Finance Ministers in Paris: Early acid test for G20

The world’s leading economies must act now to stop the price of basic foods from surging further out of the reach of poor people. They must also commit to a Financial Transaction Tax (FTT) to help millions of people hit by the economic crisis and climate change. International agency Oxfam has welcomed the promise of action on these issues from France, the current G20 chair. Oxfam says that this week’s Finance Ministers’ meeting in Paris, on Feb 18-19, is an early acid test as to whether the G20 can turn words into action.

“Finance ministers will define the G20’s development credentials this weekend. They could make or break Sarkozy’s pledges to tackle the food price crisis and push through an FTT,” said Oxfam spokesperson Luc Lampriere. “The G20’s money ministers must now plan how exactly they will deliver on these promises – or otherwise G20 leaders will be left looking like emperors with no clothes.” Oxfam is seeing mounting impacts on poor people as a result of the economic crisis and food price hikes. Countries are being affected differently, but in general poor people are having to spend more of their limited income on food, and are therefore eating less, less often, and in some case less nutritious food. “We see anecdotal evidence of people slipping into food insecurity and malnourishment,” Lampriere said.”We hear about affected rural communities cutting back on health spending and having to sell productive animals earlier than they normally would in order to buy food.”

On a Financial Transaction Tax, Oxfam says: “This is the zeitgeist tax, a popular and progressive policy worth as much as $400bn a year. It would be small change from those who can most afford it but make a big difference to those who most need it. A financial transaction tax would be like a breath of fresh air clearing away the stench of bankers’ bonuses and offering hope to those trapped by the economic crisis,” he said. Oxfam is calling for an average tax of 0.05% on share, currency, bond and derivative deals. Recent research for Oxfam shows that 56 of the poorest countries in the world face a combined $65bn hole in their budgets as a result of the economic crisis. Oxfam also wants the G20 to endorse a recent finding by the UN High Level Advisory Group on Climate Finance (AGF), that at least $12 billion a year can be raised from levies on international transport, particularly on shipping.