New social code in response to “human tragedy”

15 December 1998

Leaders are at last recognising the extent of the human crisis caused by the financial crash and failure of the growth process to deliver socially sustainable development. US President Bill Clinton spoke of the need for a “human face on the global economy” by strengthening social protection and democratic systems. Gordon Brown, UK Chancellor, admitted that “the recent crisis has exposed gaps in the social system in many emerging market economies, and the inadequacies of past IMF programmes”. He also stressed that short-term crisis measures should not impede long-term development goals. His proposal for a “social policy code”, to be designed by the World Bank and David De Ferranti, head of the World Bank’s Human Development Network is leading the team developing the code which should be drafted in time for next year’s Spring meetings. The Bank will consult with the ILO and other UN organisations, and build on the work it has done in Asia. It will examine experiences in 10-12 countries to highlight lessons.

Officials say the social code is not intended to be another form of conditionality, but it should be drawn upon when developing adjustment programmes.

G7 governments have also agreed to develop and implement international codes of best practice on fiscal policy (now published, see IMF website), finance and monetary policy, and corporate governance. Again the IMF will monitor them.