11:40 AM Jun 18, 1996

WTO STAFF TO STRIKE WEDNESDAY

Geneva 17 Jun (TWN) -- The staff of the World Trade Organization are due to go on a day's strike Wednesday, and threaten a work to rule next week, over their demands for delinking their pay and pensions and other conditions from the UN system.

The General Agreement, when established, was a provisional contract without any institutional provisions. The secretariat was that of the Interim Committee for International Trade Organization (ICITO) that the UN ECOSOC set up to facilitate the entry into force of the Havana Charter, and thus part of the UN system.

At the time the agreement to establish the WTO was concluded, and before it was signed at Marrakesh, the staff floated the idea that their pay and other conditions should be put on a par with those prevailing at the International Monetary Fund and the World Bank. This met with resistance from almost every member country, and any way the decisions were put off until the WTO was established.

When the WTO was established, the membership wanted to have nothing to do with the UN system, and refused to have any formal relations with the United Nations.

The WTO Directors-General, first Mr. Peter Sutherland and then Mr. Renato Ruggiero going around the world claiming the WTO to be was part of the Bretton Woods architecture and on the same footing as the IMF and the World Bank in overseeing the international economic system, the GATT/WTO staff felt encouraged and began to believe that they should also get the same emoluments and conditions of service like the Fund and the Bank staff. However, neither Sutherland nor Ruggiero have been able to convince the WTO members.

But the staff have been continuing the agitation. And, as a first step to their ultimate objective, the staff used the comparison with the Bretton Woods twins to demand that their own salaries, pensions etc should be delinked from the UN system. They have now pitched it in terms of their fears that the 'freeze' and cuts in the UN system, forced by the US defaults, would affect them.

Some staff calculations were made to suggest that delinking their pension arrangements may have no large budget effects immediately. However, Germany and others made their own calculations and found that in the medium- to long-term, it would have effects and they would be faced with demands for increased payments.

But the richer countries like the US, Germany etc however resisted this. Some of their delegates privately noted that the GATT staff were essentially those who had been servicing the negotiations in the contract and their demands to be put on a par with the Fund/Bank would place several of the professional staff salaries and emoluments at levels higher than that of several ambassadors to WTO of even the industrial countries.

The overall emoluments etc at the IMF and World Bank are generally 25% over those of equivalent jobs at the United Nations. But the two institutions have been able to get away with it, simply because their administrative expenses and costs don't figure in the budget lines of countries that Parliaments have to vote, and thus escape scrutiny. They have thus escaped the pressures for cost cutting at the UN and the other international organizations as well as generally the public sector of countries.

A study (commissioned by the Nordic countries) of the IMF, World Bank and regional development banks by Mr. Percy Mistry, a former World Bank financial advisor, brought out the high life-style of these institutions are at the expense of their borrowers, the developing countries and now the transition economies.

The administrative and operative expenses of the Fund and the Bank come out of their earnings -- interest on loans to developing countries (and now the transition economies) and the funds raised (for liquidity) on the basis of guarantees of the governments of developed countries which are invested in short-term market operations.

In recent periods, there have been pressures to bring the Fund/Bank salaries and emoluments in line with that of the UN system. But with the executive directors of the two institutions, benefiting by these arrangements, including the higher emoluments and perquisites, reforms in this direction are not easy.

However, they are certain to come as their operations have been coming under increasing scrutiny of NGOs and public interest groups, who would like these institutions to practice what they preach to others -- austerity, belt-tightening and labour market flexibility.