Pope Francis’ message to World Economic Forum in Davos

Francisco WFTo Professor Klaus Schwab Executive Chairman of the World Economic Forum
I am very grateful for your kind invitation to address the annual meeting of the World Economic Forum, which, as is customary, will be held at Davos-Klosters at the end of this month. Trusting that the meeting will provide an occasion for deeper reflection on the causes of the economic crisis affecting the world these past few years, I would like to offer some considerations in the hope that they might enrich the discussions of the Forum and make a useful contribution to its important work. Continue reading

Special high-level meeting of the Economic and Social Council with the Bretton Woods Institutions, the World Trade Organization and the United Nations Conference on Trade and Development,12-13 March, 2012

Representatives of Civil Society

In the name of the members of the NGO Committee on Financing for Development, I thank you Mr. President for the chance to add some thoughts on the topic of financing sustainable development.

As we face an ongoing financial and economic crisis, the deepening crises of climate change, and ever-widening inequality; as we look to Rio +20, it is time to learn from the past. We must move into the future in a more integrated and coherent fashion. In 2002, two big Development Conferences of the United Nations happened within a few months of each other – the Financing for Development conference in Monterrey, Mexico and the World Summit on Sustainable Development in Johannesburg. But those most actively involved in preparing for the 2 meetings seemed largely ignorant of the other process. We cannot afford to perpetuate false distinctions and separationsIn preparing for Rio +20, the global community must urgently take a fresh look at the entire system of financing for development and redirect it to a clearer focus on sustainable development. We need to look at the institutions that are entrusted with the FfD agenda.  An expanded institutional framework that includes intermediary and local NGOs (by providing them access and investing in their capacities) will be absolutely critical if the goal of sustainable development is to be taken seriously. Such institutions (at all levels) will need a different set of performance metrics to gauge their ability to deliver on their developmental goals rather than focus only on financial accounting,

The transition to a green economy may provide impetus to finally bring all the pieces together, to integrate the three pillars of a sustainable world that goes beyond mere rhetoric.  Financing sustainable development calls for levels of cooperation between us never seen before. We must move beyond an environment vs. development divide.

Irrespective of whatever other differences one may or may not have with international financial institutions (IFIs), it becomes increasingly clear they operate at a very different scale from where the problem happens and where change is likely to happen.

The hurdle is less an ideological one, than one of capacity. Those responsible for financing development are more comfortable as managers of money than facilitators of development. So the means (financing) is decoupled from the end (sustainable development), not only in how claims are made for financing but how the institutional efficacy is accounted for. This has contributed to the deepening crisis of legitimacy of development finance The institutions best suited to raise large amounts of international finance are least suited to disbursing these resources at the level and in a manner that gives sustainable development on the ground, in the village as well as in the urban setting the best chance of really happening.

None of the institutional players – the UN system as a whole, the BWI, IFIs , the G20 -  can hope to achieve the sort of development that speaks to the threefold demand – environmental, economic and human/social – without effective partnership that can bring the financing resources to the places where most impact and most change can be achieved. So NGOs and the private sector must be constantly involved in the chain that delivers these resources.

Participants at the Meeting of ECOSOC, World Bank, IMF, WTO and UNCTAD March 12

Reactions to the financial crisis suggest that the problem is not lack of capital. There is big money out there!  The problem is that most of the people who hold the cash are not interested in long term investment to build strong and effective enterprises. A significant proportion of trades made each day in the financial markets are made by high-speed computers in securities that are only held for a fraction of a second.  That is not the sort of investing that is likely to create jobs that offer decent employment and build sustainable economies. As the majority of financing will come from private sources, much more debate is needed on regulation. Without significant regulation of the financial markets, it’s unlikely that a new paradigm of productive investment will become possible.

Some points we wish to emphasize:

  • Failure to meet ODA commitments by most developed countries is a continuing scandal. This underlines the need for a renewal of the multilateralism, upon which the United Nations is built, that reaches beyond sectional interests to search for common solutions that serve the needs of all countries.
  • With Mexico chairing the G20, it is important that a Financial Transactions Tax as an innovative source to finance sustainable development, so strongly promoted by France, be not pushed aside.
  • Resources from taxation are vital for countries trying to advance their national development. It is past time for an intergovernmental body, housed within the UN, to promote greater communication and international cooperation in tax matters.
  • Heiner Flassbeck suggests that UNCTAD be given control for setting stock prices for agricultural raw materials. Only producers, traders and users of these materials could work the futures markets. This would remove from speculation those commodities that people need to survive. It would halt the dangerous financialization of food markets.

Analysis, cooperation and delivery pitched to the most appropriate local level of life and need: these are the things that will give us a fighting chance of meeting the Millennium Development Goals.

Kevin Dance, Passionists International and Chair of NGO Committee on Financing for Development.

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Social investments deserve priority in economic recovery schemes

The Report on the World Social Situation 2011: The Global Social Crisis, produced by the Department of Economic and Social Affairs (DESA) of the United Nations, explores the ongoing adverse social consequences of the 2008-2009 financial and economic crisis – the worst since the Great Depression of the 1930s.

One consequence of the crisis is that unemployment rose sharply to 205 million people in 2009 from 178 million in 2007. The loss of jobs means not only a loss of incomes but also an increase in vulnerability, especially in developing countries without comprehensive social protection, notes the report.

Various estimates suggest that between 47 million and 84 million more people fell into, or were trapped in, extreme poverty because of the global crisis, which occurred immediately after food and fuel prices had risen sharply. So we have over a billion people living in hunger in the world, the highest on record.

The report states that the global economic downturn has had wide-ranging negative social outcomes for individuals, families, communities and societies, and its impact on social progress in areas such as education and health will only become fully evident over time.

“The increased levels of poverty, hunger and unemployment due to the global crisis will continue to affect billions of people in many developed and developing countries for years to come,” the report says.

It is essential that governments take into account the likely social implications of their economic policies. When economic policies are decided in isolation from their social outcomes there can be dire consequences for poverty, employment, nutrition, health and education.

“There is renewed realization that social policy considerations, especially productive employment, must be given greater importance within economic policy,” said Jomo Kwame Sundaram, Assistant Secretary-General for Economic Development. “Thedisconnect between economic policies and their social consequences can create a vicious cycle of slow growth and poor social progress.”

The economic crisis is a reminder that it is essential for people to be healthy, educated, with adequate housing and well fed if they are to be more productive and better able to contribute to society.

Whether we focus on climate change, or we work to wipe out the scourge of poverty, or we give our attention to protecting the human rights of the most abused and vulnerabl

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Innovating in Justice, Innovating in Finance: Time for a Financial and Currency Transaction Taxes

Date: 22nd September 2011
Time: 10:00 am – 12:00 pm
220E 52nd Street, New York
(Salvation Army Auditorium)

Moderator:
Manuel Manonelles
Director,  UBUNTU Forum

Speakers:
José Maria Fernández López de Turiso
Director-General of Planning and Evaluation of Development Policies,  Ministry of Foreign Affairs, Spain

Poul Nyrup Rasmussen
President of the Global Progressive Forum and former
Prime Minister of Denmark

Julien Meimon
Permanent Secretariat, Leading Group on Innovative Financing for Development

James Paul
Executive Director, Global Policy Forum

William Pace
Executive Director, World Federalist Movement

Kevin Dance
Chair NGO Committee Financing for Development

Register at: http://bit.ly/rmsX3D

ECOSOC High-Level meeting with Financial and Trade Institutions

From left: Sha Zukang, Under-Secretary-General for Economic and Social Affairs; Secretary-General Ban Ki-moon; Lazarous Kapambwe, Permanent Representative of the Republic of Zambia to the UN and President of the Economic and Social Council (ECOSOC); and Muhammad Shaaban, Under-Secretary-General for General Assembly Affairs and Conference Management; are pictured during a high-level meeting of ECOSOC with the Bretton Woods Institutions, the UN Conference on Trade and Development (UNCTAD) and the World Trade Organization (WTO). UN Photo/Paulo Filgueiras

Statement by Fr. Kevin Dance, Chair NGO Committee on Financing for Development and Passionists International

Thank you Mr. President.

Even the most powerful governments failed to have the right policies in place to prevent excessive risks taken by the financial industry. The damage done has been contagious. We’ve all been affected though not equally. Let’s face it – our world has changed!

Many of the problems spoken of here are global, but policies to address them are national. There is still much disagreement on basic long-term issues such as trade, climate change or financial stability. We can’t continue to think exclusively in terms of national effort. We need to be working towards an overarching global structure that can help moderate the risks, balance the benefits and respect the right of every country to take an active role in shaping the policies that affect its citizens and its prosperity.

We hear over and over a call for coherence and an integrated approach to the global challenges we face. But we still want to operate in silos of self-contained units of influence. We need global governance, not global government. The expertise of such bodies as the Bank, the Fund, G20…continues to be relevant and needed. But they can no longer function with full autonomy and no accountability to the rest of the international community.

Every institution we create will be imperfect. But we badly need a mechanism that comes closer to embodying the principles of universality, inclusiveness, transparency and legitimacy.

As we face global challenges beyond the resources of any one country to meet, we need an overarching instrument that can help us look to longer term rather than just short term solutions; that can provide a second opinion to balance the decisions of more technical and less representative bodies; that can coordinate the development of policy and planning to minimize the variety of risks that will be a continuing part of our future and make it possible to share the benefits.

  •  Because of its universality and legitimacy, the United Nations must become the forum for policy creation on financing for development, with human rights as its foundation and framework.
  • It is time to grow the FfD Office into a functional commission on Financing for Development.
  • The Working Group of the General Assembly must be enabled to continue its unfinished work. We strongly support the position of the G77 and China is calling for this and for the prompt creation of a panel of experts. A Panel of Experts, representative and independent of politics or ideology, could become the source of a valuable “second opinion” in policy making. It could alert us to long-term global trends, how they are interconnected and what is their risk potential.
  •   Tax systems are vital to development, but there is an urgent need for greater cooperation between States, especially in combatting tax evasion. We support upgrading the UN Tax Committee to an intergovernmental and multi-stakeholder body to fully reflect the importance of inclusive international tax cooperation. This forum will enable all countries to make their voices heard in their own words. Such a strengthened tax body would complement not threaten the work of the OECD.
  • We must move towards a Global Economic Council for Sustainable Development. We have long spoken of the triple bottom line – economic, social and environmental.  We will make real progress when we do more consistently what we are doing here – trying to listen to one another. I was pleased to hear Mr. Priyadarshi call for not less but more meetings such as this one.

The time is past when we can effectively deal with economics, social reality and ecological necessity in separate places. We, with various skills and capacities, share a common humanity and a common future. There is an urgent need to rebuild the trust on which this institution was founded. Only by taking the risks to rebuild this mutual trust can we can find solutions to match the enormity of the global challenges that face us.

Thank you Mr. President.

Kevin Dance

March 11, 2011

We Need a New Model of Development that Promotes Justice for All

The room of the UN Economic and Social Council...

The UN Economic and Social Council Chamber

At the end of the Special High-Level Meeting of ECOSOC with the Bretton Woods Institutions, the World Trade Organization and the United Nations Conference on Trade and Development held in New York 10-11 March 2011, H.E Lazarous Kapambwe, President of the UN Economic and Social Council, said “You must agree with me that we succeeded in having an open exchange of views and experiences between government representatives and major institutional stakeholders.” Indeed it outshone most UN meetings which are often a series of prepared statements following one after the other. Instead there was some real exchange of ideas. Even seating arrangements were different. NGOs and the Private Sector were among the representatives of governments and financial and trade bodies, rather than at the very back of the room.

We were reminded of the very uneven progress in working towards the MDGs. (Millennium Development Goals). This is particularly true of food production, creating jobs for people, taking seriously the need to find alternative sources of energy and building infrastructure to support a new way of living together on a sorely threatened planet.  Volatile food prices and the need in some of the poorest nations to import food increase the risk of a “devastating food crisis” in these countries.

We must learn and practice cooperation in the service of a people-centred development. To achieve this, we must better coordinate our policies at national, regional and global levels. Partners in development, those giving and those receiving must be more open and honest in their accountability to one another.

The United Nations must be made stronger in its responsibility to oversee global economic governance.  It must become more unified and coordinated in its whole operating system.

Over the course of the 2-day meeting there was a debate or exchange of views on four (4) themes

  • Financial support for development efforts of Least Developed Countries (LDCs): development finance, including innovative mechanisms, aid for trade and debt relief.

LDCs include countries such as Haiti, Yemen and Sierra Leone. They have an annual income of less than $900 per person. Malnutrition, high rates of children dying in early childhood and high rates of illiteracy for adults are commons marks of the needs of such countries.

  • Financial support for developments of Middle-Income Countries (MICs): development cooperation, trade, capital flows, policy space and reserve systems.

Middle-income countries (MICs), such as Brazil, China, Thailand, India and Indonesia are more economically developed than the world’s poorest countries, and often have a large, affluent middle class. But many MICs also have large numbers of people living in extreme poverty and healthcare demands often outstrip available resources. These challenges are made worse by increase of chronic diseases such as asthma and diabetes.

  • Follow-up to the 2010 MDG Summit outcome: building the global partnership for development, including in response to new challenges and emerging issues.
  • The role of the UN system in global economic governance.

NGOs made 11 interventions in all during the exchange.

We called for a new model of economic development that will help to create decent jobs and that narrows rather than widens the gap between those living in poverty and those living in wealth. We called the World Bank and the International Monetary Fund to return to their original purposes: the Bank to serve the reconstruction of the world on the principles of equity and justice: the IMF to iron out the terrible fluctuations in exchange rates in currencies that can swamp the economies of poor and developing countries. We called on the World Trade Organization to remove the farm subsidies that work against small scale farmers and women who grow the majority of the world’s food and to promote a global system of trade that is based on fairness.

We called for the introduction of a tax on financial transactions to slow speculation that causes sudden surges in capital flows across borders that destabilizes the economy of weak countries. The money collected must be dedicated to development and the achievement of the MDGS. Greater cooperation and communication between countries in tax matters to address tax evasion and the use of tax havens is needed to work towards a more equal world.

We called for a reform of the international financial system (World Bank, IMF, Regional Development Banks), to recognize the world changes that have taken place with an end of colonialism and the appearance of so many new nations. These institutions must become servants not masters of the global economy.

Finally we also called for reform of the United Nations to make it more responsive to present demands of an interconnected world. These changes should make it more accountable and more effective in implementing the commitments that are made in the UN processes.

Passionists International, through Kevin Dance, was able to make a statement on the need for far greater cooperation between the financial institutions and the UN in creating a more level playing field of justice for all people, but especially for those most disadvantaged by the recent global economic and financial crises.

ECOSOC high-level meeting with BWI, WTO and UNCTAD
“Global Governance”, 11 March 2011

Intervention by Kevin Dance, Chair, NGO Committee on Financing for Development and Passionists International

Thank you Mr. President.

Even the most powerful governments failed to have the right policies in place to prevent excessive risks taken by the financial industry. The damage done has been contagious. We’ve all been affected though not equally. Let’s face it – our world has changed!

Many of the problems spoken of here are global, but policies to address them are national. There is still much disagreement on basic long-term issues such as trade, climate change or financial stability. We can’t continue to think exclusively in terms of national effort. We need to be working towards an overarching global structure that can help moderate the risks, balance the benefits and respect the right of every country to take an active role in shaping the policies that affect its citizens and its prosperity.

We hear over and over a call for coherence and an integrated approach to the global challenges we face. But we still want to operate in silos of self-contained units of influence. We need global governance, not global government. The expertise of such bodies as the Bank, the Fund, G20…continues to be relevant and needed. But they can no longer function with full autonomy and no accountability to the rest of the international community.

Every institution we create will be imperfect. But we badly need a mechanism that comes closer to embodying the principles of universality, inclusiveness, transparency and legitimacy.

As we face global challenges beyond the resources of any one country to meet, we need an overarching instrument that can help us look to longer term rather than just short term solutions; that can provide a second opinion to balance the decisions of more technical and less representative bodies; that can coordinate the development of policy and planning to minimize the variety of risks that will be a continuing part of our future and make it possible to share the benefits.

  • Because of its universality and legitimacy, the United Nations must become the forum for policy creation on financing for development, with human rights as its foundation and framework.
  • It is time to grow the FfD Office into a functional commission on Financing for Development.
  • The Working Group of the General Assembly must be enabled to continue its unfinished work. We strongly support the position of the G77 and China is calling for this and for the prompt creation of a panel of experts. A Panel of Experts, representative and independent of politics or ideology, could become the source of a valuable “second opinion” in policy making. It could alert us to long-term global trends, how they are interconnected and what is their risk potential.
  • Tax systems are vital to development, but there is an urgent need for greater cooperation between States, especially in combatting tax evasion. We support upgrading the UN Tax Committee to an intergovernmental and multi-stakeholder body to fully reflect the importance of inclusive international tax cooperation. This forum will enable all countries to make their voices heard in their own words. Such a strengthened tax body would complement not threaten the work of the OECD.
  • We must move towards a Global Economic Council for Sustainable Development. We have long spoken of the triple bottom line – economic, social and environmental.  We will make real progress when we do more consistently what we are doing here – trying to listen to one another. I was pleased to hear Mr. Priyadarshi call for not less but more meetings such as this one.

The time is past when we can effectively deal with economics, social reality and ecological necessity in separate places. We, with various skills and capacities, share a common humanity and a common future. There is an urgent need to rebuild the trust on which this institution was founded. Only by taking the risks to rebuild this mutual trust can we can find solutions to match the enormity of the global challenges that face us.

Thank you Mr. President.

Speculators are adding to world hunger…..

The price of basic foods is rising dramatically in Egypt because commodities are now subject to various kinds of speculation. Wall Street damaged the housing market in America and is now going after the food supply worldwide. This poses a longer term threat to Egypt. The conflict is being fueled by actions of the financial markets and the stock exchanges in US particularly.

Current soaring food prices are made worse because of record levels of financial speculation. Hedge funds, investment bankers and pension funds have poured more than $200bn into food markets since the financial crisis. They are betting on the rising price of food.

Many speculators try to avoid inflation by throwing money into food markets, betting on a long term rise in food prices, but this investment does not reflect the current state of global food markets. Food is not scarce; it is being held back to create an artificial shortage, to push up demand and raise the price.

This causes the market to over-react to shortages in supply or rising demand, pushing food prices ever higher. In first week of January 2011 the UN’s food price index saw record high prices for food and  riots broke out in Algeria. The present prices have gone beyond those seen during the global food crisis of 2008 when over 1 billion went short of food and food riots broke out.

French President Nicolas Sarkozy, who is chair for this year of the Group of 20 leading economies (G20), has named food price volatility as a priority

World Bank President Robert Zoellick said recently: “When prices of staples soar, the poor bear the brunt. Without global action, people in poor countries will be deprived of adequate and nutritious food, with tragic consequences for individuals and for their countries. The G20 should agree to put food first – because food is the essence of life”.

To improve transparency and reduce excessive speculation, the US and the EU are developing regulations. The largest banks at the centre of the commodity speculation are Goldman Sachs, Bank of America, Citibank, Deutsche Bank, HSBC, Morgan Stanley and JP Morgan. But these banks are lobbying hard to weaken these proposals, so they can keep profiteering from betting on food prices.

Murray Worthy of the World Development Movement said: “Food isn’t an asset; it’s fundamental to human life. These markets exist to allow people to buy and sell food”. They are being used to make huge profits for speculators, at the expense of people’s survival. These markets must be brought back under control, limiting excessive speculation by hedge funds and investment bankers.

Passionists International has recently signed a petition to The European Commission which is drafting new financial regulations and has launched a public consultation on their proposals.

To read more about this basic matter of justice see http://www.wdm.org.uk/

Kevin Dance, C.P.