Unions and Poverty Reduction Strategy Papers an overview Are Poverty Reduction Strategy Papers just a &quot;re-morphing&quot; of previous neo-liberal policies? Many of the national experiences described in this issue of Labour Education seem to support that view. Unions must engage effectively to ensure that poverty reduction really helps the poor. Claude Kwaku Akpokavie Bureau for Workers' Activities ILO I n 1999, the Bretton Woods institutions (IMF and World Bank) adopted Poverty Reduction Strategy Papers (PRSPs) as the basis of all concessional aid and debt relief for low-income countries. To date, some 52 countries have formulated Interim PRSPs or Full PRSPs which outline macroeconomic and social programmes to reduce poverty. In this regard, PRSPs have become the main framework of development policy at the national level. According to the World Bank and the IMF, PRSPs are supposed to be guided by the principle of country ownership through a participatory process involving civil society. They should be resultsoriented, comprehensive in scope and partnership-oriented, and should involve long-term planning. It is in this context that <a href="/keyword/trade-unions/" >trade unions</a> and a host of civil society organizations and institutions have engaged in PRSP processes in low-income countries. This overview article will seek to situate the specificity of PRSPs within the historical evolution of development policies, broadly assess the involvement of <a href="/keyword/trade-unions/" >trade unions</a> in poverty reduction strategies and identify a number of lessons learnt from this participation. The return of the poor PRSPs cannot be isolated from the historical changes and continuities of dominant development policy. Indeed, in many ways, the PRSP approach integrates lessons learnt from previous development strategies and, theoretically at least, it tries to address the limitations and weaknesses of some past development policy options. Schematically, three defining phases in development policy may be identified the modernization phase of the 1950s and 1960s; the Basic Needs period of the 1970s; and the Washington Consensus period of the 1980s and 1990s.1 The challenge of post-war reconstruction provided the theoretical basis which was to be applied to developing countries. The modernization theories that dominated much of development policy in the 1950s and 1960s placed the accent on economic growth within a broader policy framework of an interventionist role for government and a dualistic approach to development in terms of stages of evolution of traditional society towards a modern consumer society. Development was therefore a process of modernization and industrialization and the problem of poverty was to be addressed through the spillover of the benefits of economic growth and the diffusion of the values of modernization. The limits and contradictions of the logic of modernization, coupled with the critique 1 of dependency theories (which explained underdevelopment in terms of the exploitation of the South by the North), prepared the way for a greater consensus on the linkages between economic growth and redistribution. Poverty thus became central in development policy-making and development strategies became increasingly oriented towards the satisfaction of the &quot;basic needs&quot; of the population. Basic needs two approaches By the mid-1970s, two schools of thought were emerging. The first current, which was led by the ILO, sought to deal with the challenge of development through employment creation, poverty reduction and active policies of redistribution at both national and international levels. On the other hand, the second current, under the leadership of the World Bank, sought to address development through the provision of basic needs, but within a framework of the doctrine of interdependence and with a focus on the linkages between &quot;national security&quot; and development. This strategy against poverty sought also to correct what was perceived as an &quot;urban bias&quot; in development policy, which was favouring protectionist import-substitution industries. For this current, <a href="/keyword/trade-unions/" >trade unions</a> were beneficiaries of these privileges which, if eliminated, would reduce the disparities between the urban and rural areas. The privileges of the urban worker (such as cheap food policies and rigid labour laws) had to be removed, and the best way to deal with rural poverty was to integrate the rural poor into the world market. These issues were to prefigure the policy debates of the 1980s. Despite the differences in both currents, one can conclude that the Basic Needs period saw the poor emerge as the centre of the preoccupations in development policy. Back to trickle-down: The Washington Consensus This period was, however, short-lived, as by 1980 the dominant consensus was shifting away from basic needs to a market-based liberal approach. Stabilization and the structural adjustment policies that followed began to focus on government failures, getting prices right and creating an enabling environment for the efficient functioning of the (global) market. With the end of the Cold War and the rise of globalization, these policies became incarnated in the Washington Consensus, based on fiscal discipline, a reordering of public expenditure for growth, deregulation, privatizations and the liberalization of trade, exchange rates, foreign direct investment regimes and prices. In this period, development was to be achieved through a return to the disciplines of the Washington Consensus and poverty had to be dealt with through trickle-down mechanisms as well as measures to mitigate the social consequences of adjustment. From structural adjustment to PRSPs The economic and socio-political structures at national and international levels determine the shifts and turns in development policy. By 1999, these structural determinants were signalling the need for a change of policy direction. Stabilization and the structural adjustment policies of the Bretton Woods institutions were having little impact on global poverty and inequalities. Therefore, pressure was building up on the international financial institutions (IFIs) to heighten the poverty impact of aid and lending. Furthermore, their own research was pointing to the need for a comprehensive approach to poverty reduction. The emergence of an international civil society, which was vocally criticizing the dominant neo-liberal policies of the IFIs, was increasing the crisis of legitimacy of the World Bank and the IMF. The structural adjustment period itself had been severely criticized 2 for imposing uniform policies of the IFIs on countries without any consultations whatsoever. Furthermore, the end of the Cold War had created a climate for a more objective assessment of the economic policies being championed by the IFIs. These different factors, which had built up particularly in the 1990s, led to the adoption of PRSPs by the Bretton Woods institutions in 1999. PRSPs therefore constitute the return of poverty as a central concern in dominant development policy. PRSPs represent yet another shift in dominant development strategy. The shifts over time in development policy underline the fact that no policy paradigm is eternal and hence there are no guarantees for a medium- or longterm commitment to the PRSP approach. These changing patterns of dominant development policy nonetheless shared one common element, namely economic growth as a central strategy for development and poverty reduction. The persistence of extreme poverty over the decades illustrates the limits of growth in dealing with poverty reduction, and stresses the need for integrated development strategies that tackle the structural roots of poverty. Union involvement in PRSPs participation issues PRSPs have posed at least three levels of challenge to <a href="/keyword/trade-unions/" >trade unions</a> , namely in terms of participation in the process, ensuring pro-poor content of poverty reduction strategies and, above all, poverty reduction outcomes. During the 1980s and 1990s, <a href="/keyword/trade-unions/" >trade unions</a> were vocal in condemning agreements reached in back rooms between ministries of fi nance and the Bretton Woods institutions without negotiations or even consultation with unions. When PRSPs were launched, <a href="/keyword/trade-unions/" >trade unions</a> generally welcomed the new commitment to the poor by the Bretton Woods institutions and saw the participatory process as a means of ensuring reforms in national socio-economic policy. However, as the various country studies in this issue of Labour Education amply demonstrate, the experience of trade union participation in PRSPs has been very diverse. As a result of previous experiences with governments and the Bretton Woods institutions, some unions have been sceptical of the usefulness of participation in the process at all. Lack of transparency in many countries has forced <a href="/keyword/trade-unions/" >trade unions</a> to be cautious, for fear of legitimizing unfavourable outcomes or committing limited resources to a process whose outcome was uncertain. Many other unions who eagerly opted to participate have had to face different obstacles that undermined the quality of the participatory process. As illustrated in the country case studies, obstacles to participation range from deliberate government marginalization of <a href="/keyword/trade-unions/" >trade unions</a> to cosmetic involvement of unions and to the lack of capacity of the unions themselves to engage. This &quot;participation gap&quot;, which still has to be filled to make PRSPs really country-owned, is further undermined by a number of other factors. Firstly, the tendency by governments to exclude the macroeconomic framework of PRSPs from the participatory process. This no doubt undermines the credibility of the participatory process and reduces it to a mechanism for poverty assessment and for channelling resources to targeted groups or sectors. Some have rightly argued that the PRSP process contains many innovations vis- -vis the structural adjustment period, such as the PRSPs' emphasis on country ownership and a broad-based participatory process including the poor. However, what is important in assessing whether PRSPs are a real change in development strategy or not, is to identify the determinant policies guiding poverty reduction strategies. In this regard, the macroeconomic framework of PRSPs and the &quot;conditionalities&quot; attached to aid and debt relief constitute the determinant indicators of the real nature of PRSPs. The evidence thus far tends to suggest that unless there is a radical change in the fundamental macroeconomic framework 3 of PRSPs, and this is made part of the participatory processes, the very credibility of PRSPs will be undermined. A second obstacle in the participatory process relates to country ownership. While this may appear revolutionary in theory, the practice has shown that governments have tended to formulate PRSPs with an eye to the fact that the Executive Boards of the Bretton Woods institutions would have to endorse them. This has tended to mean that, at best, PRSPs become a more collaborative effort between governments and the IFIs or, worse still, they are &quot;tropicalized echoes&quot; of what the governments know the IFIs want to hear. Hence, PRSPs often lack the flexibility needed in order to address local specificities. Furthermore, &quot;conditionalities&quot; and the exclusion of macroeconomic policies from the participatory process further undermine the principle of country ownership of PRSPs. As a result, poverty reduction strategies lack the boldness needed to tackle the root causes of poverty. A third problem area has been in the post-formulation stage of PRSPs, where the participation of <a href="/keyword/trade-unions/" >trade unions</a> and civil society organizations has tended to be particularly weak. In many instances, this has been because governments have tended to limit the participatory process to the formulation phase. However, weak institutional capacity and scarce resources also make it difficult for many unions to participate in the monitoring and evaluation of PRSPs. In some countries, though, unions have managed to work with broader coalitions of other organizations to monitor PRSPs. Given the scale of the task, this is placing new demands on unions as they begin to develop indicators and undertake budget monitoring. In these countries, access to detailed and up-to-date governmental information continues to be a major challenge. Despite the problems enumerated above, the inclusion of a participatory process offers new opportunities for engagement that were hitherto non-existent. The engagement, that is, of governments but increasingly also of IFI country representatives. The participatory process also 4 offers possibilities for addressing the broad socio-economic policy issues that unions have always been advocating. Furthermore, it provides opportunities for building broader alliances of progressive organizations working on poverty reduction. Finally, it gives scope for working towards the institutionalization of social dialogue on wider socio-economic policies. Union involvement in PRSPs content issues If, in the early stages of PRSPs, the issues around participation took on great importance for <a href="/keyword/trade-unions/" >trade unions</a> as more and more PRSPs were formulated, the content of PRSPs has become the driving issue for trade union involvement. Several policy issues regarding the content of PRSPs have been of particular concern to <a href="/keyword/trade-unions/" >trade unions</a> . A first major area relates to the underlying macroeconomic framework of PRSPs. A key issue at this level is whether the macroeconomic policies being pursued under PRSPs differ significantly from previous stabilization and structural adjustment policies. Given trade union criticism of the structural adjustment programmes of the past, the answer to this question seems to be a test of the credibility of the PRSP approach. In a number of countries, it is still a bit too early to make a defi nitive judgement on this question. However, based on the PRSPs being implemented, it is increasingly clear that PRSP macroeconomic policies largely draw on the fundamentals of structural adjustment programmes. This conclusion, which is echoed in Kamran Kousari's article (p. 59 in this issue of Labour Education), undermines the credibility of the PRSP process and of the poverty reduction outcomes to be expected. Another area of concern for unions has been that PRSPs have tended to focus on economic growth, and not sufficiently on issues of equity. If it is widely accepted that sustained levels of high growth play a key role in poverty reduction, it is equally accepted that this is not enough. A whole range of other factors come into play. One of these concerns the actual &quot;quality&quot; of the growth in terms of poverty reduction. In this regard, the issues raised by Rizwanul Islam (p. 65) in terms of the pattern, source and distribution of growth are crucial if growth is to lead to poverty reduction. A second group of factors relates to the issue of equality. As clearly demonstrated in the article by Rolph van der Hoeven (p. 83), equality matters in relation to accelerating poverty reduction but also in terms of generating higher levels of economic growth. So structural issues like land reform, equal opportunity and access to productive resources have to be addressed in poverty reduction strategies. A key issue in this area is gender. The feminization of poverty over the years poses the crucial question of how gender is dealt with in PRSPs. A third area of concern to unions has been the general lack of integration of employment and labour market issues in PRSPs. On the one hand, this reflects one of the fundamental weaknesses of the PRSP approach itself since very limited importance has been given by the Bretton Woods institutions themselves to the role of employment in poverty reduction. On the other hand, it has also been a reflection of the limited involvement of <a href="/keyword/trade-unions/" >trade unions</a> in earlier PRSPs. However, with the increasing engagement of <a href="/keyword/trade-unions/" >trade unions</a> and the ILO in these processes, this concern is slowly being addressed. A fourth policy area of concern for unions has been in relation to the linkages between rights and poverty reduction. A meaningful participatory process necessarily implies the full respect of freedom of association. In countries where the State exercises control over unions and other civil society organizations, the PRSP participatory process has basically been window-dressing. Resistance to a rightsbased approach to PRSPs has often been on the grounds that these rights negatively affect the comparative advantages of developing countries, particularly in relation to international trade competitiveness and the attraction of foreign direct investment. A critique of these apprehensions is forcefully developed by David Kucera (p. 91). However, there must be no doubt that resistance to a rights-based approach to development policy is also due to the fact that human rights, and specifically freedom of association, strengthen the weak and the poor. This point is important because development policy is not neutral and is the result of an interaction between unequal internal and external actors. Freedom of association, for instance, strengthens the hand of the poor in this interaction among unequal actors. Organization and collective action transform the poor from objects of development policy-making to actors who intervene in the shaping of the development agenda. Hence the deliberate strategy, in certain quarters, of attacking freedom of association. A growing body of literature, which cannot be reviewed here, indicates the neutral or positive impact of the respect of rights on poverty reduction. It should, however, be emphasized that, as well as core Conventions, all the other ILO Conventions have a bearing on poverty reduction. Some of the Conventions that are particularly related to PRSPs include those dealing with employment such as the Employment Policy Convention, 1964 (No. 122), and the Human Resources Development Convention, 1975 (No. 142); with social policy and dialogue namely the Social Policy (Basic Aims and Standards) Convention, 1962 (No. 117), or the Tripartite Consultation (International labour Standards) Convention, 1976 (No. 144); with social protection (like the Social Security (Minimum Standards Convention), 1952 (No. 102), the Occupational Safety and Health Convention, 1981 (No. 155), the Protection of Wages Convention, 1949 (No. 95), the Labour Inspection Convention, 1947 (No. 81), and the Maternity Protection Convention, 2000 (No. 183), as well as social economy instruments like on Promotion of Cooperatives Recommendation, 2002 (No. 193), and the instruments targeted at specific groups, such as indigenous and tribal peoples and migrant workers. 5 However, the important point to emphasize in the debate on rights and poverty reduction is that human rights are first and foremost inalienable rights that have to be applied in and of themselves. Any socioeconomic benefits to be obtained from the observance of rights should therefore be considered as spin-offs from a fundamental obligation placed on States and other actors. The economic arguments in favour of the application of rights must not undermine or sideline the more fundamental purpose of human rights, namely to protect and promote human dignity and social justice. A fifth area of concern for unions in PRSPs has been the whole range of traditional issues with which they are confronted on a daily basis. The persistence of neo-liberal policies, such as rampant privatization, is a case in point. The &quot;conditionalities&quot; which are still an integral part of debt relief and concessional lending have led to a continuation of privatizations of essential public services without due analysis of the impact on the poor. This, coupled with the negotiations on services within the World Trade Organization, is raising fundamental questions about the access of the poorest to essential public services such as water. This preoccupation, highlighted in the article by Mike Waghorne and Wendy Caird (p. 97), shows the &quot;dual carriageway&quot; nature of PRSPs which seek to reduce poverty and yet take macroeconomic policy options that undermine the ambition to reduce poverty. Yet another traditional area of trade union action has been in relation to wages and incomes policy. Catherine Saget's article (p. 111) shows both the potential and the limits of minimum wages as an instrument of poverty reduction. Labour market flexibility is still part of the agenda being pursued aggressively in some regions by the IFIs. Here again, questions may be raised about its social impact and compatibility with the objectives of PRSPs. Another issue of interest to unions has been how to widen traditional social dialogue processes in a country in order to slowly institutionalize social dialogue on socio-economic policy as a whole. 6 Giuseppe Casale's article (p. 103) demonstrates the contribution of the ILO to this process. Other issues being monitored by unions include pension reform and civil service reforms, both of which are policies currently being implemented. This overview of trade union concerns on the content of PRSPs highlights the fact that, for PRSPs to truly reduce poverty in low-income countries, there needs to be a radical departure from the reductionist policies of the past which have narrowed down sustainable human development to the accumulation of capital and economic growth. This has been reflected in the debates on development policies over the years. However as the Social Policy (Basic Aims and Standards) Convention, 1962 (No. 117), reminds us, &quot;The improvement of standards of living shall be regarded as the principal objective in the planning of economic development&quot;. Trade union concern over the content of PRSPs is both a platform for the defence and promotion of their members' interests and a commitment to fight for the interests of the working poor and for a more inclusive and just development model. Some lessons learnt Since the engagement of unions in PRSPs, a number of precious lessons have been learnt. One of these is certainly that participation involves risks and opportunities for unions. Risks because of the dangers of legitimizing unfavourable outcomes, but opportunities in terms of advancing trade union objectives of social justice in society. If, in the early stages of PRSPs, a focus on the risks and obstacles of governments dulled the enthusiasm of some unions for engaging in the process, today the trend is to focus on the opportunities that PRSPs offer to further the trade union mission. At the same time, this involvemen...