- Development & Aid
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Tuesday, September 27, 2022
DOHA, Dec 1 2008 (IPS) - For the past three decades, indebted developing countries have been forced by the International Monetary Fund (IMF) and the World Bank to deregulate financial and labour markets, privatise national industries, abolish subsidies, and reduce social and economic spending.
Now – during the worst financial crisis since the 1930s – northern governments that control these multilateral financial institutions have launched a massive and unprecedented programme of government intervention, nationalising banks, injecting massive subsidies into ailing institutions and re-regulating their financial sectors.
"This double standard is unacceptable," asserts Roberto Bissio of the international Social Watch coalition. "The financial system, its architecture and its institutions must be completely rethought."
Only an approach based on human rights can overcome the current crisis, argues Social Watch in its 2008 report, ‘Rights is the Answer’, launched Monday at the International Conference on Financing for Development in Doha, Qatar.
"Human rights must be the starting point," the document states, "and not some distant goal in the future, and a rights-based approach to development [with gender equality, decent work and human rights at its core] must be the main guiding principle."
Social Watch, an international NGO watchdog network monitoring government compliance with international commitments, has published this annual report since 1996.
The national reports show how the pervasiveness of extreme poverty and gender inequity is intimately linked to the immediate effects of the current triple crisis and to longer-term painful economic adjustments ingrained in the global financial architecture.
Social Watch documents the widespread, haphazard implementation of policies promoting economic liberalisation and deregulation. They found that these policies have provoked the curtailment of people’s economic and social rights around the globe, that liberalisation and deregulation now curtail the ability of many developing countries to comply with their international commitments to end poverty and achieve gender equality.
The growing income inequalities both within and between countries spurred by capital flight, tax evasion, and privatisation have slowed down the progress on key social indicators. According to the Social Watch calculations, meeting the eight Millennium Goals is virtually impossible if world governments maintain a "business as usual" attitude.
In the first thematic report of the 2008 Social Watch document, Nicholas Shaxson and John Christensen of the Tax Justice Network demonstrate how weak tax reporting policies allow for illicit financial flows. They cite from a University of Massachusetts study that estimates capital flight from 40 African countries over a 35-year period amounted to 420 billion dollars (2004 dollars). Compare this with their total external debt, which amounted to 227 million dollars in 2004.
According to Shaxson and Christensen, "We can no longer focus so strongly on aid, without bringing tax into the core of the debate. Tax is the most accountable, and sustainable source of financing for development."
In another thematic report, Mirjam van Reisen and Simon Stocker of Eurostep document how the promises made by the European Commission (EC) to focus its development aid strategies on promoting poverty eradication have not been fulfilled, due in large part to Europe’s overriding interest in liberalising trade flows.
EC aid to developing countries is now largely channelled towards improving infrastructure and facilitating trade, instead of contributing towards the realisation of basic social rights such as access to health care and education.
Kinda Mohamadieh of the Arab NGO Network for Development provides a developing country view in her thematic report on social and economic rights in the Arab region. In recent years, Mohamadieh says, economic liberalisation has actually thwarted attempts to strengthen democracy in the region.
Social Watch calls for the convening by the U.N. of a comprehensive, inclusive process to review and reconstruct the international financial and monetary institutions – a demand that has become a bone of contention at the Doha talks here.
Only an international conference convened by the U.N. that includes developing countries and civil society can yield benefits for the majority of the world's people, according to Social Watch.
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