMF/WB/WTO.

FUNDAMENTAL GOALS of FUNDAMENTAL GOALS of TRADE UNIONS are…TRADE UNIONS are…

• To give globalization “human face” that To give globalization “human face” that benefits us all, eradicate poverty, eliminates benefits us all, eradicate poverty, eliminates social exclusion and reduce inequality;social exclusion and reduce inequality;

• To take workers’ rights out of competition by To take workers’ rights out of competition by establishing fundamental common standards.establishing fundamental common standards.

HOW TO ACHIEVE THE HOW TO ACHIEVE THE GOALS?GOALS?

• Promote “pluralism” in international decision-Promote “pluralism” in international decision-makings;makings;

• Reform IMF/WB/WTO;Reform IMF/WB/WTO;• Establish international rules negotiated with Establish international rules negotiated with

the social partners;the social partners;• Control capital flow (short term, speculative) Control capital flow (short term, speculative)

to redirect investment into real economies;to redirect investment into real economies;• Internationalize trade union programmes, Internationalize trade union programmes,

activities, campaigns and solidarity.activities, campaigns and solidarity.

What is Role of ILO?What is Role of ILO?

THE ILO AGENDA:THE ILO AGENDA:TO ACHIEVE “DECENT TO ACHIEVE “DECENT WORK FOR ALLWORK FOR ALL

• “Decent Work” composed of:

– Workers’ rights

– Productive employment

– Social protection

– Social dialogue

WORKERS’RIGHTSWORKERS’RIGHTS

• Ratification and implementation of core labour standards (eight core conventions);

• Ratification and implementation of international labour standards;

• Participation to the ILS supervisory system and to the follow-up of the Declaration.

PRODUCTIVE EMPLOYMENTPRODUCTIVE EMPLOYMENT

• Productive employment with dignity;

• Employment policies should be core part of national economic/social policy, with equal opportunities and treatments guaranteed;

• Development of small and medium-size enterprises.

SOCIAL PROTECTIONSOCIAL PROTECTION• Development of social security systems that Development of social security systems that

cover the entire population;cover the entire population;• Pension schemes to guarantee a decent life Pension schemes to guarantee a decent life

after retirement;after retirement;• Other welfare benefits;Other welfare benefits;• Special attention to vulnerable groups Special attention to vulnerable groups

(women, youth, migrants, the informal (women, youth, migrants, the informal sector, minorities, etc.);sector, minorities, etc.);

• O.S.H. and the Environment.O.S.H. and the Environment.

SOCIAL DIALOGUESOCIAL DIALOGUE

• Promotion and institutionalization of Promotion and institutionalization of tripartism;tripartism;

• Strengthening workers’ and employers’ Strengthening workers’ and employers’ organisations;organisations;

• Strengthening negotiations between social Strengthening negotiations between social partners at all levels (enterprise, industry, partners at all levels (enterprise, industry, national, regional and international)national, regional and international)..

Decent WorkDecent WorkFor Better TomorrowFor Better Tomorrow