Twelve months on, finance still rules the world
Campaign groups today issued a sharp criticism of the G20’s timid attempts to deal with the financial system in the wake of the economic crisis. UK anti-poverty and environment groups told G20 leaders meeting in Pittsburgh this weekend (1) that the opportunity to create a fairer world was slipping through their fingers.
Jubilee Debt Campaign, War on Want, World Development Movement, Friends of the Earth and the Bretton Woods Project (2) say that while Western leaders look for ‘green shoots’, the vast majority of the world’s population continues to suffer the impact of a crisis caused by the excesses of the financial sector.
They argue that without significant structural reform, any new growth will be unsustainable and volatile, deepening the inequalities in the global economy.
In particular, the groups are demanding action on five key areas:
1. Tough action to regulate the financial sector – including prohibitions and controls on speculation, derivatives trading, complex financial instruments short-term or damaging investment, and, vitally, much stronger action to close down tax havens;
2. End the bonus culture – ending incentives for finance workers to create unsustainable lending and giving a fair wage for a fair day’s work;
3. Radical reform of the global economy – most urgently the International Monetary Fund and other multilateral institutions, ensuring they are democratic and accountable, and the creation of a debt tribunal to cancel unpayable and unjust Third World debts;
4. Massive investment in ‘Green Jobs’ – both helping the UK economy to create sustainable growth, and assisting developing countries, through grant funding and technology transfer, to develop in a sustainable manner.
5. A currency transaction tax to curb bank profits and bonuses. As well as restraining bank excesses. Such a tax could generate billions for developing countries to use in the fight against poverty.
Ruth Tanner from War on Want said:
“The financial crisis has provided a once-in-a-generation opportunity to radically overhaul the structures of global finance – to bring an end to the rule of the banks and the casino culture that has created the gross inequalities that characterise today’s world. We need changes even bigger than those Roosevelt made as a result of the last Great Depression. Instead we are getting more of the same.”
Nick Dearden from Jubilee Debt Campaign said:
“While millions of people suffer the results of a crisis that was not of their making, those who are responsible are allowed to go on behaving as if nothing has happened. The G20 have ignored radical calls for action from the developing world – to transform the global economy, cancel debts, and stop forcing free market fundamentalism onto the majority. History will not forgive the failure of the G20 to meet this challenge.”
Asad Rehman from Friends of the Earth said:
“The alarm bells are ringing loudly - world leaders must wake up to the threat of catastrophic climate change and take urgent steps to slash emissions. The days of putting profit before people and the planet must end if we are to have any chance of a truly sustainable future. But it’s not all doom and gloom. A new economic approach based on cutting energy waste and developing the world’s vast green energy sources will create millions of new jobs and business opportunities, reduce our reliance on fossil fuels and ensure a safer, cleaner future for us all.”
Campaigners cited continued signs that the economic crisis is affecting millions of people and that reforms to date had done very little to create a more sustainable economy:
- Up to 60 million people could be thrown out of work by end of 2009, bringing total unemployment to 240 million, 90 million of them young people;
- 200 million workers, mostly in developing economies, are at risk of being pushed into poverty;
- An additional 700,000 babies are likely to die before their first birthday as a result of the crisis – with girls making up the vast majority of this figure;
- In the UK almost 2.5 million people are now jobless, nearly a million of them under 25;
- UNCTAD’s chief economist stated recently: “All these rises in markets are said to reflect economic recovery but it is just another bubble… Banks have been rescued by the taxpayer and are just returning to casino-style speculation that brought us trouble in the first place.”
- Adair Turner, Chair of the Financial Services Authority said on Tuesday that “British citizens will be burdened for many years with either higher taxes or cuts in public services – because of an economic crisis whose origins lay in the financial system, a crisis cooked up in trading rooms where not just a few but many people earned annual bonuses equal to a lifetime’s earnings of some of those now suffering the consequences.…. We need radical change.”
Jubilee Debt Campaign on 07932 44722
Asad Rehman, Friends of the Earth on 077201 47280
Paul Collins, War on Want on 07983 550 728