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► The bubble bursts ► NASDAQ and Wall Street plummet ► The global economy shivers ► Then recovers ► And financial speculation explodes globally.

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Presentation on theme: "► The bubble bursts ► NASDAQ and Wall Street plummet ► The global economy shivers ► Then recovers ► And financial speculation explodes globally."— Presentation transcript:

1 ► The bubble bursts ► NASDAQ and Wall Street plummet ► The global economy shivers ► Then recovers ► And financial speculation explodes globally 2000

2 Stocks in companies traded on regulated stock markets TRADITIONAL CAPITALISM Corporate bondsGovernment bonds Banking system Pension Funds Private/Commercial property ShareholdersEmployees Personal and corporate taxation on companies raise capital finance for infrastructure (roads, schools) Circulates credit revenues assets capital gains consumption (VAT) Recurrent spending Debt service on capital/ infrastructure investments Public sector

3 CASINO CAPITALISM HEDGE FUNDSPRIVATE EQUITYSTRUCTURED FINANCIAL PRODUCTS house extensions; car; holiday; college fees OFFSHORE HAVENS PPPs Corporate bonds replace Governments bonds Often funded by private equity for which a major source of finance MORE BONUSES HUGE BONUSES !MINIMIZE TAXES ! MORE COMMISSIONS PROPERTY  SUB-PRIME MORTGAGES Unlisted on stock markets Off bank balance sheets Escape banking Regulations Buy a house (110% mortgage) Raise your mortgage to finance: PENSION FUNDS

4 GLOBAL IMBALANCES The United States N o 1 economy  From balanced budget (Clinton) Coming out of « the lost decade » EU/Euro zone N o 3 economy  Growth slowing Oil/gas producers Emerging economies Developing countries Exchange rates USD, Euro, Yuan Japan N o 2 economy SWFs  To record public deficits (Bush: taxcuts and Iraq war)  Higher unemployment Russia, Gulf States, Nigeria, Venezuela, Norway = Financial flows  Big trade deficit Other OECD countries Eg Australia: Commodities China India, Brazil, Chile, South Africa outsourcing big trade surpluses Africa, Asia/Pacific, Central/South America, Caribbean

5 Global imbalances + fundamental underlying imbalances between  the financial sector and the real economy  between bargaining power and incomes of employers and employees So we had debt driven consumption Source: Ron Blackwell, AFL-CIO IMBALANCES

6 AUGUST 2007 Sub-prime mortgages Structured financial products Where are the toxic products? Inter bank lending freezes THE PARTY STOPS ! DECEMBER 2007 Central banks start to ease credit and money supply AUGUST 2008 US Fed bails out Fannie Mae and Freddie Mac 15 SEPTEMBER 2008 Lehman Brothers collapses 16 SEPTEMBER 2008 US injects $85bn into American International Group (AIG)


8 Drop in aid from donor countries hit by financial crises in 90s (Scandinavia) Source: Roodman (2008), History Says Financial Crisis Will Suppress Aid

9 Drop in aid from donor countries hit by financial crises in 90s (Japan) Source: Roodman (2008), History Says Financial Crisis Will Suppress Aid

10 Source: Global Campaign for Education IMF CONDITIONS: WAGE CUTS FOR TEACHERS AND OTHER PUBLIC EMPLOYEES In 9 out of 23 supported countries

11 Education on the brink Will the IMF’s new lease on life ease or block progress towards education goals? Global Campaign for Education. April 2009

12 THE IMPACT ON EDUCATION, TEACHERS AND OTHER EDUCATION EMPLOYEES USA EUROPE Central and Eastern UkraineHungaryLatvia GDP-10%-5%-12% Japan Emerging economies Developing countries Western

13 OPTIMISTIC SCENARIORecovery in 2 to 3 year’s time PESSIMISTIC SCENARIOStructural change/Paradigm shift  Social and political upheaval  Interaction with food crisis  Consequences of climate change


15 LESSONS FROM THE GREAT DEPRESSION Table 1. Variation among countries

16 LESSONS FROM THE GREAT DEPRESSION Source: William D. O'Neil (2009) Wikipedia Table 2. US Recovery

17 LESSONS FROM THE GREAT DEPRESSION « The situation is more complex today » Joseph Stiglitz:

18 INSTITUTIONS IMF To advocacy for global stimulus But still applying the old conditions – cuts in public sector Rescue packages: 13 countries so far and more to come WORLD BANK BIS Development and combatting poverty Central bankers Financial Stability Forum FSF OECD 30 industrialized democracies + 5 candidate + 5 « enhanced engagement » countries From neo-liberal ILO Employment UNESCO Education WTO Trade The UN FSB Financial Stability Board G20

19 G7 G8 G14[BRIC] Canada, France, Germany, Italy, Japan, UK, US Canada, France, Germany, Italy, Japan, UK, US + Russia Canada, France, Germany, Italy, Japan, Russia, UK, US + Brazil, China, Egypt, India, Mexico, South Africa Brazil, Russia, India, China VARIABLE GEOMETRY G20 Brazil, Canada, China, France, Germany, India, Italy, Japan, Mexico, Russia, South Africa, UK, US, Argentina, Australia, Indonesia, Saudi Arabia, South Korea, Turkey, European Union +

20 SUMMITS G20 Washington, November 2008 London, April 2008 PITTSBURGH SUMMIT, 24 SEPTEMBER, with IMFBISWBOECDWTO + ILO Global Unions, NGOs UN GENERAL ASSEMBLY, NEW YORK, OPENS SEPTEMBER 26 NGOs G8/G14 ITALY, JULY 2009 Global Unions Stiglitz Commission Summit on the crisis June 24-26

21 VET ECE K-12 H. ED & R INVESTMENT IN PEOPLE THROUGH EDUCATION DEFENDING RESOURCES FOR EDUCATION STAFFING Teachers Support Staff INFRASTRUCTURE Buildings Facilities - qualified for quality education - key actors in safe schools and colleges Hire, not fire In a downturn, its time to upskill The next generation – every nations’ future An equal start and equity for families KEEPING TEACHERS AND SUPPORT STAFF WORKING IS A STIMULUS PACKAGE IN EVERY COMMUNITY Investing in human progress + capacity for innovation

22 REASSERTING VALUES VALUES EI’s VISION FOR EDUCATION AND SOCIETY  Education is a public good not a commodity.  Education is central in our societies in many ways;  Quality education requires quality teachers  Education unions should be key actors  Education is a human right. social and economic; building and defending democracy; individual fulfillment; community development;  Education should promote equity non-discrimination understanding among peoples

23 Keeping a global, long-term vision  Reducing poverty at a time when one billion people live under $1 a day  Social justice at a time of growing inequality within economies and societies  Peace at a time of intolerance and conflict within countries  Sustainable societies at a time of global warming and climate change  Adapting to the unknown at a time of economic uncertainty and continued technological advances “Choosing a type of education means choosing a type of society” UNESCO ADG EDUCATION NICK BURNETT

24 Reaffirm the centrality of education Education is a catalyst for development. It: Contributes to economic growth Reduces poverty Improves health, nutrition, income and livelihoods Promotes citizenship and democratic participation Is a condition for achieving all the Millennium Development Goals Knowledge, skills and values to promote informed choices and a more sustainable future UNESCO ADG EDUCATION NICK BURNETT

25 Jobs + Income + EquitableIncomeDistribution Investment in public education wins on all three Mike Kahn – NEA Research

26 Investing in education creates jobs… A $100 million tax cut results in… …a net loss of 2,200 jobs A $100 million investment in public education results in… …a net gain of 2,200 jobs. Source: School Funding, Taxes, and Economic Growth, April 2004School Funding, Taxes, and Economic Growth Mike Kahn – NEA Research

27 $1 $7 Every $1 invested in pre-school education provides an economic return of $7 Investing in Public Education is a smart economic development strategy America’s economy will grow by $309 $309 billion if all high school students graduate $37,388 $167,990 A high school graduate’s contribution in income tax revenues would result in savings of $37,388 in healthcare costs and $167,990 in crime costs over his/her lifetime 27 Source: The Price We Pay, Economic and Social Consequences of Inadequate Education,The Price We Pay, (2007) Brookings Institution Press Mike Kahn – NEA Research

28 MOBILIZATION A clear vision for education and society Powerful arguments for investment in people Capacity to mobilize  Globally  Nationally  Locally A strategy of proposition World Teachers’ Day: 5 October EI Action Plan:

29 COALITIONS THE GLOBAL CAMPAIGN FOR EDUCATION GLOBAL ACTION WEEK, APRIL 2009 13.3 million took part in « The Big Read » GLOBAL UNIONS 200 million members in some 170 countries worldwide


31 Blog:

32 NEA GLOBAL EDUCATION SUMMIT San Diego, June 27, 2009  Gracias  Merci  Thank you Bob Harris Education International

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