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UN calls for human rights response to impending recession

Juan Pablo Bohoslavsky is United Nations Independent Expert on the effects of foreign debt and other related international financial obligations of States on the full enjoyment of all human rights, particularly economic, social and cultural rights. It's perhaps a title that could benefit from some brevity!

Last week he published a report on COVID-19 and the urgent appeal for a human rights response to the current pandemic and the impending economic recession. Below is a summary of some of the key points and recommendations made, as they might relate to Ireland:

  • Austerity cannot be an option
  • The coming economic crisis is likely to hit women harder
  • There must be an immediate emergency response for the vulnerable
  • That response should include emergency basic income, housing and essential services
  • Economic policies and entitlements must be consistent with public health and human rights
  • There should be some reflief of both private and sovereign debt
  • Fiscal policies should finance social justice
  • This is an opportunity for a real global green change

Austerity cannot be an option

It has been demonstrated that austerity, as a policy to face the consequences of an economic crisis, does not contribute to economic recovery but rather entrenches inequalities, hits the vulnerable the hardest and weakens States’ public safety nets, dangerously jeopardising the ability to adequately respond to immediate human rights obligations. It also impairs the State's capacity to respond to future shocks in an adequate and timely manner, to prevent and mitigate adverse human rights impacts.

The coming economic crisis is likely to hit women harder

The impact of crises on inequality and human rights depends, to a great extent, on the existing social protection system in place, as well as the level of public spending, which serves as a stabiliser during recessions, including the way this public spending is financed. The aftermath of the coming crisis is expected to be particularly devastating from a human rights perspective if special measures are not urgently adopted to compensate for past shortcomings and protect the population, while paying particular attention to the most marginalised and vulnerable.

The current economic system is, for the most part, sustained by gender inequality and discrimination against women in the labour market. Around the world, unpaid and paid care work is too often and mostly performed by women. The value of women’s unpaid and underpaid labour and its contribution to the economy have been seriously underestimated and even ignored for centuries. However, in times of the current pandemic and its interconnected crises, its value has been multiplied. Economic crises also hit women harder than men because they are often overrepresented in the informal sector and low paid work.

There must be an immediate emergency response for the vulnerable

An immediate emergency human rights and humanitarian response in areas and groups at heightened risks of the pandemic should be urgently deployed. In particular, humanitarian efforts must urgently provide relief to all individuals including those living in informal settlements and in situations of homelessness, informal workers including refugees and migrants, persons with disabilities, older persons, children, women who are victims of violence, and persons under detention and in State custody

Response should include emergency basic income, housing and essential services

Any initiatives to soften the economic fall-out of the crisis, such as cash transfers and subsidies, must be designed to urgently reach those in need and benefit all those financially struggling, without any discrimination, including those who are self-employed, informal workers and unpaid care workers who are largely women.

As already adopted by many States, measures including unconditional cash transfers to maintain an adequate standard of living, avoid entrenching inequalities and prevent people sliding into poverty, must be adopted immediately. In this regard, it is reassuring to see that some countries have already committed to boost cash transfers and help packages, expand social safety nets, and order the suspension of mortgage repayments.

Since adequate housing is the entry point to the exercise of numerous human rights, such as education, work or health, and key to the effective implementation of prevention efforts, a moratorium on evictions should be enacted. Emergency shelters should be put at the disposal of the homeless, those living in informal settlements or overcrowded households, or those at risk of domestic or gender-based violence. Additional shelter places, such as hotels and empty facilities, should be considered for that purpose.

Economic policies and entitlements must be consistent with public health and human rights

The report notes that in Ireland, the Government announced on 24 March 2020 that “for the duration of this crisis, the State will take control of all private hospital facilities and manage all of the resources for the common benefit of all of our people. There can be no room for public versus private when it comes to pandemic,” and that all COVID-19 patients will be treated free of charge. This was warmly welcomed in the report.

There should be some reflief of both private and sovereign debt

Private debt-servicing should be suspended for individuals who would otherwise be unable to cope with the public health crisis and be without income. During this period these loans should not bear interest. In this regard, a suspension of mortgage payments should be introduced, like is already the case in a number of European countries and in Argentina.

In the same vein, those in need should benefit from individual and certain corporate tax cuts or delays. It is also crucial to suspend for at least six months debt payments and services to the financial sector by low-income families and poor households to avoid emergency cash transfers from the State ending up entering financial circuits rather than fuelling the real economy and helping families. Adequate mechanisms should be put in place to guarantee that they will be able to navigate through this Pandemic without being drained.

A moratorium on sovereign debt repayments for debt-distressed developing countries, countries with a majority of poor population and countries heavily suffering from the economic fall out of the pandemic should be immediately implemented. In this context, the announced debt payment relief of the IMF for its “poorest members” is very welcome. The World Bank and the IMF have also urged bilateral creditors to provide immediate debt relief to the world’s poorest countries as they grapple with severe consequences of the rapidly spreading coronavirus. Yet, the number of countries struggling to repay their debts goes beyond the poorest ones and those in need of debt relief and moratorium programs. This is a great opportunity for international financial institutions to operate based on the principles of human rights in line with the UN Charter they are bound to. If these measures are not implemented, indebted countries could face the need to default their payments to cope with the crisis, adding a new element of financial instability at international level. A preventive relief can help in better managing this financial stress. In the current circumstances, claiming 100 per cent of the credits would erode even more the fiscal spaceneeded to cope with the health and economic crisis.

Fiscal policies should finance social justice

States need to reconsider their fiscal policies to finance social policies, and ensure that monetary policy in consistent with both of them. Financing fiscal deficits can be legitimate if it ensures access to basic human rights for the population. In this regard, the announced lifting of the EU Stability and Growth Pact (which prevents States to accumulating fiscal deficits higher than 3 per cent of GDP) is commendable. Such an initiative allows for the needed fiscal space and a better mobilisation of available resources to fight the pandemic and prevent its adverse impacts on human rights, whether as a result of economic downturns and/or of lockdown and restrictions having been put in place to response to the current health crisis. However, future debt distress has to be avoided and excessive private wealth should be tapped into.

This is an opportunity for a real global green change

We cannot afford to go back to business as usual. The COVID-19 pandemic calls for re-thinking the economic, financial and social system we are living in to reduce inequalities among and within countries, as well as between men and women.

Both the COVID-19 crisis, and the already unfolding effects of climate change, demonstrate the fragility of our current economic and social arrangements. Our systems cannot cope under the strain of these events, from climate to pandemics, and experts predict that these events will become more frequent and severe. And when these events unfold, our economic and social systems appear to protect the adequate living conditions mainly of elites, while the majority of people are pushed into more precarious living conditions, from increased poverty to poorer health, precarious livelihoods and actual destitution. All of this makes people much more vulnerable to mortality when disaster strikes.

These are violations of a wide range of human rights, including the rights to life, health and to an adequate standard of living, and the continuous improvement of living conditions for all. Yet the concerted action taken in the face of the COVID-19 crisis demonstrates that coordinated action and a rapid change in policy and practice is possible to face global challenges. Sudden drops in production and consumption associated with the current pandemic crisis, which have been accompanied by falls in pollution and greenhouse gas emissions across continents, call into question our reliance on economic growth as a measure of progress and the health of our societies. At the same time, it highlights the important role of governments in protecting livelihoods and the right to an adequate standard of living, including the rights to adequate housing, social protection, and health care.

Economies remain important, especially in providing the material underpinnings for a good life for all, through essential services, decent work, and adequate material goods. But they should serve the public good, and be guided by human rights principles, rather than relying on speculation, high private debt, unregulated consumption and degradation of natural resources in ways that increase our vulnerabilities and which our planet cannot sustain. For the same reasons, States should not provide subsidies (bail-outs) and other emergency benefits to sectors whose existence is in direct contradiction the Paris Agreement and have no chance of transition.

The full report can be read here.