Tuesday, 26 October 2010

World unions ask G20 Finance Ministers: Where are the Jobs?

International trade unions have accused G20 governments of being complacent in their claim this week that – according to the G20 Finance Ministers Communiqué – “global economic recovery continues to advance”. “G20 Finance Ministers have to look beyond the comfort zone of Wall St and the City of London, to the reality that millions of people are still losing their jobs and are now being made to suffer further austerity whilst the benefits accrue to the very banks and financiers who caused the global crisis in the first place,” said ITUC General Secretary Sharan Burrow. According to ITUC, the world economy is not out of the woods yet, and the commitments made by the G20 in London and Pittsburgh to put employment at the centre of decision-making are not being met. The G20 leaders’ meeting in Seoul next month must put jobs back on the G20 agenda.

While the Communiqué of the Finance Ministers meeting in Gyeongju, South Korea, talk about the need for international cooperation and coordinated responses to the crisis, there is scant evidence of governments working together, except to reinforce their apparent determination to achieve “fiscal consolidation” to appease the financial markets rather than to get growth into the global economy and put people back to work. The proposal by the US administration to set limits for both trade surpluses and deficits were watered down in the Ministers’ conclusions and now will have to be revisited in Seoul. “Whatever the mechanism, more balanced global growth that is consistent with falling unemployment has to be achieved by surplus countries expanding domestic demand more rapidly - not just through adjustment by deficit countries” said Burrow.

The Ministers also agreed to “complete financial repair and regulatory reforms without delay” – a statement challenged by the unions on the basis that work has hardly started to fully implement the measures which are required. In addition, their reference to the “importance of partnership between governments and business to promote economic growth beyond the crisis”, gives rise to further concern about the undue influence of business on the global agenda. The G20 should be establishing a broad based task force on jobs that includes all social partners instead of developing a cosy relationship with business elites that gives them a fast track to press for more of the labour market deregulation that led to the rising inequality before the crisis, said John Evans, General Secretary of the OECD Trade Union Advisory Committee.

The commitment to increase developing country influence on decision-making at the International Monetary Fund is welcomed by the unions, however the target date of January 2014 for this to be completed means that the current industrial-country bias at the IMF will remain in place for at least three years more. The Ministers’ reference to the IMF promoting “structural reform” is of great concern, given that this has always been understood to include further weakening of labour laws, such as the sweeping deregulation currently being pushed by the IMF on Romania. – A top-level international delegation of trade union leaders will press their concerns on these and other key issues in meetings with G20 leaders at their Summit in Seoul next month.

Tuesday, 12 October 2010

G20 must create new Seoul development consensus

Growth is necessary but not sufficient to lift poor people out of poverty, international agency Oxfam said as it published a briefing paper calling on the G20 to agree an historic new Seoul development consensus to help the world’s poorest. The paper, The Making of a Seoul Development Consensus, shows that people living in extreme poverty largely missed out on the benefits of growth in the last two decades of the 20th century. The poorest received only 1.5% of the $1.9trillion additional global gross domestic product (GDP) even though they accounted for a third of the world’s population at the start of the period. Today, the poorest 40% get just 5% of the world’s income.

By contrast, the poorest have been hit hard by the recent global slump with the World Bank estimating that 64 million have been pushed into poverty by the crisis and the poorest countries suffering a $65bn fiscal hole, forcing them to make cuts to health, education and agriculture spending. This comes at a time when millions of poor people are already struggling as a result of increased food prices and extreme weather linked to climate change.

G20 officials are meeting in Seoul on Thursday and Friday this week to lay the foundations of the G20’s approach to development ahead of the Heads of State summit next month. Jasmine Burnley, Oxfam policy adviser and co-author of The Making of a Seoul Development Consensus, said: “These startling statistics show the scale of the failure of the discredited Washington consensus and the need for G20 leaders to break with the past and provide real global economic leadership in tackling poverty. Economic growth is vital to help poor people escape poverty, but history teaches us that it is not enough on its own. We need to see a new Seoul Consensus that not only drives economic growth but is sustainable and ensures the poorest receive a fair share of the benefits.

“The G20 should ensure that investment in agriculture, free health care and education are stepped up, not reduced in response to the economic crisis. Malaria alone costs Africa $12bn each year in lost revenue and improvements in education are clearly linked to increases in GDP. In this way helping the poorest will boost the global economy to the benefit of all.”

Oxfam is calling on G8 countries to meet their existing promises to increase overseas aid. It also wants the G20 to take action to fix the hole in poor countries’ budgets by introducing a financial transaction tax on the banks, hedge funds and other institutions whose greed did so much to cause the economic crisis. Burnley said: “It cannot be right that while banks have received trillions in state bailouts poor countries are left without any alternative but to slash essential services to the poor as a result of a crisis they did nothing to cause. Taxing the financial sector is the fairest way to protect the poorest from the damage done by the global financial elite.”

* Please find the report >>> here.

Global Witness: British banks complicit in Nigerian corruption

British high street banks have accepted millions of pounds in deposits from corrupt Nigerian politicians, raising serious questions about their commitment to tackling financial crime, warned Global Witness in a new report, International Thief Thief. By taking money from corrupt Nigerian governors between 1999 and 2005, Barclays, NatWest, RBS, HSBC and UBS helped to fuel corruption and entrench poverty in Nigeria. What is so extraordinary about this story is that nearly all of these of these banks had previously fallen foul of the UK banking regulator, the Financial Services Authority (FSA), in 2001 by reportedly helping the former Nigerian dictator Sani Abacha funnel nearly a billion pounds through the UK. These banks were supposed to have tightened up their systems but as this report now shows, a few years later, they were accepting corrupt Nigerian money again.

There is no sign that the FSA has taken any action this time. Global Witness's new report is based on analysis of court documents from litigation in London by the Nigerian government to get funds returned from the UK that were stolen by two former state governors. British banks made it possible for Dieypreye Alamieyeseigha of Bayelsa State and Joshua Dariye of Plateau State to bring their corrupt loot into the UK. "Banks are quick to penalise ordinary customers for minor infractions but seem to be less concerned about dirty money passing through their accounts," said Robert Palmer, campaigner at Global Witness. "Large scale corruption is simply not possible without a bank willing to process payments from dodgy sources, or hold accounts for corrupt politicians," he added.

One of the banks profiled in the report is RBS, now majority owned by the taxpayer. RBS allowed former governor Alamieyeseigha to receive bribes and bring £2.7m into the UK. An English High Court judge found that at least £1.56m of these funds were bribes paid by a state contractor called Ehigie Edobor Uzamere, currently a Nigerian senator, in order to win a contract to build a fence around the governor's official lodge. Global Witness has asked RBS whether it carried out adequate checks on its customer and his funds, but has not had a reply.

Global Witness is concerned that banks and the FSA have yet to take this problem seriously enough. Anti-money laundering regulations require banks to identify their customers and the source of funds, but they are not being adequately enforced. Banks need to get much better at checking where the money is coming from and whether it was obtained through corrupt practices. The banks in this report may not have broken the law, but corrupt money still entered the UK and so our financial system is still complicit in corruption. This is an ongoing problem, as shown by the action taken against HSBC by the US regulators last week. They required HSBC's American arm to overhaul its due diligence systems following violations of US anti-money laundering laws and inadequate monitoring of transactions and customers, including ‘politically exposed persons' - ie the foreign senior officials who could be involved in corruption.

The British coalition government plans to abolish the FSA. Whatever body replaces it must take corruption seriously. The government and the new regulator must send a clear signal to the financial sector that corrupt money is not welcome. And the banks themselves must demonstrate much more clearly the steps they are taking to stop dirty money entering the financial system.

* Please find the report >>> here.

Thursday, 7 October 2010

Climate funds bypass hardest hit: Oxfam calls for a new global climate fund

The poorest people who need the most help to adapt to a changing climate are largely being bypassed by the small amount of climate funds now being disbursed, says a new Oxfam report published today at the UN climate change talks in Tianjin, China. The report, Righting Two Wrongs: Making a New Global Climate Fund Work for Poor People, shows that negotiators must create a Global Climate Fund that vulnerable populations in poor countries can access so that they are not left behind in proposed climate solutions. The study brings together evidence, which shows that in recent years:

* Less than a tenth of climate funds disbursed to date are estimated to have been for adaptation to help poor people in developing countries who are bearing the brunt of climate impacts.
* The world’s 49 poorest countries have received about one-eighth – $450m out of $3.5bn – of funding from the Global Environment Facility.
* Only $220m has been donated to fund adaptation plans (known as NAPAs) in the Least Developed Countries – just one tenth of the $2bn estimated total plan costs.

Oxfam is calling for a new Global Climate Fund to be set up at the UN climate summit in Cancún in December to govern public funds pledged by developed nations under the Copenhagen Accord. This fund must help address the failure to get adequate climate investments to poor people who bear the brunt of climate change’s impacts. “Righting Two Wrongs” calls for a new fund and broader finance system that is seen as legitimate by both developed and developing countries and that is representative, equitable, accountable, accessible, transparent and efficient. Poor governments must be able to directly access the fund and at least half of the money should be spent helping poor and vulnerable people adapt to a changing climate. In addition, a number of accountability measures are recommended, including ensuring that poor countries and women have an equal say in how the fund is managed and spent and that the fund is transparent as to where the money is going.

* Please find the report >>> here.

Tuesday, 5 October 2010

IMF and World Bank annual meetings: Global unions’ call

Concerned by the faltering pace of global economic recovery, which has yet to produce a real recovery for millions of workers and unemployed men and women, the ITUC and its Global Unions partners have called upon the 2010 Annual Meetings of the World Bank and the IMF (8-9 October in Washington) to reject austerity programmes and to support job-focused stimulus measures and investments in quality public services to assist in the global economic recovery. “The World Bank and the IMF must pay greater attention to the underlying problems that explain stagnant and declining real wages, including widespread violation of workers’ rights,” said ITUC General Secretary Sharan Burrow. “Redressing the declining income of working people and closing the gender pay gap should be major objectives of both institutions. The IFIs must work to build a more balanced and robust global economic recovery, which means that they should encourage and support countries that adopt labour and social protection policies aimed at reducing inequality.”

In a statement released on 5 October, the international trade union movement points out that austerity conditions applied in recent IMF loans have already been felt by working people, including the rapidly declining quality of public services that will cause long-term harm to countries’ development. Noting that the IMF’s lending capacity was tripled in 2009 in order to combat the global economic crisis, Burrow stated: “The Fund should use its vastly expanded financial resources to encourage countries affected by the global crisis to deploy counter-cyclical fiscal policies over longer periods of time until they have fully emerged from recession situations. Furthermore, the situation of Greece and other countries underscores the need for an effective sovereign debt restructuring mechanism that can be used by countries with unsustainable debt levels.”

A renewed recession potentially looming on the horizon threatens to further slow progress in attaining the UN Millennium Development Goals, already severely compromised due to negative economic growth in 2008-2009 and failures to meet aid commitments. Moreover, many countries have not moved forward with necessary regulations of risky financial activities – the kind that led to financial collapse in 2008. Global Unions call on the IMF to assist in the design and implementation of a financial transactions tax (FTT) as an effective and just means to generate revenue to repair damage caused by the financial crisis (including unacceptably high rates of joblessness) and to fulfil major international development and climate change finance commitments.

* Please find the Global Unions’ statement >>> here.

Call for a “Greenpeace of Finance”

Last week, French Green MEP Pascal Canfin launched a call for the establishment of a “Greenpeace of finance” to counter the powerful lobby groups which can dominate EU decision-making over reform of the financial sector. Strong civil society involvement is essential for ensuring that there is a democratic debate over EU policy in this area, he argued. “No NGO in Europe is capable of producing specific expertise like Greenpeace can on nuclear or Amnesty International can on human rights. We need a Greenpeace of finance,” Canfin said.

According to Canfin, “Historically the banking sector isn't a traditional action area for NGOs. The newness of the topic means that they do not spend very much money developing expertise in the area”. He called also for former bankers and traders to become involved.

A consultation was held between MEPs and civil society organisations (CSOs) on this issue under the title “Make Finance Work”, with the aim of exchanging experiences and building joint capacities to influence financial regulation, and of planning joint campaign activities for sustainable finance. Parliament offered to provide funding for the establishment of a “Finance-Watch” umbrella network for an initial period of six months, after which the CSOs would be expected to continue its running on their own. It was stressed by participants that funds would be needed to finance detailed academic studies which could serve as relevant input for drafting legislation, as this is a proven way to affect policy change.

However, despite official recognition by the EU of the importance of an “open, transparent and regular dialogue” with civil society, CSOs often claim that the EU institutions marginalise them and refuse to engage with their demands for greater openness. One notable example is the EU’s bio-fuels policy: last week five environmental groups wrote an open letter to the European Commission demanding that it live up to the Lisbon Treaty’s requirements for transparency over this issue. “We are worried that a pattern of scientific obfuscation and intransparent working is emerging within the Commission regarding the impact of the European Union’s bio-fuel policies,” reads the letter.