Brussels, 12 October 2019 (ITUC OnLine): Responding to
the World Bank’s publication of the “World Development Report 2019: The
Changing Nature of Work” on Friday, ITUC General Secretary Sharan Burrow
expressed disappointment in the Bank’s ‘flagship’ report: “The WDR 2019
seems more intent on delivering a few highly questionable and simplistic policy
messages about the need to deregulate business and alleviate it of obligations to
contribute to workers’ social protection than providing a thoughtful
perspective on challenges created by rapid transformations in the world of
work.”
She added: “It is strange that the World Bank would
publish the WDR 2019 as its flagship development research report when most of
its central assertions are not backed up by serious analysis or are even
contradicted by data presented in the report.”
Burrow gave as an example the WDR 2019’s repeated
claim that wide-scale deregulation of business will reduce informality, even
though the report contains information showing that “informality has remained
remarkably stable” despite a rapid fall of business regulation in the past two
decades. “Support for further deregulation will only reinforce strategies of platform
companies to subvert employment relationship rules, increase precarious work,
pay poverty wages and undermine workers’ rights”, said Burrow.
Although the WDR contains some pertinent analysis of
the manner in which digital businesses have accelerated tax base erosion and
profit shifting, the need to tighten tax rules on these businesses is
completely omitted in the recommendations section. Instead, the expansion
and increase of regressive value added taxes is presented as the “first line of
reform for developing countries” to finance basic social assistance.
The WDR even opposes exemptions or lower tax rates for
basic necessities that could make VATs less regressive. Employer-financed
social protection “is not a good fit for developing countries”, so business
would be alleviated of any obligation to contribute.
“The recommendations to shift taxation from companies
to consumers and to slash business regulation is reminiscent of the
pro-deregulation drum-beating that we have been accustomed to reading in the
Bank’s annual ‘Doing Business’ report for fifteen years. It is astonishing that
the World Bank would allow the same right-wing ideology to permeate what is
supposed to be its contribution to the debate on the future of work,” Burrow said.
Burrow contrasted the WDR 2019, which frequently
presents selective evidence and makes unwarranted generalisations on the basis
of outlier examples, with the important contributions made by the Bank’s “WDR
2013: Jobs”. The earlier WDR included an exhaustive review of economic
research on the impact of labour regulations and concluded that long-held myths
about such regulations being job-destroyers were not based in reality: “the
impacts on employment levels tend to be insignificant or modest”.
Burrow also contrasted the anti-worker perspective of
the WDR 2019 with the major step taken by the World Bank on 1 October when its
new labour safeguard – which stipulates respect for workers’ rights in all
Bank-financed projects – entered into effect as part of the Bank’s new
Environmental and Social Framework.
Burrow concluded: “In a world in which inequality has
been increasing for more than three decades and workers’ rights are constantly
under threat, it is frustrating to see the Bank finally recognise the importance
of labour rights in its new safeguards policy and then undercut that less than
two weeks later by promoting an unabashedly pro-business agenda in the WDR
2019.”
Media advice from ITUC
