WEF co-chair: Greed is still the economic engine
Sharan Burrow, general secretary of the International Trade Union Confederation (ITUC), speaks during a press conference in Seoul, South Korea on 10 November 2010, urging members of the upcoming G-20 summit to discuss job security and poverty issues. (File photo: EPA/Yonhap)
In an increasingly fractured world, change will not happen if the current model of corporate greed continues to dominate the future, 2018 World Economic Forum co-chair Sharan Burrow told EPA's partner EURACTIV in an exclusive interview.
Sharan Burrow is the General Secretary of the International Trade Union Confederation (ITUC), a former President of the Australian Council of Trade Unions (ACTU) and one of the seven co-chairs of the 2018 World Economic Forum.
She spoke to EURACTIV editor-in-chief Daniela Vincenti, ahead of the opening of the 48th annual meeting of the World Economic Forum in Davos on Monday (22 January).
As one of the seven co-chairs of this year’s World Economic Forum, what are your expectations for next week’s WEF, now that we know that President Donald Trump and President Emmanuel Macron are coming to Davos?
The challenges exist irrespective of the political heads of state. We are living in an increasingly fractured world: the authoritarianism even in democratic countries, the increase in dictatorship and the increase in militarisation are adding up to shrinking democratic space. And a world that is now looking at the possibility even of nuclear war. This is a framework for potential devastation.
When you add that to the global risks which already exist – an economic model that has failed working people, a wave of misogyny that has further excluded women from the mainstream of equality, the question of a dominant model of low wages, insecure and unsafe work, distrust and the retreat into nationalism led by some leaders like Donald Trump – that actually is rendering the global economy even more unstable.
Meanwhile, people are growing increasingly distrustful of all global institutions, whether it is global economy, multi-national, multilateral organizations, and their own government. We see a fractured world. It is not a base on which to build a future, unless we have people committed across government, business, civil society and unions to sit down and negotiate global solutions. And those global solutions have to be based on the sustainable development goals, which include jobs and decent work, fundamental human rights, equality for women and sustainability with the elimination of poverty.
Last year, leaders in Davos agreed to more redistribution of wealth in order to fight the growing inequality caused by globalisation. One of the other WEF co-chairs, Christine Lagarde, warned years ago about the impact of rising inequality but remained mostly unheard. As this seems to have changed now, do you see any tangible results since January 2017?
Public statements about risk have indeed been part of the analysis. But her institution has recommended austerity at every turn. They have attacked wage policies, they have attacked social protection. As recently as just a few months ago, the IMF’s advice to Iran was more of the same and people in Iran are now on the streets, because they do not trust governments, whether it is the current government or the reformists and they do not have the security of good jobs, of wages on which they can live with dignity, they are fighting for themselves and their children.
Lagarde’s statements, although accurate on climate, on inequality, on women, are not the whole picture. Her own institution is still demanding conscriptions of governments on an economic and social front which is actually a part of the problem.
It is not just the IMF, if you look across their multi-national institutions; you see the threat to the WTO and the very heart of international trade. We believe that the WTO has failed, because of the lack of political courage to actually deal with some of the issues like human rights, labour rights and environmental standards. Nevertheless, it is the institution that should be charged to do this and now it is in fact very vulnerable. When you look at the fracturing of political space at the national level, when you look at the vulnerability and, indeed, the lack of trust people now have in their multi-national institutions, we need to find negotiated solutions.
But do you have the feeling that everything is a bit repetitive? They come together, they decide something, then they go back home and change does not happen as the courage is not there to implement what has been agreed.
Change will not happen if the current model of corporate greed continues to dominate the future. The world became three times richer in the last three decades. And yet: When 84% of the worlds’ people cannot live on the minimum wage, when people are deeply anxious about employment and the security of employment, when you have major corporations – particularly American corporations – refusing to bargain with their workers to share productivity, then that level of greed is not just creating the one percent and vast inequality, it is putting the very economic model that these corporations have demanded in their own interests at risk.
We know you have to change the rules and in fact, polling shows that 85% of the world’s population says you have to change the rules. And if you read the Global Risk Report, released by the World Economic Forum, it shows that they are simply deepening the already fractured world we live in. They are not just risks anymore; many of them are now having a serious impact. We need to change, we need a different future or the model of a world where we can be confident around an integrated future, where everybody has confidence to actually be part of our economy and society.
For change, there needs to be leadership. With the election of Macron, we might have experienced this in a way, as he has completely uprooted the old political system and is trying to rebuild trust. Do you think there is a new type of leadership emerging?
Democracy has to have the confidence of the people. You have to ask the question, whether his leadership in Europe is respected. If we do not have robust democracy, if we are not able to contest ideas, then ultimately democracy fails.
And while I am confident that the robust nature of debate and ideology in France will save the day, I must say – when you look at the statistics in the US and other places, even in my own country Australia – that young people are not seeing the dividends from democracy, their world is very insecure.
They are disappointed by the fact that we no longer fund university education or adequately fund school education or our healthcare systems so that everybody has equal access. They are walking away from democracy at best. But they are actually distrustful of democracy in their own interests, at worst.
Democracy may be fluid, but if we are not conscious that it’s not a celebrity contest, it has to be a contest of political ideas and solutions and that there are some areas of work on which we need unity across political parties to create a future we can all agree with as a foundation, then we’re in trouble.
If you look at our global supply chains now, 94% of the workforce is a hidden workforce. They see how the major corporations take no responsibility, it is a low wage, insecure, often unsafe framework and we are even seeing slavery and informal work appear.
Now, those same CEOs will argue that they don’t have to take responsibility for their own due diligence to see that the profits are not made from the depravity of working conditions that no one would want their families to have to endure. I have worked with a group of CEOs who say, “We’re not perfect but we know the world has to change.” You know there is commitment to a new social contract from the business and the sustainable development commission. I was proud of that contract. But these are few, few companies.
So, if you cannot change the global economic model, if you cannot reinvest in people having a say through their democracy then it begs a whole set of questions about the inclusion of people for the future. We believe that peace and democracy are collateral damage of an increasingly fractured world. We have the solution, it is sustainable development goals, it is the Paris peace agreements, they char our course towards a zero poverty, zero carbon world.
Finland has started testing a universal basic income. Do you think that would be a way to restore some kind of equality?
In countries like Finland, their equality is driven from the fact that they have health, education, childcare, age care – they have essential social protection and vital public services frameworks. If, in addition to that, they could create the sheer prosperity from a tax base where corporations pay tax, people pay tax, then that is a very good model to consider.
But, what if we are going to give people a small amount of money from the public purse and then that absolves governments from responsibility for health and education, child care, age care – the essential social protections and public services for which people pay tax in the first place? If corporations will not pay tax – either because there are the informal platform businesses of the new economy that do not pay tax anywhere or they are old corporations that have learned how to evade tax – then it is not affordable.
It is conscience cleaning, that’s what you are saying…
A few dollars in basic income versus the amount of redistribution possible when people build a collective society: they do not add up. The provision of the idea is fantastic as an additional shared element of prosperity, but it is a terrible idea for what it does is replace the social fabric of the guarantee of pensions, unemployment benefits, and those kinds of public services.
As an Australian who lives in Europe and is witnessing a changing European Union, if you had to explain to your compatriots in Australia, or elsewhere in the world, how the EU is changing, what would you point out as the EU’s strengths and weaknesses?
The traditional strength of the EU is the social model. If you can build the model of economy and society on shared prosperity, on fundamental rights, on dialogues and social inclusion, then that is the society you want.
The Nordic countries are still the most advanced, but Europe has actually built that model in principle. From 2010 at the G20 onwards, when they in fact decided that they had to engage in a round of austerity, you have seen that social model breaking down. And just last year, we saw a turnaround with the endorsement of the social pillar. Of course we need to see the social protocol and the legacy base that comes off of it. But that was the first indication that European politicians understand that they walked away from the fundamental social model that ensured people’s rights, inclusion to social protection, a good wage model that shared productivity through collective bargaining and social dialogue.
Hopefully, they are building it back up, because if the American corporate model wins, then we will have more of the same: people will retreat more and more into nationalistic solutions which once worked and you will see even more fracturing, and that is a disaster in a world that is already seeing such a risk of peace and democracy simply being collateral damage, of a world where people no longer matter.
That the corporate model has created such inequality that people do not see any secure future for themselves. 85% percent of the world’s people now say that they want the rules of the global economy rewritten. They know the world would be a better place if governments acted together, but they want the rules rewritten. Our method to Davos is twofold: change the rules, let’s secure a future. But for those people who have the courage, the small number of government leaders, the corporate, civil society and union leaders who have the courage and the commitment to push for a different model, raise your hand if you are prepared to be part of a negotiation on global solutions.