Talking Points on

Talking Points on

Enhancing Trade Union Participation in PRSPs

in East Africa

Lawrence Egulu

TMLC, Kisumu, December 9, 2005

Background to PRSPs (1) Many developing and transition countries sought external financial

assistance from the IMF and the World Bank to pursue stabilization and structural adjustment programs.

These programs involved limiting the growth of government budget deficit to levels that could be sustained by foreign and non-inflationary domestic financing, budget rationalization through containing public sector employment, liberalization of labour, money and capital markets, and maintenance of an “appropriate” exchange rate policy.

These objectives normally entailed price reforms, removal of subsidies, foreign exchange and internal and external trade liberalization, introduction of "cost sharing" for government-supplied services, privatization, restructuring of government institutions, and legal reforms aimed at providing an "enabling environment".

Background to PRSPs (2)

By the 1990s it was clear that the SAPs had failed to address fundamental structural problems and there were difficulties in demonstrating an automatic relationship between neo-liberal policies and increased well-being for the people.

With increasing loss of credibility in their policies, the World Bank and the IMF thought out how to remodel their SAPs.

Policy Shift by the BWIs?

After more than two decades of supporting SAPs, in major policy shift on September 9, 1999, the Bretton-Woods Institutions recognized “the increasing evidence that entrenched poverty and lack of economic opportunities and asset endowments can themselves be impediments to growth".

They announced a new framework to govern their lending and debt relief activities that would put poverty at the centre of their relations with low and middle-income countries.

…hence birth of PRSPs With poverty as the central target, recipient countries would be

expected to formulate Poverty Reduction Strategy Papers (PRSPs).

PRSPs would therefore measure poverty in the country, identify goals for reducing poverty, and create a spending and policy program for reaching those goals.

Country-owned poverty reduction strategies would provide the basis of all World Bank and IMF concessional lending and should guide the use of resources freed by debt relief under the enhanced HIPC Initiative to the approximately 81 International Development Association (IDA) borrowing countries.

Governments in Charge?

A significant dimension would be that the governments would be “in the driver’s seat”

Governments (in consultative processes that transcend the realms of government agencies and line ministries) would be responsible for the production of the PRS, in close association with the external development partners, civil society and the private sector, in line with the Comprehensive Development Framework (CDF).

PRSPs would be holistic

The PRSP would ensure that a country’s macroeconomic, structural and social policies are consistent with the goals of poverty reduction and social development.

PRSPs would be updated every three years with annual progress reports.

Just change in names?

The PRSP replaced the World Bank’s SAP-era Policy Framework Paper (PFP) as an overarching document that outlines policy directions and resource allocation frameworks.

The IMF’s lending facility for poor countries, the Enhanced Structural Adjustment Facility (ESAF), was subsequently renamed the Poverty Reduction and Growth Facility (PRGF).

Or the death of the Washington Consensus?

First coined by J. Williamson, the ten elements of the Washington Consensus are: fiscal discipline; redirection of public expenditures; tax reform; liberalization of interest rates; trade liberalization; a competitive exchange rate; liberalization of capital flows; privatization; deregulation; and secure property rights.

Would the PRSP process lead to abandonment of these principles?

ICFTU Response to the PRSP approach

The ICFTU’s agenda for participation is premised on the following aspirations: the PRSP process provides a forum where workers as citizens have the right

to be part of economic decision-making in their countries; workers’ interests can best be articulated by unions themselves; they can ensure that the respect for fundamental labor rights, decent work,

and environmental standards must be key elements are incorporated in the national poverty reduction strategy;

since their actions – higher wages, better working conditions, and more secure jobs – help lift low-wage workers out of poverty, these should become part of any poverty reductions plan;

unions help reduce poverty and inequality; many IMF and World Bank-supported policies such as privatization schemes

and pension reforms, directly affect union members and workers in general

WCL and GUFs Response

The World Confederation of Labour (WCL) welcomed the intention of the IMF and the World Bank to focus on poverty reduction and participation.

UNI, the main confederation of service workers, said “PRSP framework offers a unique opportunity for trade unions in developing countries to influence the path of development that their country pursues.”

However Concerns with PRSPs set in

Lack of freedom of association It remains at the discretion of government to

invite CSOs that they can do business with Governments are self-censoring based on

their perception of what the IFIs would find acceptable

The PRS pay inadequate attention to labor market and trade union concerns in general

PRSPs to date

ResilientI will continue carrying firewood until blood comes out of my head.

Without prideSome of us (youth)

give sexual favors to older women in return for money

Self-pityPitying oneself and

not doing anything about one’s

situation

DependencyIf nobody gives anything, I just sleep without food

UnhappinessWe are not happy if

we are not staying with our mothers

HelplessIf I fall sick, I just

stay like that, like a dog

Unsupported Having no

relatives is a hopeless state of life.

Despised by others

A poor person is like being a

mutwa

Powerlessness

There is a feeling of powerlessness to influence things around you – What can I do - a

poor man does nothing

Lonely

My most

pressing need is

loneliness. I have no

husband, no child, no

love.

Frustration

Because we do not know where the market is ….who readily accept because of ignorance … and lack of alternatives

VoicelessA poor person

does not have a voice in the community. …No one will listen to them.

AshamedI do not go to church

because I do not have a dress to put on

Resignation to their situation

Factors beyond our control

DeterminationAs long as one is healthy,

thinks properly for the family, is able to travel to do business, can cultivate land, construct a shelter and work harder..

Child’s drawing, Kampala

What does a poor person feel? (Adapted from Republic of Uganda. (2000): Uganda Participatory Poverty Assessment Report “Learning from the Poor,” Kampala)

Any major policy changes by PRSPs? The PRSP process has no doubt enhanced the role of various

actors in economic decision-making in a number of countries. However, true ownership of the policy documents is doubtful as the

Washington-based international financing institutions (IFIs) still have a dominant role in the process.

Debates on the macroeconomic frameworks, particularly alternative growth scenarios, are not opened up.

The PRSP deliberations are frequently rushed for the sake of enabling a country to qualify for debt relief under the HIPC Initiative.

In terms of content, much emphasis is still placed on the same SAP-like conditionalities, with employment policies, for instance, not being prominent in a number of PRSPs.

PRS Evaluation (1)

In July 2004, World Bank’s Operations Evaluation Department (OED) and the IMF’s Independent Evaluation Office (IEO) separately evaluated the PRS Initiative.

The World Bank report notes that, “The perception of ownership varies among stakeholders …Countries have focused more on completing documents, which give them access to resources, than on improving domestic processes”.

PRS Evaluation (2)

The IMF’s Report on the Evaluation of PRSPs and the PRGF, July 2004 recognizes that “participation in the formulation of PRSPs was generally more broadly based than in previous approaches, and most stakeholders involved in the process viewed this as a significant improvement”.

It is also concerned that “the PRS process has had limited impact in generating meaningful discussions, outside the narrow official circle, of alternative policy options with respect to the macroeconomic framework and macro-relevant structural reforms”.

What Unions have to do to ensure Effective Participation (1)

Pre-participation stage At the onset the union should determine its goal in the PRSP process

– i.e. what does the union hope to achieve from participating in the PRSP process

Is it for publicity’s sake? To be heard and be treated as an important player in national

development/politics? To ensure that participation/social dialogue is institutionalized? To fight privatization?

Determine how much of a priority participation in the PRSP process is!

Are you doing it simply because others are doing so? Is it because it is the “fashion” of the day?


At what stage is the country in the PRSP process? Download any documents for public consumption on

the web or ask for them from the government, BWIs. Have you read the PRSP Source Book at

http://www.worldbank.org/poverty/strategies/sourcons.htm ?

There are 4 major stakeholder groups of which unions are a sub-set of CSOs!

Preparing a checklist of union “demands” Determine how much you are ready to concede –

what will determine the level of success or failure?


Should you be limited to only labor related issues? Wages Employment Labor standards Corporate social responsibility Occupational health and safety HIV/AIDS at the workplace Pensions/social security reforms Labor law changes Informal sector policies Public works schemes


OR do you go “Beyond Labor”? Macroeconomic issues Poverty diagnostics Capital markets Agriculture Trade Micro finance Human resource development Education and training Social Protection Health Energy Transport Water ICT Mining Cross cutting issues: Gender, environment, participation, governance


Determine the use of resources to follow up the PRSP discussions Time Personnel/knowledge/skillso Do you have alternative researched proposals well written down to

support your arguments? Money matters

Getting on board What other organizations/agencies are on board already? Have you been invited? If not, have you notified the government, WB, IMF, ILO, ICFTU? Any follow up turned down? Publicity and awareness raising!


Once on board, how do you ensure effective participation? Have you widely circulated your position papers? Do you want to be treated exclusively or together with

other CSOs? Reaching out to other CSOs? Ensure that other CSOs also articulate your views Participation in what thematic groups? Mechanisms for follow up on discussion, proposals,

meetings?


If your views don’t get through 100% It’s a bargaining issue! Do a self evaluation and assess what you did and what you

didn’t do. If the omissions were really deliberate, let the IMF, WB,

ICFTU, ILO know your objections Write a thorough critique – with alternative proposals!

Beyond the PRSP Document What areas in the PRSP can you implement, monitor and

evaluate? You have to be specific and clear on what you wish to

contribute

WB Study on TU Participation in the PRS

This is a summary of a 10-month World Bank study (January to October 2003) - highlighting the synergies and gaps with regard to the union participation in the PRSP process in 23 countries

The study is titled “Trade Union Participation in the PRSP Process”, Social Protection Discussion Paper Series No. 0417

A summary is online at www.worldbank.org/labormarkets in English, French and Spanish

23 Countries studied

Benin, Kenya, Democratic Republic of the Congo, Ethiopia, Ghana, Malawi, Senegal, Tanzania, Uganda and Zambia

Cambodia, Indonesia and Mongolia Albania, Bosnia & Herzegovina and Georgia Bolivia, Honduras, Guyana and Nicaragua Bangladesh, Pakistan and Sri Lanka

Main findings

Different levels and stages of union participation in the PRSP process

Some have participated from the inception stages; while others were invited when the process was underway

There are cases where unions were totally left out (Uganda, DRC, Tanzania)

No union incorporated in the PRSP drafting None in program implementation, M&E In Uganda and Tanzania, unions have been involved

in the second generation PRSPs

Shallow and ill-prepared consultation deter effective union engagement

Delayed delivery of documents, language constraints, and late notice for meetingso CSA ( Benin) invited to only 2 meetings/sessions o Sri Lanka’s NWC invited to “two seminars and some

consultation meetings”o In Bangladesh, unions were invited to the two-hour

kick-off informational meeting when the PRSP process was entering it's drafting stage

o The reason the CNTS (Senegal) did not make a written submission was because “the information time frames were rather short”

In countries where more than one national trade union federation exists, some unions did not participate

In cases of union pluralism, participation was often limited to the most representative (or the official unions) o In Indonesia the workers’ place is occupied by the KSPSIo In Sri Lanka some 72 trade unions joined the Alliance for the

Protection of National Resources and Human Rights (ANRHR), a network of CSOs, in rejecting the PRSP

o In Albania, the KSSH and not the BSPSh was invited o In Malawi, the MCTU and not the COMATU participated

Unions remain skeptical of Bank and Fund programs

Dominance of macroeconomic issues and other SAP-like conditionalities

“The PRGF is itself a new name for an old program…” – Ghana TUC

“It was the desire to access funds rather than the interests of the people of Honduras that led to the formulation of the PRSP” - CGT –Honduras

Debates on macroeconomic issues have never been opened to other stakeholders o The UNSAS of Senegal boycotted the PRSP because “the

draft paper was lacking a social dimension and was only dealing with macroeconomics”

Lack of capacity within unions remains a major deficiency

Unions lack technical personnel due to the costs of hiring and maintaining such high caliber staff

Most do not have the financial resources to do research and elaborate alternative development scenarios

With adequate capacity within unions and/or involvement of the ILO, there is stronger coverage of labor market issues in the PRSPs

In general labor market interventions exist but are not central

The ILO (2003) shares similar views and attribute the meager coverage of decent work issues to the general absence of labor ministries and other social partners

Some papers do highlight labor market interventions

Unions are not solely preoccupied with “bread and butter” issues

In Sri Lanka the NWC submitted text detailed views on public health, education, nutrition, water supply, sanitation and social protection

In BiH, the unions called on the authorities to expedite the privatization of banks

In Ghana, the macroeconomic framework, equity, taxation, agriculture and investments were all included in the TUC document

Trade unions in many developing countries lack firm ties with CSOs and do not often identify with them

Trade union/CSO relations evolving ”…few trade unions and employers’ organizations

identify themselves with this relatively new all-embracing term. Furthermore other CSOs sometimes do not think of unions and employers’ organizations as part of their movement” – ILO (2003)

Trade unionists see themselves as belonging to representative, democratic and accountable organizations – virtues they don’t always attribute to other CSOs

In some countries union/CSO collaboration is more advanced

Implications for TUs

Prioritizing “participation in the PRSP process” Strengthening union capacity building programs Resources for organizing meetings, sensitizing their

members, carrying out research, disseminate their views/findings, and preparing detailed policy alternatives to submit during the PRSP formulation process

Taking on other developmental roles Demonstrate the developmental and poverty-reducing

role of employment and international labor standards Working with other likeminded CSOs

Implications for Governments

Poverty reducing employment policies - reach out to the unions and the ILO (more structured participatory approach)

Opening up the debate on macroeconomic issues Adequate notice and timely delivery of documents Consultations to take place at I-PRSP level Inclusion of unions in PRSP implementation, monitoring

and evaluation

Implications for the World Bank and the

IMF

Maintain on-going IFI/TU dialogue As a policy consult with unions at national level on major

programs More in-house training for Bank staff on working with

unions More analytical work on the positive contribution of unions

and core labor standards Expand capacity building programs for TUs

Potential World Bank Resources to TUs (1)

Poverty Reduction Strategies Trust Fund (PRSTF) Multi-donor trust fund was set up to support capacity building in low

income countries that are undertaking poverty reduction strategies set up in 2001

Managed in-country by the World Bank, the United Nations, and the contributing donors

All stakeholders involved in the poverty reduction strategy process are entitled to apply to the trust fund

Activities that could be supported include capacity building to: Set up or institutionalize the participatory process; Improve poverty diagnostics; Improve public expenditure management systems; Improve the prioritization of public actions; Cost policies and programs; Undertake Poverty and Social Impact Analysis (PSIA); Analyze sources of growth; Establish monitoring and evaluation systems for the PRSP; Translate and disseminate PRSP documents.

Link: http://www.worldbank.org/poverty/strategies/sourcons.htm


The Small Grants Program Provides grants to CSOs through participating World Bank Country Offices The Program focuses on civic engagement for the empowerment of

marginalized and vulnerable groups The purpose of the Small Grants program is to support the empowerment

of citizens to have greater ownership of development processes, thereby making these processes more inclusive and equitable

Crucial ingredients for empowerment of vulnerable groups include: access to information access to organizational links outside the local domain capacity to influence the public arena and to negotiate with local and

national authorities the existence of trustful national and local institutions, and the presence of enabling policy and legal frameworks for civic engagement.

Link: http://www.worldbank.org.cn/English/partnership/smgp03.pdf


Development Marketplace (DM) A program that promotes innovative development ideas

through early stage seed funding It links social entrepreneurs with poverty fighting ideas to

partners with resources to help implement their vision Since 1998, the Development Marketplace has awarded

more than $14 million to over 200 groundbreaking projects through Global Competitions and Country Innovation Days.

Link: http://web.worldbank.org/WBSITE/EXTERNAL/OPPORTUNITIES/GRANTS/DEVMARKETPLACE/0,,menuPK:180652~pagePK:180657~piPK:180651~theSitePK:205098,00.html

Contact Information (Kenya)

World BankThe World BankP.O. Box 30577Nairobi, KenyaHill Park BuildingUpper Hill RoadNairobi, KenyaTEL:(254-2) 260-300, 260-400FAX:(254-2) 260-380/381

IMFMr. Jürgen ReitmaierSenior Resident Representative in KenyaKenya RE TowersUpper Hill- off Ragati RoadNairobiE-Mail: [email protected]

Contact Information (Uganda)

The World BankP.O. Box 4463Kampala, UgandaTEL:(256-41) 230-094, 232-533FAX:(256-41) 230-092

IMFMr. Peter AllumSenior Resident RepresentativeTel: 256 (0)41 250-410E-mail: [email protected]

Contact Information (Tanzania)

The World BankP.O. Box 2054Dar-es-Salaam, TanzaniaSamora AvenueDar-es-Salaam, TanzaniaTEL:(255-51) 36410, 38355FAX:(255-51) 113039

IMFE-mail: [email protected]

The WB President

Mr. Paul Wolfowitz

President, The World Bank Group

1818 H Street, NW

Washington, DC 20433 USA

tel: (202) 473-1000

fax: (202) 477-6391

E-mail: [email protected]

Contacting the IMF Managing Director

Mr. Rodrigo de Rato y FigaredoManaging DirectorInternational Monetary Fund700 19th Street, N.W.Washington, D.C. 20431Tel: (202) 623-7000Fax: (202) 623-4661General inquiries:

Tel: (202) 623-7300Fax: (202) 623-6278email: [email protected]

Contact Information (Others)

Mr. Peter Bakvis Global Unions - Washington Office1925 K Street NW, suite 425Washington, DC 20006Phone: 202-463-8572Fax: 202-463-8564E-mail: [email protected]

Documents

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