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World Bank: ‘Doing Business’ as usual

31 October, 2012In the 2013 edition of its ‘Doing Business’ report, released on 23 October, the World Bank once again peddles the myth that weakening labour laws will stimulate job creation. This claim is in contradiction to the World Bank’s own research.

The Global Unions, including IndustriALL, have long been demanding that the World Bank remove all reference to labour from its ‘Doing Business’ report. The Bank has previously ordered staff to stop basing policy advice and loan conditions on the notorious ‘Employing Workers Indicator’ which awarded its top rating to countries with the most deregulated labour markets, including systematic abusers of workers’ rights such as Belarus.

The latest issue of Doing Business once again states that countries that reduce dismissal notice periods or severance pay “are addressing one of the main factors deterring employers from creating jobs in the formal sector”. But in a severe case of policy incoherence, the World Bank’s own World Development Report 2013, launched only a few weeks ago, finds that the impacts of two decades of labour deregulations on employment levels have been insignificant or modest. This follows a 2008 evaluation of Doing Business by the World Bank’s own Independent Evaluation Group which concluded that there is no basis to claims that labour market deregulation creates jobs.

ITUC General Secretary Sharan Burrow has called on the World Bank to develop a new, balanced approach to labour market issues, inspired by the recommendations of the World Development Report 2013, and to remove the theme of labour from Doing Business once and for all.