June 9 2020

International policy on COVID-19: ILO and the World Bank

Much like the virus itself, news on COVID-19 and possible policy measures are spreading fast. Major institutions like the World Bank, the IMF and the ILO are scrambling to provide adequate support and policy advice. It is worthwhile to take a closer look at the recommendations of these institutions.

Early in 2020, COVID-19 started spreading globally. On March 11th, the WHO declared the outbreak a pandemic while stating that they were not only deeply concerned by the disease itself, but also by the “alarming levels of inaction”. Indeed, it took some time for national governments and international institutions to wake up to the threat.

The ILO: solutions that put workers first

The ILO mentioned COVID-19 in passing quite early in 2020, pointing to the adverse effects on youth employment in Asia. But in general, the earliest COVID-19 recommendations did not yet foresee the catastrophic consequences. As national lockdowns slowly started to halt the global economy, the ILO released its first report on the impact of the disease on the world of work, and corresponding policy responses (March 18th). The report predicted a global economic recession, but was quite “optimistic” in its predictions that global unemployment would “only” increase with between 5.3 and 24.7 million jobs lost (FTE). This report already questioned whether (informal) self-employment, usually a “default” option for survival in times of crisis that doesn’t react to economic downturns, would be able to withstand this particular crisis. Due to the severe lockdown measures, they predicted an increase in working poverty.

As the pandemic continued to spread, the ILO estimates for global unemployment turned more pessimistic: by April 29th the ILO calculated that the global economy could lose up to 305 million full time jobs. In its policy briefs, the ILO increasingly pays attention to those most affected; women, informal workers, independent workers, and the hardest hit economic sectors. For the 1,6 billion affected workers in the informal economy, the ILO predicts income losses up to 80%. Women, already the largest portion of informal workers, are now facing even more hardship as they are over represented in the most affected sectors; accommodation and food, health care, etc. Around 70% of jobs in health care are held by women, this includes social workers, laundry, cleaning staff… These women not only face economic hardship and more care tasks at home, but also run a serious risk of contracting COVID-19.

In general, the ILO proposed four key pillars for the policy response to this crisis;

  1. Stimulating the economy and labour demand; through an active fiscal and monetary policy, lending and financial support to specific sectors…
  2. Supporting enterprises, jobs and incomes; most importantly by extending social protection for all combined with employment retention, financial/tax relief for enterprises…
  3. Protecting workers in the workplace; through teleworking, PPE, health access for all, paid leave…
  4. Relying on social dialogue for solutions; through capacity strengthening, collective bargaining…

In specific policy recommendations, the ILO still supports a market response; as they recommend in the second monitor “Open trade regimes, stable international capital markets and international liquidity would help shore up [the] efforts”. But rather than seeing this as a “miracle cure”, the overall framework of the four-pillar response shows that the ILO is committed to put people first in a rights-based approach. Due to its tripartite structure and emphasis on social dialogue, the ILO has always put the long term benefit of workers before market gains. For years, unions around the world have been using social dialogue to reach vital agreements on sick leave, pensions and other social protection measures.

But a rights-based approach that puts humans at the centre is about more than social dialogue between the social partners. It is about inclusion, about leaving no one behind. The ILO not only recognises the hardest hit communities, but also actively demands their inclusion in the search for solutions. They state that local, community-based initiatives can work quickly and cater to specific needs. The ILO shows that it is open to the participation of other social actors. The members of the Network on the Right to Social Protection (NRSP) are showing that there are many ways for civil society to act and contribute to solutions. The situation is too extreme to wait for governments and international institutions beyond the ILO to give unions and movements a seat at the table. The members of the NRSP take matters into their own hands, for instance; writing the Indian Prime Minister with recommendations, demanding attention for the elderly, highlighting the unequal gender-impact… Beyond the crisis, the partners of the network are also demanding long term systemic change!

The World Bank: short-term solutions to long-term problems

In response to COVID-19, the World Bank (WB) opened its Pandemic Emergency Financing Facility (PEF), which was launched in 2017. Unfortunately, this programme has long been criticised as too slow and complicated: funds are only available after a certain number of cases, deaths and countries affected; making it impossible to use as a preventive measure.

As has been pointed out by many critics, the current global crisis comes in a context of decades of WB promotion of “PPE” or public-private partnerships. This is an important tool for healthcare commercialisation and cuts in social spending which limits the effectiveness and inclusivity of health care systems. The WB approach the past decades is of course also closely connected to the financial schemes of the IMF that have long held nations in the Global South in a cycle of debt and despair. The destructive effects of a decade-long dismantling and limiting of social protection measures in the name of debt servicing and free trade now become visible. The fact that these very same organisations now pledge billions to assist relief efforts does not undo the years of systemic underfunding in health care and social protection. In addition, despite civil society and UNCTAD urging the institutions to cancel debt, both the IMF and WB currently only propose a less effective debt suspension.

To help understand and study the various approaches to the pandemic the WB began publishing a weekly overview of country measures on Social Protection and Job Responses to COVID-19. As of May 22nd, 190 countries planned, introduced or adapted 937 social protection measures. They divide these measures in 3 categories; social assistance, social insurance and labour market programmes. The reports does not look at health measures and thus leave out an important aspect. Despite being a valuable source of information, it also fails to detail the real-life effects of the measures: for instance; how successful are they? Do the measures reach the targeted populations? Has there been critique locally (e.g. from major civil society groups)? This omission points to a wider lack of attention to social dialogue within the WB recommendations.

As is to be expected, the WB sees the solution to the challenges of this pandemic in the facilitation of trade (flows). Of course, it does not ignore the unequal effects of the virus both globally and across different groups (age, gender…). So they also advocate for compensating loss of labour, safety net programs, etc. However, Social Safety Net programmes, and most of the WB’s other solutions, are band-aids on a fundamentally broken system. The specific goal of these programmes is supporting people in poverty through targeted solutions such as temporary cash-transfers.

NRSP: investing in social protection is investing in the future

While commendable and necessary in times of crisis, most social protection programmes that are currently being implemented fail to address long-term problems. Poverty, unprotected workers, lack of health care, and unequal impacts are not new. As the Network on the Right to Social Protection, we believe that the only true solution is systemic change! Social Protection is a permanent way to protect entire societies, not just the extreme poor and to prevent poverty. Why do some elderly only receive a living pension now? Why do we only support women now that they are at the forefront of the fight against a deadly virus? Why don’t we permanently protect workers against unjust company policies? Not only would people benefit from better health care, pensions, social security and other protection measures, societies would also be safer and more resilient in times of future pandemics and other crises! Stronger health care institutions would save more lives and when people aren’t forced to go out and work to survive, the disease would spread much slower. These solutions aren’t outlandish or ridiculously expensive; many countries already have different types of Social Protection; both contributory and non-contributory or a combination of both.

Universal, solidarity based Social Protection is not only the best solution to the current pandemic, it is also the most fair, because the strongest shoulders should carry the heaviest burden. Let’s use this momentum to bring about real change instead of going back to business as usual. As the NRSP, we want to radically transform the current economic model of perpetual growth and production, not only in the interest of workers, but in the interest of our planet.



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