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Spring 2009 www.ccic.ca
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Economic and Financial Crisis

 
The Casino Economy
By Gerry Barr

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Gerry Barr
 

 

When the world’s “casino economy” collapses it’s the developing world that suffers most. Transparency, global regulation and including the voice and priorities of the poor are all part of the answer to the problems posed by global financial collapse according to four writers in this edition of e-Au Courant.

 

Susan George, President of the Trans National Institute, says G-20 attempts to respond to the global financial emergency have got it wrong. The G-20 spent hundreds of millions of dollars to deal a new hand for the International Monetary Fund while leaving the balance of a ruinous third world debt burden intact. Environmental crisis is looming and while melting arctic ice may mean a navigable North West Passage for Canada, George points out it spells environmental disaster and refugee crises elsewhere. New approaches to WTO rules are needed to encourage – not limit – the transfer of environmentally beneficial technologies. Civil Society advocates should be using this moment to promote financial tools like a “Tobin Tax” on financial transactions. As the global debate unfolds, George says, success for NGO voices lies in their ability to make alliances.

 

Fraser Reilly-King, of the Halifax Initiative, says North American and European Banks unleashed global economic collapse with over-leveraged lending to consumers in the developed world. More than 50 million people can now be added to the ranks of those living under $2 a day (ranks already swollen by almost 150 million because of last year’s food and fuel crisis). Reilly-King says Joseph Stiglitz got it right with his “Expert Commission” on reform of the global financial system.  Stiglitz strategies include: allocation (in the North) of a portion of stimulus spending (1%) for the hard-pressed South, a global reserve system that invests in the real economy in the Global South, and a “genuine” development trade round that promotes and doesn’t undercut developing countries interests. 

 

Peter Gillespie, of Inter Pares, describes how economies of the South are drained of resources as billions of dollars are illicitly transferred from the developing world to a network of northern tax havens. Tax evasion and theft of public resources in the developing world have undermined health services for millions and beggared key public programs. More than 70 national tax havens channel as much as half the money moving around the world today. Civil society advocates are looking for transparency, global regulation and new accounting standards.

 

Amelita King Desjardin says women are concentrated globally in labour-intensive export industries where cutbacks are felt first. Studies conducted during the Asian economic crisis in 1997 show that women’s job loss is the most likely immediate outcome of a recession. Poor families are hardest hit, but women’s unemployment affects the income and nutritional levels of most households.

 

The financial crisis has, rightly, plunged the world into reflection about the kind of economy we need. It’s time to stop betting with the livelihoods and lives of the world’s poor.

 

 

Gerry Barr
President-CEO

Canadian Council for International Co-operation

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