Social Watch Report 2009: Just Solutions to the Crisis are Only Possible through Social Investment

In Pittsburgh and New York in September, the Social Watch 2009 Report was launched on a global level. The Report, titled People First, underscores the necessity for solid investments that can stimulate the world economy, and the need for thoroughgoing reforms of the world financial architecture, beginning with institutions such as the International Monetary Fund and the World Bank, so that national policy space is respected and there is policy coherence with regards to internationally agreed-upon  norms and commitments.

It is necessary to establish solid programs of social investment in order to effectively stimulate the global economy and mitigate the impacts of the financial crisis for workers, women, and the poor, claims Social Watch in its 2009 Report.  This would not only be in accordance with principles of social justice, but also is good economic policy, affirms the Report, titled People First.

The Report includes dozens of detailed reports by grassroots civil society organizations which prove that, while the poorest countries played no part in causing the crisis, they are in turn suffering its worst effects.  The exclusion of these countries in international forums such as the G-20 is an additional obstacle to the application of socially just policies.

According to the information compiled in the 61 national reports included in People First, job cuts, falling revenues of private pension funds and lower levels of remittances are contributing to a drop in the standard of living for people in both rich and poor countries alike.  However, developing countries are experiencing the brunt of the impacts of the crisis, which is further threatening their fragile economies and cutting off sources of foreign aid.  In countries such as Tanzania and Mozambique, economic recession in donor countries is putting at risk vital aid programs, which fund 42% and 50% of the respective national budgets.  In the Middle East, increasing costs for food staples and falling prices for its most important exportable commodity - oil- have pushed 43% of the Yemeni population into poverty.

In the thematic reports, People First condemns the fact that “despite the far-reaching consequences of financial policy measures, the inter-governmental bodies setting the agenda and designing financial reforms (…) limit participation from the majority of countries. The IMF and the World Bank for their part continue to be ruled by principles regarding decision-making that confine developing countries to a marginal role and limit transparency”.  Likewise, the Report advocates for measures and processes that respect national policy space, and are consistent with internationally agreed standards and commitments, including those regarding women’s rights and gender equality.

In one of the global launches of the Report, which was held on September 25 in United Nations Headquarters in New York, a group of experts which included Richard Kozul-Wright of UN-DESA, Roberto Bissio of Social Watch, Sameer Dossani of Amnesty International and Elisa Peters of UN NGLS as moderator, discussed its contents.  These experts concluded that poverty and its exacerbation by way of the financial crisis is a global challenge that permeates entire sectors of society, in both developed and developing countries, and needs immediate action and attention from all governments.  The Social Watch Report affirms that government spending is a legitimate policy to confront the crisis.

The panelists also discussed the notion that the space to find solutions to this crisis and its impact on the well being of large segments of the global population is the United Nations which has the legitimacy that is lacking in other bodies like the G-20.  In addition, the panelists praised the report for bringing to light the critical aspects of the crisis which affects the most vulnerable in developing and developed countries alike.  “This is no longer a problem that only affects the bottom billion and Social Watch must be praised for bringing this to light,” stated Richard Kozul-Wright.  The panelists also focused on the importance to solving these global challenges and putting people first and their rights to health, education, and resources in order to live a life with dignity.

In another global launch which took place in Pittsburgh, USA on September 23 in conjunction with the most recent G-20 Summit, the panelists stressed the need to increase social investment as well as to provide sources of development finance without conditionalities, so that the poorest countries can implement stimulus packages in order to rescue their weakened economies.  Amitabh Behar of Social Watch India criticized the lack of accountability and transparency regarding the economic policies being implemented in his country in response to the crisis.  Tanya Dawkins of the Global-Local Links Project and Social Watch USA denounced how the financial crisis is further undermining the already weak social protection policies in the USA, leaving millions of people out in the cold, without jobs, unemployment benefits, health care, and in many cases, housing.

To conclude the event, Bhumika Muchhala of the Third World Network provided an analysis of the development finance policies of the G-20, comparing them with the proposals that have come to light in the framework of the UN.  In particular, she underlined the need to increase the allocation of IMF Special Drawing Rights for developing countries, as they are a non-debt generating source of financing.  Likewise, she highlighted the fact that the G-20 has not taken into account how the elevated levels of debt of poor countries are negatively impacting on their abilities to overcome the effects of the crisis.  In contrast, the UN, at its Conference in June on the financial crisis and its impacts on development, stated its support for possible “debt standstills” to help poor indebted countries that desperately need to implement contra-cyclical economic policies in order to stimulate growth in the short term.

In addition to these launch events in New York and Pittsburgh, groups of Watchers from around the world are already planning other events to launch the 2009 Social Watch Report in their respective countries.  The Social Watch national coalitions in Bangladesh, Chile, Colombia, Germany, Ghana, Guatemala, Paraguay, Peru, and Uruguay, among other countries, have already fixed the date of their launch events.  In addition, for the first time, the complete text of the Social Watch Report will also be available in French and Arabic, with launches of these versions scheduled for late 2009.  These launch events are a key opportunity to remind governments and multilateral institutions that they should focus first on people in the moment of implementing their anti-crisis policies and incomk generating proposals to restructure the world financial system, to prevent future crises from occurring.

To download the complete text of the Social Watch 2009 Report, see: http://www.socialwatch.org/node/799.

For additional information on launch events of the 2009 Report, see the events calendar in this e-bulletin.