Translated from the Russian
International Conference "Economic Globalisation and
Regional Integration: Their Impact on Workers' Conditions in the CIS Countries",
Moscow, 7-8 February 2002
PRESIDENT OF THE GENERAL CONFEDERATION OF TRADE UNIONS
7 February 2002
Dear participants in the Conference, Dear Brothers and Sisters, Colleagues!
The world community has entered the 21st
century under the banner of global processes and problems that
have an increasingly strong impact on the destinies of the human
race. The growing interdependence of countries and nations, so
various in their levels of development, public life, economies,
policies, social spheres, ecological conditions, cultures, security,
etc., has reached a degree where it has come to be described as
It might look as if the scientific term
"globalisation", still unclear to many, has emerged as a kind of
surprise, though the whole history of humankind is actually
nothing but a gradual rapprochement of countries and continents.
However, over the last few decades, the development of productive
forced has altered the life of people on this planet unprecedentedly.
The emerging global society is changing the world more radically
and swiftly than any discoveries and scientific breakthroughs of
the previous centuries.
The rate and scope of this change present a
challenge to the very ability of the human being, and the human
race as a whole, to orient themselves in this new world, and adapt
their consciousness accordingly. There has even appeared powerful
opposition to globalisation known as the antiglobalist movement.
All this calls for the necessity to understand what is going on and
try to answer the questions: To what extent will globalisation affect
the workers' conditions? What should trade unions do to prevent
and remove its negative consequences? The search for proper
decisions is a common concern. It must involve not only the trade
unions, but also national authorities at all levels, CIS interstate
bodies, political parties, all sections of society, and, the last, but
not the least, science. That is the challenge of globalisation.
Globalisation can be defined in many
different ways. To put it simply, globalisation is such a state of the
world economy where most countries and regions of the planet are
closely interlinked in the process of economic development,
industrial co-operation and specialisation acquire global scales,
and transnational corporations are the dominant pattern of
ownership. Globalisation is a process actuated by new
technologies in the spheres of electronic communications and
transportation that enable information, people, capital and goods
to cross national frontiers and reach the most distant places on this
planet in the twinkling of an eye.
Attempts are being made to regulate this
process. World institutions, such as the World Bank, IMF, WTO,
etc., have been established for the purpose. Countries willing to fit
in the new world system must follow the economic rules
formulated based on the "Washington consensus"
recommendations and the so called "golden corset" requirements.
These include the openness, deregulation and privatisation of
national economies, which, to a certain degree, means restricted
sovereignty. What is missing here, is the social dimension of
globalisation. Meanwhile, what the unions highlight is the social
price to be paid for joining the global market.
Globalisation is multitier in nature, and it
leads to the creation of a single economic mechanism at a global
scale. What laws will regulate the work of such a mechanism? Will
it be built on the principles of the United Nations where each
country has one vote and each nation can influence the decision-
making process concerning its own interests? Or will it be built on
the principles of a joint-stock company where problem solution
depends on the size of the participants' voting stock?
The international monetary institutions are
actually pushing the world towards the second option. As for us,
we believe it crucial that the UN and its specialised agencies,
including the ILO, should have a stronger standing in a globalizing
world. The body of ILO conventions and recommendations makes
up an international legal basis that can serve as a world labour
code and restrain arbitrary rule in the developing global market.
Like any other objective process,
globalisation has both positive and negative sides. Let us try to
analyse them in utmost objectivity, with the accent on the impact
of globalisation on workers' conditions and on trade union activity,
and on the eventual consequences it may have for social and
economic development in the world and, particularly, in our vast
region of the CIS.
It should be mentioned that CIS countries
still "drop out" of the globalisation processes, which can be seen
from the following facts.
Although it has been growing, the
capitalisation of all the CIS countries, assessed, as is known, in
terms of commissioning new production capacities, the scopes of
stock markets, increases in production competitiveness, and
introducing new know-how and recent developments, has totalled
roughly the capitalisation volumes of a major company of a
Johnson & Johnson type ($130 billion).
The financial markets in the CIS states are
also quite weak; meanwhile, in developed countries they operate
on-line round-the-clock, crossing national frontiers easily. Thus,
the 300 currency markets in the CIS countries the total daily
circulation equals $1.8 billion as compared with $2 trillion in the
rest of the world.
Electronic trade is making the first uncertain
steps in the Commonwealth. Out of the world's 130 Internet
shopping centres, the CIS accounts only for two, both in Russia.
In this context, only a carefully built
national policy can help the countries benefit from globalisation,
and alleviate its negative social consequences.
Globalisation can promote wider spread of
up-to-date technologies and job management techniques, freer and
swifter circulation of capital, foreign investment growth, broader
possibilities for infrastructure development, and easier
communication between people.
Simultaneously, globalisation does not
eliminate or reduce, but rather conserves and aggravates, the
inequalities among countries and peoples, between the so called
"golden billion" and the vast majority of the Earth's population,
among various population sections in each separate country, and
even among individuals. Over the last 30 years, the world
economy has been growing by 2-3 per cent annually, while the gap
between the rich and the poor countries has widened by 10 times
over the same period.
According to UN statistics, there are 140 million
totally unemployed people in today's world, almost one third of the
planet's able-bodied population is partially employed, over a
billion people live in misery, and about half the population of the
Earth ranks among the poor who earn less than two US dollars a
day. One and a half billion people are not expected to attain the
age of 60, over 800 million have no access to normal health care,
over 30 million are HIV-infected, 840 million are constantly
undernourished, and 125 million children do not go to school.
Most citizens of CIS countries have also
suffered a loss in their living standards and quality of life. The
average rate of unemployment in the Commonwealth has reached
almost 10 per cent, or 12 million people, over the last ten years.
The share of citizens in CIS countries living
below the poverty line is 20 to 40 per cent. The monthly wages
range from $10 in Tajikistan to $125 in Kazakhstan. The pensions
are even lower.
According to estimates, for a country to be
able to join the world of globalizing economies, its average per
capita income must exceed $800 a month. This challenges us to
get more vigorously involved in the struggle for higher pay and
make this aim a focal point in the economic and social policies of
our states for the near future.
There is another aspect to ponder over.
Globalisation, with its advanced technologies and growing labour
productivity, will inevitably involve cuts in the numbers of
employees and, first of all, blue-collar workers. Already now, one
can hear earnest debates about the so called "20-to-80" society"
where only 20 per cent of the population will be active workers
and consumers, while the remaining 80 per cent, coming mostly
from backward and developing countries, including the CIS states,
will have nothing else to do, but rely on charity. There is even talk
about social reservations. Even if such things might not be the
problems of today, we cannot help feeling indignation at the very
fact of them being discussed.
Besides, the growth of unemployment and
poverty has resulted in the massive migration from poor regions to
regions with higher living standards. This movement can hardly be
stopped, not even by the most severe immigration laws. Today, this
tendency is distinctly universal. It is also present in CIS countries
where migration gets an increasingly illegal character. Suffice it to
say that in Russia alone, the number of illegal economic migrants
from other CIS countries amounts, by different estimates, to
almost three million. In some regions, the migrants have formed
their ethnic diasporas.
Trade unions cannot close their eyes to the
problem, and they must think of measures to protect the migrant
workers, with due regard for the most complicated employment
situation. The building of a common labour market for the
Commonwealth could be largely instrumental in solving these
contradictions. The GCTU has actively participated in formulating
the concept of such a common market.
As the world of free competition creates
high risks for stable business, trade unions must pay more
attention to the social protection systems. Especially as the
Constitutions of most CIS countries declare them social states and
proclaim the priority of human and civil rights. What we see
instead, is that some CIS countries tend to switch over to paid
health care, introduce pension schemes based on the hundred-per-
cent accumulation principle, make the population pay more for
education, abandon the unemployment insurance systems, etc.
Such a situation is dangerous, because a
sizeable portion of the population may disagree with the
governments' course for globalisation and reject the ruthless
competition, or even revolt against the alien values, against the
enormous gap between wealth and misery, against the indifference
towards the victims.
This is acknowledged by many leaders of
states, international organisations, religious confessions, and
nongovernmental organisations, including trade unions and
women's and youth organisations, by prominent scientists, and
even by representatives of transnational business.
That is the reason why now, as never before,
trade unions must get more actively involved in the development
of socioeconomic policies in the CIS countries with the aim of
eliminating the negative phenomena accompanying the process.
The CIS countries could, in our view, build
their policies based on national revival, without self-isolation or
confrontation with the outside world, through building up their
competitive advantages. We must have a better understanding of
the role to be played by state regulation, and realise that the
necessity to catch up with others in the process of development has
no prospects. This can only be achieved if we formulate strategic
policies in the spheres of structural adjustment, science,
technology, industry and agriculture.
Such a policy must rest on four pillars. First,
decent work with all its requirements concerning the job itself,
wages, health and safety, ecology, etc. Second, social security
based completely or partially on the principle of social solidarity.
Third, social dialogue.
And, finally, fourth, human rights. Health
care, education, and culture must be accessible to everyone.
Let me dwell on education. We know that a
well-educated population adds to the competitive advantages of
any country, and attracts investment. Therefore, all CIS countries
should ensure free access to education.
The education system in the USSR was
among the best in the world. Now that education reform is
underway in many countries, it is essential not only to keep the
advantages of the former system, but also improve it with regard
for today's realities.
Information and communication
technologies have an important role to play here, as they open
tremendous new opportunities in education. Unfortunately, they
are not yet sufficiently spread in the CIS countries where only 2
per cent of the families have a computer. In Russia, for example,
75 per cent of the population have never used a computer.
Incidentally, buying a computer will cost you an average of eight
months' pay in Russia and Kazakhstan, and eight years' pay in
Tajikistan. Meanwhile, the citizen of a developed country will only
need a month's pay for the same purpose. Not to mention the
Internet, as 91 per cent of its users are to be found among the
"golden billion" of the Earth's well-to-do inhabitants.
All this has created two parallel worlds.
Those who have a high income, education and communications,
have free and lightning-fast access to information. For the others,
it is a hard, slow-going and expensive way. Whenever people from
those two worlds have to compete with each other, the lack of
access to information leaves no chance for the poor.
The CIS countries have to master advanced
information technologies in full. It should be mentioned in all
fairness that some Commonwealth countries are already taking
steps in this direction, and Russia has even adopted a special state
programme to this effect.
While taking account of this new situation,
we must see its social dimension. The introduction of new
information technologies will not only provide new opportunities
for manifold growth of production efficiency, but also open the
way to more intensive exploitation of workers because it leads to
the individualisation of the labour process, wider spread of
distance labour (a kind of "Internet-based home work"), and
delegating decision-making to lower levels. This changes basically
the traditional approaches to labour safety, environment protection,
legal guarantees, social security, work remuneration, and, of
course, motivation for organising and trade union activity at all
By the way, trade unions could make a
better use of information and communication technologies, or
ICTs, in their work. They could be helpful in conducting polls,
disseminating information, co-ordinating positions, organising
actions of solidarity or protest, and holding virtual sessions of their
Economic globalisation and ICTs are
gradually changing the organisational structure of production and
the very structure of society. As they do so, two tendencies become
prominent. The process of transforming large-scale enterprises into
transnational corporations has accelerated, simultaneously with the
broad use by the latter of small and medium-size businesses. Let
me remind you that, according to some data, small enterprises
provide jobs for half the employed people in the world. However,
the intensity of exploitation at such enterprises is usually much
higher. Already today, trade unions must pay more attention to the
situation in small businesses, and, in this connection, discuss the
future union structure. I believe the problem will be discussed in
more detail by the workshops.
In today's world, the basic productive forces
belong to major producer companies, i.e. those transnational
corporations whose sphere of activity covers the entire planet.
There are approximately 40 thousand transnational corporations in
the world now. Five hundred out of them account jointly for 60 per
cent of the gross world product. They employ almost 85 million
people, and 93 per cent of their headquarters are located in the
USA, Western Europe and Japan. Twenty-seven out of the 50
largest transnationals originate from the USA.
Transnational corporations bring their own
social ideology and labour relation standards to where they invest.
It is known that, for instance, in the USA, with its low degree of
union organisation, weak social and labour legislation, and
insufficiently developed system of collective bargaining,
employers make no secret they would prefer "a union-free
environment" in their enterprises.
US-based transnationals are trying to apply
the same principles in CIS countries, and some Western European
companies follow suit. We know of quite a few cases when they
tried to keep the unions out of their enterprises or restrict their
activities, impose the practice of signing fixed-term individual
labour contracts instead of collective agreements, and disregard
the national social and labour legislation. Many of you will
probably remember the battle for setting up a trade union
organisation at the notorious McDonald's in Moscow.
As the wages at transnational enterprises are
usually higher than at domestic enterprises (although not as high
as in the USA or West Europe), the employees often choose to
keep silent about infringements of their rights.
Therefore, it is important to build strong
trade union organisations at all transnational enterprises operating
in the CIS countries. They must jointly establish an information
exchange system that will help them agree on collective bargaining
demands and organise common actions of solidarity. We believe
we can achieve the aim if we pool the efforts by all the national
trade union centres and industrial trade union internationals. It will
not be an easy task, since we should keep in mind that 100 major
transnationals have established more than two thousand affiliated
or subsidiary companies in our countries.
Once upon the global expanses, capital is
vitally interested to build such a world system that would
aggravate the differences between workers of different countries.
TNCs are looking for places and countries where wages could be
minimal, taxes insignificant, and state interference imperceptible.
Trade unions must meet such challenges of
globalisation with globalizing the trade union movement. We said
it almost ten years ago. The world trade union movement has not
yet worked out any integral programme of action to face the
challenges of globalisation. However, a survey of the documents
adopted by the recent congresses of all the three world trade union
centres will show that their treatment of globalisation and its social
implications is identical. This inspires the hope that a common
position could be developed, and the GCTU will be ready to make
a contribution towards this end.
As recently as 1977, the International
Labour Organisation adopted a Tripartite Declaration of Principles
concerning Multinational Enterprises and Social Policy. Together
with the Code of Conduct for Transnational Corporations
approved by the United Nations in 1973, this document is still
very important to trade unions as they organise actions to protect
their countries' national interests and the legal rights of workers
employed by TNCs. It says distinctly that TNCs must take full
account of the aims of development and social objectives of the
countries where they operate.
Our unions can and must use these, and
other international documents in their relations with TNCs, but
they must clearly realise that the implementation of the documents
will not be automatic. In each specific case, the workers' interests
will have to be protected through negotiation and struggle.
For example, today it would be unrealistic to
try and bridge the tremendous pay gap dividing the workers
employed by the one and the same TNC at its enterprises in CIS
countries and in the country where the TNC is based. But why not
take gradual steps to make the wages of our workers equal to the
company average? Or take the subsistence minimum in the home
country of the TNC as a goal?
Speaking of transnationals, I cannot help
mentioning the structures of domestic producers in the CIS
countries. Most of the large production associations that had been
built in the USSR were broken up during privatisation, although,
given an adequate degree of transformation and investment, many
of them could have survived and been efficient participants in the
competition with world TNCs.
The creation of finance-industrial groups,
both national and international, has not brought the expected
return. However, some major companies, which are in actual fact
transnational corporations, have been successful, e.g. RAO "EES
of Russia", Gazprom, Lukoil, and others.
There are trade unions in those companies.
To provide them with collective bargaining guarantees, the GCTU
proposed that the heads of government of CIS countries sign a
special interstate agreement, which they did. The future will show
if the trade union organisations in those companies are efficient.
However, we cannot, for example, dismiss the fact that the
collective agreement now in force at Lukoil protects the company's
workers in 16 countries of the world.
Let me stress another characteristic feature
of transnational capital. When it comes to the CIS countries, it is
invested mostly in raw-material branches of the economy, and
never, or very seldom, in the manufacturing industries that service
the population's final demand.
Equipped with this economic outfit, the CIS
countries are entering the world market, and the question of their
future role in the new world becomes increasingly topical.
Apparently, the countries of the Commonwealth have small
chances for a quick adaptation to the conditions of globalisation.
We are fully aware, however, that our countries will not be able to
ensure a better life for their citizens, if isolated from the outside
According to the rules prevailing in today's
world economy, any country wishing to take a befitting place
therein, must constantly build up its export potential and do its
business in the world market on the terms and conditions dictated
by the World Trade Organisation known as a champion of
international trade liberalisation and maximum competition in the
commodity and services market.
While not denying the advantages the WTO
gives its members in the sphere of foreign trade, we must know
exactly what price our countries will have to pay for joining this
Organisation, and whether or not we should make haste to do so.
You know that three CIS countries, Kyrgyzstan, Georgia and
Moldova, are already members of the WTO, and their
representatives here may wish to share their experience with us.
Should we look through the statistics
concerning the 14 countries that have joined the WTO over the last
five years, we could easily spot one tendency: the weaker the
countries and the less their per capita GDP, the more tariff
concessions they had to make at the negotiations (among the
above 14 countries, Kyrgyzstan with its $300, Mongolia with
$350, Moldova with $370, and Georgia with $620 have the lowest
gross domestic product per capita).
As for their competitiveness, CIS countries
can hardly be rated among the most advanced world nations, as
many of them lack sufficient technological and financial resources
to formulate and, what is more important, to follow efficiently the
regulations and standards relating to most of the WTO-prescribed
parameters for the products they make. If all enterprises in the CIS
were now to change over to European standards, then, according to
expert estimates, 80 per cent of them would be ruined, and their
markets would be seized by Western firms. Today, only half the
number of European standards and regulations have been adopted
as CIS standards. Exports will have to be re-attested at a large
scale, particularly in what concerns engineering, chemical, textile,
and food products, which will put up another barrier before the
Even in the relatively distant future, our
countries can hardly count on success in the stiff competition. On
the other hand, the adverse consequences, such as reduced
volumes of production in vital industries and great numbers of
redundancies, will not probably take long to come.
Trade unions are convinced that any
decisions on the entry to the WTO must be taken, based on
economic and social expediency rather than on political motives.
Apart from insisting that our governments follow this line, we
must also look for other ways to influence the decision-making
Simultaneously, workers in the CIS
countries can profit by the high labour standards that exist in some
of the WTO member states. The cheap workforce, the non-
payment of wages, the absence of trade unions, the use of child
labour, and the low health and safety standards and environment
protection requirements at some enterprises in CIS countries - all
this helps reduce production costs, i.e. creates advantages over
competitors in the world markets. Consequently, developed
countries can demand that international trade agreements should
incorporate special clauses about labour tariffs and higher
standards for work conditions and workers' rights.
On the whole, a decision to join the WTO
must be well-grounded and faultlessly verified, both from the
positive and the negative perspective. All of us must understand
that our countries will finally enter the WTO. The question is how
to minimise losses and protect our national interests. How soon
and how quickly should our countries join the WTO, and on what
We must choose the right policy with
respect to the negative consequences of our membership in the
WTO. China, for example, had put forward dozens of conditions
before it entered the WTO. We must also specify our priorities. For
instance, will it be really necessary for us to subscribe to the WTO
civil aviation agreement or any other optional documents of this
kind? We must think together how we can protect the most
vulnerable sector, agriculture, unless we want our countries to be a
world dump of low-quality foodstuffs. Japan and the Republic of
Korea, for example, refuse to open their agrarian markets.
Incidentally, today's Russia produces less livestock products that it
buys, whereas ecologically safe meat could be easily "made" in the
CIS. In other words, it would be quite logical to investigate into
the rates and trends of liberalisation of global commodity flows.
The entrance of CIS countries into the
global market could be considerably alleviated by their regional
grouping. It is no coincidence that the General Confederation of
Trade Unions affiliating trade unions in almost all CIS countries
has been supporting and promoting this process in many ways.
According to available data, the most
developed CIS countries possess, among them, almost a dozen
macrotechnologies whose employment excludes, in principle, any
possibility of competition with the developer. Combined with the
remnant production, personnel, raw-material, scientific and
technological capacities, they form the basis for the
Commonwealth potential. The CIS countries are simply obliged to
make use of them, and it will not be overstatement to say that this
is crucial for the future of the new nations.
We believe it extremely important for the Commonwealth to reconstruct
cardinally the production machinery, and use the internal factors of globalisation,
particularly in what concerns the transportation, power, agro-industrial, and
information and communication components of the
As concerns transport, the situation looks on
the whole favourable for the CIS: out of the nine transportation
corridors to be developed by the world community three will run
through the territory of the CIS. The countries of the
Commonwealth can get a real chance to increase manifold their
transport services to the world community already in the near
future. And this goes for all transportation means.
The CIS states are the fourth biggest energy
producer in the world, accounting for about 10 per cent of the
world volume of electric energy, with almost two million workers
employed in the industry. As practically all CIS states operate their
power systems in parallel, they have actually started to form a
common energy market. This brings an annual return of $1.5-2.0
billion, virtually without involving any additional expenses.
The Commonwealth is gradually building a
common agrarian market, which may result in reduced annual
imports of foodstuffs from the outside world by $2-3 billion and
enhanced food security of the CIS states. Today, the share of
imported goods in the food resources of retail trade amounts to 40
per cent in Kazakhstan, 36 per cent in Russia, and 33 per cent in
Tajikistan, (80 per cent in consumer goods).
All potential capacities of the CIS should be
looked upon as ready-made reserves that can be utilised
specifically for increasing the volumes of production and
commerce, and, consequently, for economic and social growth.
Now that it has become common knowledge
that the place the Commonwealth occupies in the world processes
of economic, cultural and moral globalisation does not correspond
with its potential, there appears a possibility to turn the centrifugal
forces into centripetal ones, and do our utmost to make the
Commonwealth an influential regional alliance, a centre of the
globalizing world, and give the citizens of our countries a chance
to take full advantage of the fruits of globalisation.
Thank you for your attention.