March 24, 2010: Human rights responses to the global economic crisis

Publish Date: 
Wednesday, July 25, 2012

UN Non-governmental Liason Service (NGLS), March 24, 2010

At the opening of its 13th session on 1 March 2010, the UN Human Rights Council held a high-level panel discussion on the impact of global economic and financial crises on realization of human rights. The panel was designed to provide a formal contribution to the Working Group of the General Assembly on follow-up to the outcome of the June 2009 UN Conference on the World Financial and Economic Crisis and its Impact on Development (see NGLS Roundup 137).

The high level panel showed strong convergence on what UN High Commissioner for Human Rights Navi Pillay described as the need for an "urgent shift" to ensure that stimulus packages and rescue operations do not just salvage the financial system and restore economic growth, but also directly address how individuals are affected, especially in their access to employment and social services. ILO Director-General Juan Somavia raised the same political problem: "How come there is money to rescue big banks and support economic recovery, but when it comes to job recovery, we don't have the money - we are told to wait another five years.... As fiscal constraints begin to emerge, there is a risk of backsliding to the same old recessionary policies of the past."

South Centre Executive Director Martin Khor urged governments facing tighter budgets - which imply a trade-off about what to cut - that the trade-off should "always side with human rights: protect jobs and social services rather than narrow commercial interests." In the same vein, former Secretary-General of Amnesty International Irene Khan emphasized that human rights constitute the "ethical benchmark" or "moral compass" for testing the validity and effectiveness of any stimulus packages and other short- or long-term measures adopted by governments in response to the crisis.

Lessons from the crisis

These issues were discussed in greater depth at a Human Rights Council side event, Human Rights Response to the Global Economic Crisis, organized by NGLS, the Center for Economic and Social Rights (CESR) and ESCR-Net on 4 March. João Ernesto Christófolo, a government representative from Brazil (which together with Egypt took the lead on this Human Rights Council initiative) insisted on the UN's central role in responding to the crisis. Bringing in the human rights dimension must not only be about assessing impacts, but also shaping appropriate responses to the crisis, he said.

Senior UNCTAD economist Richard Kozul-Wright emphasized that the underlying causes of the current crisis were rooted in a dominant policy paradigm of "market fundamentalism," reflected in widespread liberalization, deregulation and privatization policies - affecting not only the economy but other spheres of life, including health, education, or post-disaster reconstruction. The resulting "boom and bust" cycles of the last 10 or 20 years were an expression of the fragility of the system, characterized by the unsustainable accumulation of debt - notably to compensate for a deficiency in global aggregate demand caused in large part by a sharp growth in inequalities and rising shares of national incomes going to profits at the expense of wages. This policy orientation meant a "capture of state" that defended the rights of certain groups (financiers, corporations) at the expense of other groups. Human rights advocates, he said, thus have to be aware that behind market fundamentalism lies a "rights-based" agenda focusing on a specific category of rights, namely property rights (whether expressed in terms of low taxes for the rich, the right to make windfall profits through socially harmful speculation, or intellectual property rights), over and above other categories of rights. The challenge for the human rights community was how to rethink the role of the State and build a countervailing movement rooted in an alternative ethic based on social justice, solidarity and fairness.

Participants highlighted a range of measures that governments can do - even in the midst of the crisis - to change course. These included investing in a "social protection floor," making full employment an explicit macroeconomic objective, and re-regulating finance to discourage risky short-term speculation and reward long-term investments in productive employment and other social goals. While countries can use their existing policy space to pursue these objectives much more forcefully, many countries face limitations on what they can achieve on their own.

What does the duty to cooperate internationally imply?

Many participants highlighted that global economic crisis had heightened the importance of the duty of international assistance and cooperation, grounded in the UN Charter and human rights instruments such as the International Covenant on Economic, Social and Cultural Rights.

Irene Khan stressed that this duty, while legally well founded, is contested politically. Donor countries have a responsibility to respect, protect and fulfil economic and social rights beyond their jurisdiction. Various participants insisted that it is not simply a matter of providing more aid as a form of charity. There is an implication that the aid, trade, investment and foreign policies of more powerful countries "do no harm" in other economically weaker countries. When donors - or countries with dominant positions in international financial institutions - promote or condone conditionalities which in effect force recipient governments to implement policies that cause avoidable human rights retrogressions (whether related to the right to work, food, social protection, health care and education), these more powerful countries could be said to be in violation of their international human rights obligations.

At the high-level panel, Martin Khor had drawn attention to a little talked about right enshrined in the Universal Declaration on Human Rights, namely that "everyone is entitled to a social and international order in which the rights and freedoms set forth in this Declaration can be fully realized" (Art. 28). The crisis was yet another wake-up call that the current international financial architecture is prone to socially devastating crises and suffers from a "deflationary bias" whereby many countries are pressured by international financial markets and institutions to pursue recessionary policies when faced with fiscal and balance-of-payments difficulties. This is not compatible with the duties to protect and fulfil social and economic rights. Against pressures for a return to "business as usual," it was suggested that the many proposals for reforming the international financial architecture to support development and social justice could be strengthened if articulated in terms of international human rights obligations.

A pro-active human rights economic agenda

At the high-level panel, Irene Khan had noted that "the tendency of the human rights movement has been mostly to concentrate on monitoring violations of ESC rights - in other words, the aspect of 'respect' - such forced evictions or institutionalized discrimination in employment, education, or housing." Comparatively little attention has been given to assessing the impact of public policy on human rights. "This is partly because it is more difficult to pin down who is accountable for what," she said. But some groups, such as the Center for Economic and Social Rights (CESR), were beginning to analyse how human rights can guide economic policies, using multidisciplinary tools and methodologies.

In this respect, CESR Research Director Sally-Anne Way presented at the side event the results of an international NGO survey that undertook a human rights analysis of government responses to the economic crisis in a report entitled "Bringing Human Rights to Bear in Times of Crisis." She emphasiszed that the report emerged out of a rising concern amongst human rights organizations about the impacts of the food, fuel, housing, climate, water, care and economic crises on the realization of human rights, especially economic and social rights, and the fact that some governments have begun using the economic crisis as an excuse to further abdicate their human rights obligations.

She reiterated that human rights place legal obligations on governments to protect their citizens from harm, as well as to promote their wellbeing. The report therefore reminds governments, as primary duty-bearers of human rights obligations, are called on under international law, of their duties to respect, protect and fulfill human rights - and reiterates that meeting these duties is all the more important in times of crisis. Sally-Anne Way concluded that we need to move beyond the debate between a minimal State and a maximal State towards a rights-fulfilling State that respects, protects and fulfils economic, social and cultural rights as well as civil and political rights.

The main findings of this civil society report are summarized in the short article below.

Bringing Human Rights to Bear in Times of Crisis

The joint report published in March 2010 by a group of civil society organizations was submitted to the High-Level Segment of the 13th session of the Human Rights Council on the global economic and financial crises. The report, entitled Bringing Human Rights to Bear in Times of Crisis, draws attention to the importance of implementing human rights-centered economic policies in pursuit of the mitigating effects of the economic, environmental and food crises. Economic crises ought not to be used by governments as an excuse to set aside their human rights obligations because "even during a crisis, governments must do all they can to avert retrogression in the realization of socio-economic rights." The report analyses fiscal and monetary policy responses of governments to the crisis, as well as the international constraints of trade, aid and debt faced by the poorer developing countries in their responses to the crisis.

Fiscal policy measures are key to government responses to economic crises. According to the report, fiscal policies need to be expansive and counter-cyclical if governments are to provide social protection, generate jobs, and fulfill their human rights obligations enshrined in various international covenants. "If a government has, but chooses not to use, available resources for this purpose, serious questions arise about its dedication to fulfilling its obligations to progressively realize economic and social rights," it states.

A human rights analysis of other specific fiscal policy tools is therefore necessary not only for economic stimulus packages, but also for social protection and social security programmes and tax policy reforms. During times of crises, social spending often falls by the wayside. As a result, rights and needs, such as education, housing, and healthcare, deteriorate for those who were on the sidelines of society even prior to the crisis, including children, women, and the elderly. A well-targeted stimulus package, one that enables equal access to all, has the potential of boosting employment opportunities and other income-generating programs, and thus break the negative cycle. However, the document warns, "economic stimulus packages which fail to measure, involve and target the economically disadvantaged will likely only reinforce their exclusion." In the current crisis, evidence suggests that some governments have increased spending on social protection programmes specifically targeting the most vulnerable groups: migrant workers, women, youth, disabled persons and the elderly, yet but a mere 17% of higher-income countries pro-actively sought policies to increase employment of women, and only one in every four countries provides support to the elderly.

In relation to financial and monetary policy responses to the crisis, the report expresses concern that many of the measures taken during this crisis, have focused on saving the financial sector instead of stimulating growth, providing social protection, or protecting vulnerable groups. Monetary policies have "focused on treating the symptoms, rather than the underlying causes of the crisis."

Finally, the report examines the international constraints which prevent countries of the global South from implementing post-crisis policies that reflect respect for human rights. According to the document, three global factors stand out: trade, debt and aid.

Developing countries, many of which are export-dependent, were particularly hit by the drop in demand and prices for export products. As a result, trade tax revenue, one of the most substantial sources of income for governments of developing countries, has sharply declined. In addition to that, drops in tourism-related earnings and growing industry shocks have all contributed to the implementation of governmental policies that show even less regard for social and economic rights. Debt burdens, which in many cases now exceed 60% of GDP, present an almost insurmountable obstacle for countries of the global South to implement any sort of human rights-centered rescue policies. Yet while debt levels keep rising as a result of the economic crisis, debt cancellation and/or temporary moratorium have been given very limited consideration. In addition, the majority of the committed aid package by the G20 will not be delivered in grants, but in instruments which will only further the indebtedness of aid recipients. As Salil Shetty, director of the UN Millennium Campaign, illustrates, availability of resources is not the real problem. "The massive bailouts we have seen for the financial industry have shown us that the real issue we face in addressing this global crisis is not the availability of money, but the availability of political will. The amount of money needed annually to achieve the Millennium Development Goals is a miniscule fraction of the estimated US$5 trillion of public money mobilized for the bank bailouts."

Bringing Human Rights to Bear in Times of Crisis concludes that donor governments must not use the economic crisis as an excuse for reducing international assistance, and that those most responsible for the crisis have a special responsibility to support policy decisions that do not only aim to alleviate adverse effects of the economic crisis, but are founded in human rights principles. Restructuring the global economic system to reflect respect for human rights is, according to the document, "crucial to ensuring a more sustainable, more equal and more resilient economic system in the trying times ahead."

Bringing Human Rights to Bear in Times of Crisis, including specific recommendations for action, is available online.

Civil society who contributed to the joint report include: Center of Concern; Center for Economic and Social Rights; Association for Women's Rights in Development; Center for Women's Global Leadership at Rutgers, The State University of New Jersey; and ESCR Net.