By Martin Banks - 1st November 2011
The question, however, is whether words will translate into action
Chris Bain
G20 leaders meeting in Cannes later this week are being urged to reform the global financial system.
The demand is being led by CIDSE, the international alliance of Catholic development agencies, which says EU and world leaders need to "move economies out of the crisis through just and development-friendly solutions".
These, it says, should include the financial transaction tax (FTT), which has been recently enthusiastically endorsed by commission president José Manuel Barroso and others.
Some, however, say that such a tax could potentially have a grave impact on the viability of financial centres such as the City of London.
But, speaking ahead of the two-day G20 event which starts on Thursday, the CIDSE president Chris Bain dismissed such fears.
He said, "A global tax on financial transactions could go a long way in stabilising the financial system and financing the fight against poverty and climate change.
"The European leaders should continue to promote the tax in the G20 and we hope those G20 leaders who have so far refused to appreciate its potential and urgency will support the tax too."
The nine middle-income developing countries that are members of the G20 account for 58 per cent of the world's poor and Bain says, "Vast numbers of people are becoming poorer even in the advanced industrialised G20 countries due to the global financial crisis."
He added, "Yet, the G20 continues to focus on an outdated growth model that leaves the poorest out in the cold – unable to benefit from or contribute to the economy.
"Joint action by the world's most advanced economies could mean a lot to the poorest at home and abroad, but with the wrong agenda it will only lead to further impoverishment and inequality.
"Few doubts exist about French president Nicolas Sarkozy's ambitions for the G20 summit. The question, however, is whether words will translate into action."
He added, "The G20 should take urgently needed measures to regulate global finance and discourage speculation, tackle sovereign debt issues, and reform the international monetary system. Slight course adjustments only will not do."
Elsewhere, the Catholic aid agency (CAFOD) has pitched into the debate, calling on the G20 leaders gathering in the French seaside resort to "put development at the core of its agenda or risk perpetual economic crisis".
In a briefing paper, it says it wants the G20 to "prioritise the development and climate change agenda or watch the huge disparity between the haves and have-nots continue to widen, and economic crisis become the perpetual norm".
CAFOD's economics analyst Tina Weller said, "A year ago in Seoul, G20 leaders set themselves the task of reining in an over-inflated, volatile and socially useless financial sector, and finding the urgent, crucial funds required to reduce poverty, and help the world's poorest countries deal with the impact of climate change.
"Those goals have been shamefully cast aside in the face of the global downturn, as G20 leaders focus on preserving their own futures, not safeguarding the world's."
She added, "The development agenda – heralded only last year as a vital plank to ambitions for balanced, sustainable and stable growth – has been forgotten as the UK prime minister David Cameron and his colleagues are plunged back into crisis mode and the latest emergency bailout.
"New ideas to find urgent, crucial funds for climate change adaptation and mitigation and poverty reduction risk being reduced to mealy-mouthed compromises as the narrow national commercial interests of finance and transport industries hold sway."
Weller said, "And as global commodity speculation threatens food security, leaders propose to do little more than to improve transparency in commodity markets, not assume their responsibility to intervene in markets in the interests of the poorest people."
Meanwhile, Action Aid, a leading civil society NGO, has thrown its weight similar demands.
In a statement issued on Tuesday, it said the G20 leaders have "unparalleled power to change the rules that govern availability of resources and the management of economies throughout the world".
It is specifically calling for action to tackle the food crisis in East Africa and elsewhere and on tax havens that, it says, "deprive developing countries of billions of dollars every year".
