Civil Society, Development & Aid, Economy & Trade, Financial Crisis, Global, Global Geopolitics, Headlines, World Social Forum

RECESSION AND RECOVERY: Cities Going One Way, Nations Another – Part 2

IPS Correspondents*

RIO DE JANEIRO, Jan 26 2010 (IPS) - Some signs are emerging of a new trend shown up by the recession: local governments (and the people) are going one way, national ones another.

Broadly, national ones have stayed on the side of the giant corporations that fell, or at least stumbled because they were thought too big to fall. U.S. President Barack Obama’s tough new stand against the financial institutions that took from the poor to stay rich might be the first big move where the government of a developed nation, in this case the biggest of the lot, takes to policy in tune with what plain people say and want.

But it’s early days yet for Obama’s initiative, and the corporations are resisting, with not a little help from cousins in the media who live off them.

And that move is only a giant wave in a swell that has been building up of an economy built around people rather than profits that multiply beyond the comprehension of most people – and beyond their reach.

Several of these ideas have crystallised around the idea of the World Social Forum (WSF). A new national alliance of 11 local and regional domestic worker organisations was formed during the U.S. Social Forum (USSF) in 2007, and has grown since.

“There’s been a tremendous amount of progress. The alliance has expanded to include 10 cities and over 20 groups of domestic workers around the country,” Ai-jen Poo, a participant in the founding meeting of the National Domestic Worker Alliance, tells IPS.

“We have started working on an international campaign together with domestic worker organisations around the world to impact the first International Labour Organisation Convention on Domestic Work. That’s going to be discussed at the ILO in Geneva in June of this year and next year as well. It would be the first ever,” she said.

“We’ve also started working with the U.S. Department of Labour to look at potential administrative and regulatory reforms that can include enforcement of existing laws for domestic workers at the federal level.”

The first beginnings have been built into something of a national movement. “The Social Forum was the first coming together for domestic worker organisations nationally. That’s when we decided to form the national alliance. Now we actually have a national vehicle to build power which we never had before the Social Forum, and to raise the level of respect for this work and really bring attention to the conditions and the abuses but also the tremendous organising that’s happening in the sector,” she said.

The USSF has for instance brought together organisations based in various cities trying to prevent the demolition of low-income housing. These groups have continued to collaborate since the Forum.

Another group that was formed during the USSF 2007 was Right to the City, Alice Lovelace, a former organiser of the USSF, tells IPS.

Right to the City was organised as “a new alliance that unites our struggles for housing, health care, (and a) public space to fight neo-liberalism and build an alternative for our cities,” according to its website.

The alliance brings together over 36 different organisations from seven cities across the U.S.: Boston, Massachusetts; Washington, DC; Los Angeles, California; Miami, Florida; New Orleans, Louisiana; New York in New York state; Providence, Rhode Island; and San Francisco, California.

Right to the City includes numerous Hispanic organisations – including Centro Presente and City Life-Vida Urbana in Boston; Esperanza and Union de Vecinos in Los Angeles; and Vecinos Unidos in Miami – as well as two chapters of the Chinese Progressive Association, in Boston and San Francisco. It also includes Picture the Homeless in New York, Safe Streets in New Orleans, and St. Peter’s Housing Committee in San Francisco.

“Since (the USSF) we’ve gone on to do all different sorts of work,” David Dodge, New York regional coordinator for Right to the City, tells IPS.

Change has come to cities and municipal administrations across Western Europe as well. The change is in line with the campaign against neo-liberalism and compulsive privatisation that was at the heart of the WSF movement. Several city administrations are responding to people’s call against handover of vital public services to private companies – particularly essential life-supporting systems such as water and electricity supplies.

After the wave of de-privatisation of water services facilities that started across the world two years ago, municipalities in Europe are now buying back the electricity utilities they sold to private investors in the late 1980s and early 1990s.

In Germany, numerous city and regional governments have already ended the privatisation of power plants, or are in negotiations with the private owners.

Around Munich, the capital of Bavaria located some 500 kilometres southeast of Berlin, “the local governments are now convinced that municipal utilities are public goods that belong in state hands,” Christoph Goebel, mayor of the town of Graefelfing, tells IPS. In the federal state of Bavaria alone, some 2,000 permits for municipal utilities granted to private companies 20 years ago are due to expire this year.

In Ottobrunn, another town on the outskirts of Munich, the local government has just grounded a city-owned electricity provider, stating that “the sale of municipal utilities to private companies, which only respond to the interests of shareholders, has proven to be a mistake.”

In Paris, the municipal administration will this year regain control of all water services for the city, ending a private monopoly that has lasted more than 100 years.

When Mayor Bertrand Delanoë announced the end of the private monopoly of water services in June 2008, he promised “to offer a better service, at a better price. We also promise that prices will be stable.”

Both considerations are now the basis for local governments’ claims in support of re-municipalisation of public utilities, Olivier Hoedemann, a member of the Corporate Europe Observatory (CEO), tells IPS. “The privatisation of water companies has proven all over the world to be a major mistake, both in terms of prices and of the quality of services provided to the citizens.”

This trend in Europe seems to be running counter to trends at the level of national policy. “Unfortunately, most governments in Europe never really renounced the neo-liberal paradigm, despite the profound social and economic crisis that deregulation and radical free-market policies triggered in the continent,” Kerstin Sack, who tracks international financial institutions and economic solidarity at the German anti-globalisation movement ATTAC, tells IPS.

Policy calls from civil society groups such as the World Social Forum remain “as urgent as ever,” Sack says. “The world needs to establish firm controls over international financial transactions, pursue a global environmental policy to forestall climate change, promote a fair international trade policy, and give expansion opportunities to developing countries’ producers, in both industry and agriculture.”

Despite the negative effects of deregulated market economy policies, Sack says the conservative new German government in office since last September “is acting the same as in the most dogmatic neo-liberal years of the 1980s.”

Indeed, the German government – made up of the Christian Democratic Union of Chancellor Angela Merkel and the neo-liberal Free Democratic Party – has deepened the neo-liberal regime of the last 20 years, with tax cuts for high income sectors, reduction of social benefits for workers and low-income families, and a call for a further salary freeze for civil servants and employees of private enterprises.

And the same goes with France, which appears determined not to learn lessons. “The government is not ready to discuss a tax increase,” says Philippe Frémeaux, former director of the Agency for Economic Research and Forecast, and now chief editor of the monthly magazine Alternatives Economiques. “On the contrary, (President Nicolas) Sarkozy’s government has just approved yet another tax cut in favour of restaurants and hotels owners, and is paying additional subsidies to physicians.”

The reluctance of European governments to give up neo-liberal policies is hard to understand because the worst of the crisis may lie ahead, Xavier Timbeau, director of the French Economic Observatory (OFCE), tells IPS.

“The crisis will continue destroying jobs, which in turn will affect domestic demand,” while banks and insurance companies have suffered huge losses, he said.

“That’s why we are calling for revising the mechanisms of injustice that feed the instability of global capitalism. We are calling for a sharing of the burden of the global disaster in the fairest possible way.” But that call is getting a hearing certainly more at the local rather than national level.

The change is in line with scattered groundswell movements that have sought to build new economic models that are more inclusive of people, and more beneficial to the people within them. Brazil, particularly, has taken the lead here.

The Fio Nobre Cooperative, for instance, founded 15 years ago by Idalina Boni, evolved from crafts to textiles, and now produces shirts, skirts, other garments and handbags in the southern port city of Itajaí. The production chain stretches from cotton farming to the final sale, under the Justa Trama brand name.

Over the past 10 years, the WSF has produced more than talk – it gave birth to a number of collective initiatives based on cooperation and self-management, and free of the usual employer-employee relationship. The Brazilian Solidarity Economy Forum (FBES) emerged at the 2003 WSF, which coincided with the start of the government of left-wing President Luiz Inacio Lula da Silva, who established a National Secretary of the Solidarity Economy (SENAES) under the Labour Ministry.

The movement in Brazil combines three dimensions, says FBES executive secretary Daniel Tygel. Besides the economic aspect, which comprises self-management and the creation of cooperatives and networks, it includes a cultural dimension, related to consumption, gender relations, and a policy of social transformation.

“In the long term, Tygel says, “we want to change the model of production and the direction of development, towards a model that is not harmful to life.”

Brazil’s ‘solidarity economy’ ranges from agricultural production – which accounts for 60 percent of the groups linked by the FBES – to crafts, apparel, microcredit cooperatives, bankrupt companies that have been salvaged by workers’ cooperatives, community church projects and university incubators of solidarity businesses.

The solidarity economy currently represents a “paltry” share of the national economy, Tygel acknowledges, but it is growing fast, despite the scant government resources dedicated to supporting its development.

*In this set of three reports, IPS correspondents look at the impact of recession by way of unemployment, the push for more people-friendly government, and moves within developing countries to reduce reliance on the industrialised world.

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