I just returned from Geneva and the UN Summit on poverty, unemployment and social exclusion, the 5-year update on the World Summit on Social Development (WSSD) held in Copenhagen in 1995 and headed again, by its Secretary General, Juan Somavia of Chile. No country has met the targets pledged in the Copenhagen Action Plan. UN Secretary General Kofi Annan released a joint report “A Better World for All: Progress Toward Development Goals“ prepared by the UN, the World Bank, the IMF and the OECD, which was seen by many as “glossing over” the fundamental problems. This was seen as due to the inability to acknowledge that the entire paradigm of “Washington Consensus” policies had continued to exacerbate, rather than ameliorate these problems of poverty, unemployment and social exclusion.
Thus, there was much soul-searching among delegations and the thousands of NGO leaders in attendance. Many identified this “paradigm problem,” including Ambassador Somavia, also the new Director – General of the International Labor Organization (ILO), and former Prime Minister of the Netherlands Professor Ruud Lubbers. Mr. Somavia cautioned that we must distinguish between the almost unstoppable advances of technology (which can be steered) and the deliberate policies of governments to de-regulate, privatize and further globalize markets – which can be changed. Mr. Lubbers emphasized that markets themselves can be made to function more ethically, and cited the numerous voluntary Codes of Conduct that global corporations now espouse, ethical and “green” investing as means, together with active civil society pressure.
There was much focus on infectious diseases, AIDS in African countries, lack of health care and education, and the continued oppression of women as key issues – now underlined at the recent conference in Durban, South Africa. Other issues included corruption, bad governance, kleptocracy, the incursions by multi-national corporations and loss of sovereignty due to them and international financial markets. The global ecological crisis was also much discussed, since it is now manifesting in most countries as loss of croplands, forests, water and widening pollution.
Many NGOs thought that the UN, UNCTAD, UNESCO, ILO, WHO and other agencies were most democratic for addressing these problems. Many think that the WTO, the World Bank and IMF should be abolished or brought back under the UN as originally envisioned. Many quoted the Joseph Stiglitz article “What I learned at the world economic crisis,” The New Republic, April 2000, with which I also agree. Meanwhile, global standard-setting on labor, human rights, environment should continue. (See my article on UN Standards, Tomorrow, Stockholm, June 1998). Most in the NGO community and the official delegations called for the limiting of the IMF’s mandate and democratizing of its governance. Many called for abolishing structural adjustments programs and loans or reducing their unfair impact on social programs, the poor, women and children. The World Bank was targeted for its elitist structure, and like the IMF, its domination by the USA. Most delegations supported the 1995 Action Plan rather than weakening its pledges to eradicate poverty or to extend the original time horizons. The USA’s delegation, headed by the Secretary of Health and Human Services Donna Shalala, was in agreement, but was also out of step with most other delegations in its unwillingness to criticize the paradigm of the “Washington Consensus.”
The Final Report of Geneva 2000 is available on the web at www.un.org/socialsummit.
Unsurprisingly, the NGO conference (very well organized, with hundreds of sessions and seminars at the ILO, the International Telecommunications Union, the World Intellectual Property Organization, the World Health Organization, even the World Trade Organization) debated all the “outside the box”, new paradigm approaches: empowering women (who comprise most of the poor); more resources for grassroots healthcare, education, micro-credit, democracy, human rights and local, people-centered approaches to development. The most popular policy proposals were those on funding these approaches with various taxes (to be collected by national governments) on currency exchange and netting transactions, e.g., the “Tobin tax” (now suggested at . 1% or less) and variations. Such taxes were first proposed in the 1970s by US Nobelist James Tobin and by US Treasury Secretary Lawrence Summers, in a paper published in 1989 (see my Beyond Globalization 1999). I helped introduce such tax concepts at the Copenhagen summit in 1995 (see my The UN: Policy and Financing Alternatives, Report of the Global Commission to Fund the UN (1995, 1996)) and in subsequent articles in FUTURES, Elsevier UK in 1996 and 1998. In Copenhagen, the IMF and the World Bank, the US delegation and other “Washington Consensus” advocates declared that such a tax was “unfeasible, un-collectable, would dry up liquidity, or drive currency traders to tax havens.” Other such taxes were also proposed by the Global Commission and many other NGOs, on arms trading, pollution, carbon emissions, airline tickets, shipping and for “parking spaces” for satellites using geostationary orbits.
Five years later, at Geneva 2000, the debate had advanced considerably. Many credible studies have now shown that a currency exchange tax, whether directly on transactions (collected by central banks) or on netting and settlement (through the SWIFT system) is feasible, even easy, using simple software. Furthermore, the recent crack-down on tax-havens by the G-8, the OECD, US Treasury Secretary Lawrence Summers and the UK’s Tony Blair have undercut the main argument of those opposed. Because money laundering, capital flight and tax-evasion have burgeoned into trillion-dollar problems, the new crack-down was urgent and tax-havens are now “black-listed.” All international banks and financial intermediaries will be required to install new tracking software – or be cut out of such vital settlement systems as SWIFT. This means that additional software to collect a currency exchange tax would be a simple add-on.
Thus, NGOs at several seminars I attended in Geneva were more focused on lobbying their delegations to support a currency exchange tax now that Canada has passed a Parliamentary directive, over 100 UK members of Parliament, the Finnish government and others are supporting such a tax. Only the USA and Australian delegations were in opposition (I lobbied the USA delegation to change its position at least to neutral – reminding them of Lawrence Summer’s paper in 1989). The question now is not whether there will be a currency exchange tax, but when and how the many billions of dollars it would collect would be disbursed. Another task is to educate US Senator Jesse Helms and his staff to understand that such currency exchange fees would be collected by nations, and their central banks and are not “UN taxes” or “international taxes” – but would be used for domestic purposes and to stem capital flight.
I argued at a Seminar led by ILO Director-General Juan Somavia, that a currency exchange tax is a “win-win” for all players, even traders and others in financial markets and for corporations. The instabilities of the current “global casino” (also pointed out by George Soros) require regulation and a new global financial architecture.
Currency turbulence, “bear raids” to drive down currencies, speculative attacks, etc. not only blind-side even the most democratic governments, they force up interest rates, destroy savings and small business, create bankruptcies and unemployment and severely impact the poor, women and children as social safety-nets are cut. Hedging against currency risks by market players and corporations is now creating its own systemic stresses in ballooning derivatives (some $20-30 trillion outstanding). Thus a currency exchange tax is a “paradigm-shifting” intervention – slowing down this flywheel of social, economic, cultural and ecological destruction – which is at the core of today’s market-driven economic and technological globalization.
Three other major intervention points which I advocate work on and investment in are:
1. solar and renewable energy (including fuel cells, hydrogen, photovoltaics, tidal, wind and biomass);
2. electronic barter-trader systems to create alternative pure-information-based, money-free trading of commodities South-South. As a consultant to the South Commission in 1989, I would ask then Finance Ministers “What makes you think you need to earn foreign exchange?” Even then (before the Internet) they could have set up an intranet of computer work stations to trade petroleum, tin, tractors, generators, and many other commodities – without a reference currency – just using the computerized audit trails as settlement systems (See my Building a Win-Win World, Ch. 9, 1996). Today, there are companies (including Barter.com Inc., in which I am an investor) which can offer such services, for example, to OPEC, as an alternative way to trade its petroleum directly with other developing countries, particularly China, India, Brazil, Venezuela, etc..
3. Global Mass Media, such as Canada’s WETV (already with 38 partner stations in 31 countries, in which I am an investor). Today, we live in “mediocracies” and even political leaders must bow to private, commercial global media giants. The world should have many competing, public-access TV channels for cultural diversity, to share political and social debates on solutions and to connect NGOs, grassroots and indigenous countries world-wide around progressive problem-solving. So far, WETV is the only one prototype – a gift from the people of Canada, and now from the Nordic countries, Netherlands, Switzerland and other countries. I have developed some new program series for WETV to act as “watchdogs” and to give both carrots and sticks to corporations, governments and civic society: “The Ethical Marketplace,” “The State of the Future” a think tank network of over 500 futurists globally, and “Poll to Poll”, a global polling series in 60 countries on priority issues of “We the Peoples.” WETV is currently at the Hannover “Expo 2000” in Germany, with its own pavilion, broadcasting to 60 countries.
Quality-of-Life Indicators — such as the Calvert-Henderson Quality of Life Indicators I co-created with the Calvert Group, Inc. of socially responsible mutual funds (available from www.amazon.com) — are needed to assess true “wealth” and “progress” beyond the money-indicators of GNP, which are grossly distorted and continue steering countries in the wrong direction and reinforce the Washington Consensus myopia. I also spoke at a UN-EU seminar on “Social Indicators for Development” for statisticians comparing standards for new indicators. Participants were interested in these new Indicators because they show a balanced view of the USA to sober the usual Wall Street “hype.”
The outcome of GENEVA 2000 reaffirmed member states’ commitment to the earlier Copenhagen Action Plan. This in itself was an achievement which enshrines this Action Plan as a basic framework for social development. However, the focus shifted toward enabling people, communities and civil society and empowering the poor to resist exploitation and meet their own goals for self-development. Reducing inequality – including the growing “digital divide” and the reduction of debt and excessive debt-servicing were also prioritized. Copenhagen 1995 initiated a new paradigm in human development: governments have become committed and accountable for social, not just economic development.