September 6 2006 - The International Confederation of Free Trade Unions (ICFTU) has strongly criticized the 2007 edition of the World Bank publication, Doing Business, prepared by the private sector development department. This declares the Marshall Islands to be the world's 'best performer', displacing last year's winner, Palau. Both are tiny Pacific island nations that are not among the 179 member countries of the International Labour Organization (ILO). As such they are not obliged to abide by the organization's core labour standards: elimination of forced labour, child labour and discrimination; and respect for freedom of association and right to collective bargaining.
Guy Ryder, general secretary of ICFTU, commented that World Bank presidents have expressed support for ILO core labour standards as being consistent with the Bank's development mission. He therefore finds it ironic that Doing Business is promoting countries that offer almost no protection for their workers. ICFTU claims that both nations 'allow workers to be forced to work up to 24 hours per day and up to seven days per week and require no vacations or advance notice for dismissal'.
Another division of the World Bank, the International Finance Corporation, stipulates that it will not lend to firms not applying the core labour standards. However, Ryder noted that earlier editions of Doing Business have been used in World Bank and International Monetary Fund (IMF) strategy documents to force countries to abolish various kinds of protection for their workers. For example, a recent World Bank economic memorandum to Colombia made it a condition for loans that the government make hiring and firing decisions more flexible. This was to improve its Doing Business indicators, even though the economic impact of the strategy is uncertain.
Similarly, the IMF recently recommended that the South African government should improve its Doing Business indicators by 'streamlining' its hiring and dismissal procedures. These changes would have required doing away with affirmative action policies implemented by post-apartheid governments to correct the legacy of decades of racial discrimination.
Guy Ryder said:
"The World Bank should get its message straight. If the Bank truly believes that the ILO's core labour standards are good for development, it can't turn around and praise countries that don't join the ILO and don't respect the core standards as the world's 'best performer' for their labour standards. The Bank should remove the mandate of labour market regulation from the department that prepares Doing Business and stop using Doing Business as the basis for its labour market reform proposals."