EU leadership needs to embed human rights into economic policy-making

2 Apr 19

Fulfilling promises on human rights and development will improve the economies of countries and protect the poor from austerity, says Eurodad’s Mark Perera. 


In a valuable step forward to support human rights compliant economic policy-making, the UN Human Rights Council (HRC) called on 21 March for governments and intergovernmental organisations to make use of new UN guidance when developing economic reforms.

EU states on the HRC boldly exercised their votes to oppose these calls, in a move that stands in direct contrast to EU commitments from only two years ago to adopt a rights-based approach to development, and support countries in building resilience to prepare for and respond to economic shocks without compromising long-term development prospects.

New UN guiding principles add to the debt management toolbox

The HRC resolution on the effects of foreign debt on the enjoyment of human rights highlights new UN Guiding Principles on human rights impact assessments of economic reforms – designed as a tool to help states and international financial institutions (IFIs) meet the challenging task of balancing the aims of fiscal sustainability and macroeconomic stability with the protection and fulfilment of universal human rights.

The timeliness of the new guiding principles cannot be clearer: a new wave of debt crises is spreading across the globe, threatening low and middle income countries in particular, and posing a critical risk to delivery of the sustainable development goals (SDGs). The rise in global inequality persists, while evidence mounts of the damage to human rights caused by pro-cyclical macroeconomics – better known as the ‘sensible and only remedy’ to tackle a crisis (see for example Brazil’s case or how IFI policies affect public health). Surely any new tools to help address the challenges posed by this reality will be welcomed with open arms by policy-makers?

The debate that dare not speak its name

Sadly, the voting behaviour of those EU states on the HRC seems to suggest otherwise. The UK – which led the shaping of their opposition – continues to argue that the UN HRC is not the forum for discussion of debt issues, and says that this duplicates discussions in other fora. Away from Geneva, Eurodad and its partners often hear the argument that the IMF – the institution charged with addressing sovereign debt crises as a lender of last resort – doesn’t have the mandate to discuss human rights, so we shouldn’t bring issues such as human rights impact assessments to the table. This begs the question: where is this discussion taking place, and can we be included, please?

It is interesting to note that there is little debate from the UK and other detractors about the value of a tool such as the Guiding Principles to embed a human rights approach in debt management. Rather, they hide behind a peculiarly bureaucratic defence about where such a debate should take place. So this is less about substance and more about diplomatic nit-picking over procedure.

In the meantime, rights continue to be eroded and ordinary lives affected through ineffective debt reduction strategies typified by austerity, fiscal consolidation, privatisation, and labour market flexibilization, and which repeatedly penalise the most vulnerable. Is this not a dereliction of duty from the so-called defenders of the multilateral, rules-based order? The very states that should be demonstrating how international human rights obligations and development commitments can be effectively met – or at the very least, that efforts to achieve them optimised – cowardly rely on a type of inverse forum-shopping to avoid any genuine progress toward reform.

Carpe diem

This can still change, and the EU and its member states have ample opportunities in the coming weeks to show leadership, as the international finance and development communities gather for the IMF-World Bank Spring Meetings and the UN Financing for Development Forum (FfD Forum).

In line with the 2017 European Consensus on Development, EU states could call for the IMF Executive Board to look at how independent human rights impact assessments could inform current approaches to measuring debt sustainability and the design of policy reforms demanded in exchange for IMF loans.

Commitments could be made at the UN FfD Forum to support national level application of the Guiding Principles, for example through pilot projects to build best practice in using impact assessments in fiscal policy planning – articulating ambitions stated in the EU Action Plan on Human Rights and Democracy. None of this would be out of step with the work these international organisations are charged to do.

Time for performance to outrun promises

The HRC vote in Geneva came only three days after EU states reaffirmed their commitment to engaging ‘relevant international organisations to encourage states to ratify and comply with relevant international norms and standards’. Clearly not all the European diplomats in Geneva received the memo.

With unprecedented debt levels being witnessed across the globe, wasting the upcoming opportunities to deliver on this commitment and promote and secure use of the new guiding principles on human rights impact assessments should not be an option.

Genuine pursuit of the promises made on human rights and development – whether international human rights conventions, the 2030 Development Agenda, or the Paris Climate Agreement – imply reforms not just to economic policy, but also to practices in policy-making itself.

Without the systematic integration of human rights impact assessments into economic policy-making, the world’s poorest will continue to be hit hardest by austerity and fiscal adjustment programmes, and debt reduction will remain synonymous with reducing human dignity.

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