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ITUC calls on World Bank to complete overhaul of Doing Business Report

4 November 2010: According to Global March Governing Board member, the International Trade Union Confederation (ITUC), the 2011 edition of the World Bank’s Doing Business report includes a welcome first step for revising the report’s past practice of encouraging countries to dismantle labour and social regulations, which it did by granting its best ratings to countries with the lowest levels of workers’ protection.

Doing Business 2011 has removed the “Employing Workers Indicator” (EWI) from the “Ease of Doing Business Index” and country rankings, although the basic data from which the EWI is calculated remains in an annex to the report. The Bank has furthermore “instructed staff not to use the [EWI] indicators as a basis for providing policy advice or evaluating country development programs or assistance strategies”.

ITUC General Secretary Sharan Burrow invited the World Bank to complete the process of overhauling Doing Business. She pointed out that: “By considering labour regulations only from the view of whether they are deemed to be good for business, the World Bank has caused enormous damage to workers by advising borrowing countries through its highest-circulation publication that labour standards should be dispensed with. The global economic crisis has made clear that well-designed and enforced labour regulations and social protection are essential for securing employment and for providing adequate income for those who lose their jobs. The Bank should carry through on the positive step it has made in Doing Business 2011 by removing the EWI from all future editions and, instead, adopting policies on labour issues that recognise and reward the importance of adequate labour regulations and comprehensive social protection.”

The ITUC noted that even though the report’s annex on “Employing Workers” speaks positively of countries that provide financial support for reduced working time programmes designed to prevent lay-offs or that have increased unemployment benefits, it penalises countries that require any sort of contribution by employers for unemployment insurance, workmen’s compensation, old-age pensions, maternity leave or other social protection programmes.

Through its “Paying Taxes Indicator”, which has not been modified in Doing Business 2011, the Bank continues to advocate that business should be exempt from all forms of taxation, whether it be corporate income tax, property tax, social security contributions, property tax, capital gains tax or financial transactions tax.

“At a time when countries around the world are facing huge fiscal crises as a result of the global recession even though corporate profits have surged back, it is not just retrograde but simply irresponsible for the World Bank’s highest-profile report to be promoting the idea that companies should not have to pay one cent of tax or social contribution,” said Burrow.

To download an executive summary of the 2011 Doing Business report, click here

Source: ITUC