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May 13, 2010

Addressing global inequality

Reuel S. Amdur

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Fixing the global economy was one of three thrusts of an event entitled "Climate Change and Poverty: Off the Table?" held April 28 at the University of Ottawa. The others were poverty, inequality and climate change.

John Mihevc, who has a history of global justice advocacy, represented Kairos and chaired the event.

The principal presenters were Gauri Sreenivasan, policy coordinator for the Canadian Council for International Cooperation, and development economist Charles Abugre, director of campaigns for the Kenya-based UN Millennium Development Goals.

These goals, adopted by 189 nations and signed by 147 heads of state at a UN summit in 2000, are:

• eradicate extreme poverty and hunger;

• achieve universal primary education;

• promote gender equality and female empowerment;

• reduce child mortality;

• improve maternal health;

• combat HIV/AIDS, malaria and other diseases; ensure environmental sustainability; and

• develop a global partnership for development.

In his presentation, Abugre said we are living in the age of the most incredible global prosperity. The Industrial Revolution gave us the ability to transform resources that can improve the quality of life immeasurably—we have less death from starvation, and greater opportunities to solve our problems, for example.

On the negative side, it has spread misery, like colonialism and economic slavery, and led to serious misuses of natural resources that are having dangerous effects on the climate. This is the primary challenge that must be addressed now.

The next challenge is that of growing inequality, both within countries and among them.

This outcome follows on ideological developments from the latter part of the last century: give finance capital a free hand, with productive capital stuck in the back seat. Finance capital, he charged, enables people to get rich without creating value, but now the current crisis has brought this game to a halt.

How, he asked, can we continue to improve the quality of life without continuing to deplete our natural resources in ways that threaten human life? Up to 1.5 billion people lack access to clean water and adequate living space. Many who lack decent work are driven into extreme dependence.

An audience member raised the issue of favoritism and corruption in the misuse of aid money. While Abugre agreed with the concern, he said that developing countries are changing. The answer, he said, lies is better education and greater opportunities for people.

He was then asked about genetically modified crops for Africa. He is wary of them for various reasons. They give major international corporations too much power, and Africa lacks the research capacity to evaluate and monitor these crops.

When told that genetically modified cotton has apparently been very successful, he replied that cotton requires a lot of water, a scarce resource in Africa. As well, cotton adversely affects the soil’s chemical composition. In fact, he said Africa’s cotton production is down.

Gauri Sreenivasan spoke about the decline of a unipolar world where the United States calls the shots. Other countries—like China, India, Brazil, and South Africa—are flexing their muscles.

They have put the brakes on free trade arrangements in Latin America. Also, the Bank of the South and the Asian Monetary Fund have surfaced as alternatives to the World Bank and the International Monetary Fund.

In 1995, the G7 met in Halifax to address the destructive effects of international financial institutions’ debt and adjustment policies. A bold plan, she said, was put in place to address Africa’s problems.

Civil society organizations have documented the failure of neo-liberal structural adjustment and debt policies to deliver on their promises of economic prosperity and social justice for the South. Now, these same policies are failing for the North as well, as seen in the current Greek crisis.

She feels that this North-South differentiation has lost some of its relevance: “Major multinational companies from all corners of the world—whether India’s Tata automotives, Brazil’s JBS SA beef packing conglomerate, Canada’s Barrick Gold, or U.S.’s Microsoft—seek similar policy environments that favor their needs.

These companies, with global supply chains and global outlooks, have shared interests in market access, easy finance, low taxes, mobility across borders, and armed protection, with a shared aversion to transparency in bookkeeping, or robust labor and environmental standards.”

Civil society organizations are playing a role in fighting this transnational corporate power, though they are vulnerable to attack and left to struggle against forces supporting other agendas.

Yet, there have been successes: the anti-land mine campaign and the challenging of trade liberalization in Argentina, South Africa, and India.

Referring to the subsequent G8 meeting, Sreenivasan addressed Canada’s commitment to maternal and child health in light of its decision to cut international development expenditures from its current low level and shift aid away from Africa: “We do not want to see a mother survive childbirth only to watch her child denied an education, excluded from opportunities because of her gender, or fall victim to diseases borne from unsafe drinking water or poor sanitation.”

The Millennium Development Goals are interdependent, so focusing on two while cutting back on others is counterproductive, she said.

She also criticized Canada for having “a low level of ambition” on climate change policy, and making excessive demands on less-developed nations to match the commitments of more industrialized countries, which are the most responsible for pollution.

One of the important elements for promoting development, said Sreenivasan, is democratic governance, and she finds it to be under threat here in Canada. She cites the emasculation of the International Centre for Human Rights and Democratic Development, denial of women’s organizations to use government funds for advocacy, and the ending of funding for immigrant and refugee organizations like Kairos that take positions on the Israel-Palestine situation the government does not like.

Some of the Kairos handouts at the meeting show why the Harper government is unhappy.

One deals with Ahava beauty products, produced by an Israeli company operating in the West Bank.

Importation of Ahava products is covered by a free trade agreement with Israel, but Kairos says that agreement legitimizes Israeli control over land that is not part of Israel.

As a result, Kairos asks people not to buy Ahava products.

As well, Sreenivasan said the government has lopped the heads off oversight agencies: the Nuclear Safety Commission, Military Complaints Commission, and the Office of the Public Complaints against the RCMP.

University of Ottawa Professor Melissa Marschke served as respondent to the presentations.

She said the exploitation of the oil sands demonstrates that we are overusing natural resources—extracting more and more for less and less benefit. She called the 1990s an era of cooperation, when Canada actually took leadership.

During the session, considerable attention was paid to the so-called Robin Hood Tax, a proposed .05% tax on financial transactions, such as the buying and selling of securities and currencies.

Such a tax could raise billions of dollars and at the same time curb dangerous short-term speculation, which is one cause of economic distress.

The hope is that revenue from the tax would be used for Millennium Development Goals, both at home and abroad. . Great Britain already has such a tax, which shows that the idea is not unrealistic.

Unfortunately, according to Abugre, the tendency in taxation is toward consumption taxes, while income from investment receives reduced tax rates. Thus, in developing countries, tax concessions attract foreign investors to develop resources, which means the poor subsidize the rich.

During the discussion of clean energy, it became clear that the answers at this time are elusive.

Clean energy is still in its infancy, and dirty energy threatens the planet through global warming. Some see an answer in nuclear energy, but the dangers are all too apparent. One need only mention Chernobyl and the military development of what was to be the peaceful use of nuclear energy in India.

A final word about the Robin Hood Tax; Finance Minister Jim Flaherty has said that his government would never issue new taxes. On this specific tax, he said that it is not needed in Canada because our economy has shown that it handled the economic crisis quite well and because our banking system is solid.

However, the meltdown in the United States created serious problems here, and the current Greek financial crisis is causing waves all over, even here.

We are really all in the same boat. As one woman at the session remarked, “Flaherty will get you nowhere.”

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