World Bank backs trade unions

In a dramatic move away from its traditional adherence to free-market doctrines, the World Bank has embraced trade unions.

Its latest annual development report, published yesterday, concludes that unions, collective bargaining and government intervention in the labour market can increase prosperity for the world's poor.

In another departure, World Bank teams involved in arranging loans for developing countries will now consult representatives of workers about proposed loan conditions and projects.

However, the report, Workers in an Integrating World, has been condemned by development activists. They accused the bank of hypocrisy because it criticises some unions and opposes including minimum labour standards in international trade agreements.

The report argues that tackling low incomes, poor working conditions and insecurity can help reduce poverty and foster economic growth.

Alongside the classic World Bank advice to liberalise trade and adopt free-market policies in other areas, it recommends intervening in the jobs market.

Michael Walton, who directed the report, said: "The issue is not deregulation but sensible re-regulation of the labour market."

The most surprising change of tack is the World Bank's support for collective bargaining and a role for unions, which it now says can help raise workplace productivity and reduce inequality.

But it criticises unions that protect a minority of well-off workers at the expense of others. "Where they exist in systems where patronage or protection is the norm, they will do their best for their members in getting a share of the gravy," Mr Walton said.

The report cites countries such as Kenya and Malaysia, where only a small proportion of the labour force is unionised, as examples.

The World Bank also recommends legal protection for vulnerable groups of workers. This would include an all-out attack on child labour - its legal prohibition, an expansion of subsidised education and extra help for the poorest families forced to send their children out to work.

Yet it strongly rejects demands - by the UN's International Labour Organisation among others - for minimum labour standards in international trade agreements.

The World Bank reckons big countries would exploit such standards as an excuse for protectionist measures against small ones.

Karen Hansen-Kuhn of The Development Gap, a group based in Washington, disagreed.

She said of the World Bank: "They live in a fantasy world in which those profits translate into better wages and working conditions rather than in the real world of very unequal power relations between local unions and increasingly trans-national capital."

In line with its normal free-market conclusions, the bank sees continuing progress towards free trade with no strings attached as holding the greatest hope for poor countries.

It says trade is good for workers: the countries with the highest ratio of exports to gross domestic product have enjoyed the most rapid growth in wages.

Mr Walton challenged the view that the growth of exports from the third world was responsible for high unemployment and low wages in industrial countries, arguing that the benefits of more trade would outweigh the costs for both groups.

"This period could be the beginning of a new golden age," he said.

News
people
News
people
Arts and Entertainment
Hand out press photograph/film still from the movie Mad Max Fury Road (Downloaded from the Warner Bro's media site/Jasin Boland/© 2014 Warner Bros. Entertainment Inc.)
films'You have to try everything and it’s all a process of elimination, but ultimately you find your path'
Life and Style
food + drinkFrom Mediterranean Tomato Tart to Raw Caramel Peanut Pie
PROMOTED VIDEO
Extras
Boys to men: there’s nothing wrong with traditional ‘manly’ things, until masculinity is used to exclude people
indybest13 best grooming essentials
Arts and Entertainment
Armstrong, left, and Bain's writing credits include Peep Show, Fresh Meat, and The Old Guys
TVThe pair have presented their view of 21st-century foibles in shows such as Peep Show and Fresh Meat
Arts and Entertainment
Keys to success: Andrew and Julian Lloyd Webber
arts + entsMrs Bach had too many kids to write the great man's music, says Julian Lloyd Webber
News
ebooksAn unforgettable anthology of contemporary reportage
Life and Style
healthMovember isn't about a moustache trend, it saves lives
News
i100
Arts and Entertainment
Imelda Staunton as Dolores Umbridge in the Harry Potter films
books

New essay by JK Rowling went live on Pottermore site on Friday

News
Russia Today’s new UK channel began broadcasting yesterday. Discussions so far have included why Britons see Russia as ‘the bad guy’
news

New UK station Russia Today gives a very bizarre view of Britain

Arts and Entertainment
Keira Knightley and Benedict Cumberbatch at the premiere of The Imitation Game at the BFI London Film Festival
filmsKeira Knightley tried to miss The Imitation Game premiere to watch Bake Off
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

The benefits of Recruitment at SThree...

£18000 - £23000 per annum + Comission: SThree: SThree, International Recruitme...

Trainee Recruitment Consultants

£20000 - £25000 per annum + OTE £35K: SThree: We consistently strive to be the...

Finance Assistant - Part time - 9 month FTC

£20000 - £23250 Per Annum pro rata: Clearwater People Solutions Ltd: Pro rata ...

Marketing Manager

£40 - 48k + Benefits: Guru Careers: We are seeking a Marketing Manager to join...

Day In a Page

Bryan Adams' heartstopping images of wounded British soldiers to go on show at Somerset House

Bryan Adams' images of wounded soldiers

Taken over the course of four years, Adams' portraits are an astonishing document of the aftermath of war
The drugs revolution starts now as MPs agree its high time for change

The drugs revolution starts now as MPs agree its high time for change

Commons debate highlights growing cross-party consensus on softening UK drugs legislation, unchanged for 43 years
The camera is turned on tabloid editors in Richard Peppiatt's 'One Rogue Reporter'

Gotcha! The camera is turned on tabloid editors

Hugh Grant says Richard Peppiatt's 'One Rogue Reporter' documentary will highlight issues raised by Leveson
Fall of the Berlin Wall: It was thanks to Mikhail Gorbachev that this symbol of division fell

Fall of the Berlin Wall

It was thanks to Gorbachev that this symbol of division fell
Halloween 2014: What makes Ouija boards, demon dolls, and evil clowns so frightening?

What makes ouija boards and demon dolls scary?

Ouija boards, demon dolls, evil children and clowns are all classic tropes of horror, and this year’s Halloween releases feature them all. What makes them so frightening, decade after decade?
A safari in modern Britain: Rose Rouse reveals how her four-year tour of Harlesden taught her as much about the UK as it did about NW10

Rose Rouse's safari in modern Britain

Rouse decided to walk and talk with as many different people as possible in her neighbourhood of Harlesden and her experiences have been published in a new book
Welcome to my world of no smell and odd tastes: How a bike accident left one woman living with unwanted food mash-ups

'My world of no smell and odd tastes'

A head injury from a bicycle accident had the surprising effect of robbing Nell Frizzell of two of her senses

Matt Parker is proud of his square roots

The "stand-up mathematician" is using comedy nights to preach maths to big audiences
Paul Scholes column: Beating Manchester City is vital part of life at Manchester United. This is first major test for Luke Shaw, Angel Di Maria and Radamel Falcao – it’s not a game to lose

Paul Scholes column

Beating City is vital part of life at United. This is first major test for Shaw, Di Maria and Falcao – it’s not a game to lose
Frank Warren: Call me an old git, but I just can't see that there's a place for women’s boxing

Frank Warren column

Call me an old git, but I just can't see that there's a place for women’s boxing
Adrian Heath interview: Former Everton striker prepares his Orlando City side for the MLS - and having Kaka in the dressing room

Adrian Heath's American dream...

Former Everton striker prepares his Orlando City side for the MLS - and having Kaka in the dressing room
Simon Hart: Manchester City will rise again but they need to change their attitude

Manchester City will rise again but they need to change their attitude

Manuel Pellegrini’s side are too good to fail and derby allows them to start again, says Simon Hart
Isis in Syria: A general reveals the lack of communication with the US - and his country's awkward relationship with their allies-by-default

A Syrian general speaks

A senior officer of Bashar al-Assad’s regime talks to Robert Fisk about his army’s brutal struggle with Isis, in a dirty war whose challenges include widespread atrocities