Though Vitoria-Gasteiz, capital of the Basque Country, was elected the European Green Capital of 2012 – an award presented by the European Union to promote and reward efforts to mitigate climate change – Spain still has a long way to go to earn the label of ‘sustainable’ for others cities around the country.

The air that the citizens of Vitoria-Gasteiz breathe is of the highest quality, according to the score given by the European Union, thanks to campaigns to increase bicycle use around the city and the promotion of a new bus network together with tram routes and new parking regulations.

In contrast, cities such as Madrid, Barcelona, Sevilla or Bilbao have been consistently exceeding standard levels of pollution as a result of a lack of environmental planning and a long drought.

“The necessary ingredients of a sustainable city are social inclusion and environmental quality in a dense, compact and diverse area with (democratic) participation in decision making,” Luís Jiménez, director of the Observatory on Sustainability in Spain (OSE), told IPS.

“In the developed world, cities determine to a great extent (a country’s) consumption pattern of materials and energy as well as territory. (Urban areas) contribute 75 percent of the planet’s pollution and use 70 percent of energy consumed by mankind,” he added.

As economic, cultural and social centres, cities provoke critical internal and external environmental impacts that cause serious ripple effects for other – mostly rural – systems, which, in Spain, comprise 90 percent of the land.

Ignacio Santos, an environmental expert currently working as a technical assistant for the Spanish Agency for International Development Cooperation (AECID), points out two key factors in measuring environmental advances or degeneration in Spanish cities: firstly, residents’ quality of life (which is tied to the quality of the urban environment) and secondly, an ‘ecological footprint’.

In terms of air quality, it is worth noting that approximately 87 percent of the Spanish population breathes ‘polluted air’, as defined by the World Health Organization.

This has resulted in 16,000 premature deaths annuallyand led to the proliferation of various respiratory diseases.

“In Spain, the process of industrialisation and urbanisation has degraded quality, particularly in urban centers. It is crucial to reinforce the public’s capacity for action against atmospheric pollution and to take decisive action to reduce greenhouse gas emissions, with integrated health, environmental and climate change policies,” Jiménez stressed.

According to Luis González, a member of Ecologistas en Acción, the main reason behind air quality degeneration in the cities is increased traffic, which directly emits particles in suspension from precursors (carbon monoxide, nitrogen oxides or methane) that make up tropospheric ozone.

Sadly, “Local authorities have just denied the problem or moved the measure stations. There are no programs aimed at reducing traffic and insufficient awareness of the use of different means of transport, such as the bicycle,” González told IPS.

The ‘ecological footprint’, a reliable methodology designed to measure human impact on the planet, essentially maps humans’ demand for natural resources and contrasts it against the Earth’s ecological capacity to regenerate those resources. According to the Ecological Footprint Atlas (2010), a publication from the Global Footprint Network, Spain has the 19th largest eco-footprint per person in a list of 153 countries.

Spain’s ecological footprint has grown by an annual average of 0.1 global hectares per person since 1995, according to the report Global Change Spain 2020/2050. By 2005 there had been an increase of 19 percent, which meant that the necessary ecological territory to produce resources and assimilate the residue produced by each Spanish person in 2005 was 6.4 global hectares per person.

“Therefore we are living beyond our means. If we want cities with quality of life and minimum impact, we have to ensure that our ecological footprint does not exceed our available biocapacity. Technological measures to improve efficiency in the use and production of resources are not enough to achieve that. The main challenge is to achieve a great change in current consumption habits,” Jiménez concluded.

Some experts believe it is necessary to rethink ‘urban metabolism’ as a means of reducing a country’s ecological footprint and improving air quality as well as other environmental aspects.

In the past few decades, territorial and urban planning based on unlimited and indiscriminate real- estate growth has been promoted.

This programme has been supported by a series of contradictory legislations: several regions’ urban regulations placed an upper limit on building densities, but in no case were these regulations enacted.

“It is important to have a clear idea of what kind of model of city we are talking about,” said Santos. “Sustainable cities are not those which are built with a lot of houses nor those full of big buildings and without green spaces,” he added.

“For example,” Santos told IPS, “Madrid’s metropolitan area is a model of a big city developed in an uncontrolled and dispersed way. New neighborhoods without an underground transport service are still being designed while there are a large number of empty houses in the city centre.”

An expansive city with a low building density and territorial dispersion in urban services needs more transport infrastructure, more energy consumption and takes up more land surface. All those factors affect the environment and increase greenhouse emissions, with a severe impact on air quality, climate change and acoustic pollution, among others – all of which affect the quality of life of citizens and other surrounding social and natural systems.

Also, a city without parks and green belts means a lack of trees to absorb pollution and reduce the impact of noise.

Dealing with all of these issues requires adapting the city to the limits of biocapacity, while aiming for sustainability.

“If we are in a relative situation of sustainability improvement, as a result of the economic crisis, this does not mean that a clear effort to change unsustainable growth (patterns) exists,” Jiménez stressed.

Current development trends in Spain are intrinsically incompatible with the planet on which we live, which has finite resources that are dwindling faster than at any other time in human history.

Stressing the urgency of the situation, Santos urged “not only need political will, but also scientific knowledge. To design and implement policies, it is necessary to have planners, decision makers and citizens with the carbon cycle constantly on their minds.”

(END)

By Raquel Martinez and - -
MADRID, Mar 1 2012 (IPS)

Though Vitoria-Gasteiz, capital of the Basque Country, was elected the European Green Capital of 2012 – an award presented by the European Union to promote and reward efforts to mitigate climate change – Spain still has a long way to go to earn the label of ‘sustainable’ for others cities around the country.

The air that the citizens of Vitoria-Gasteiz breathe is of the highest quality, according to the score given by the European Union, thanks to campaigns to increase bicycle use around the city and the promotion of a new bus network together with tram routes and new parking regulations.

In contrast, cities such as Madrid, Barcelona, Sevilla or Bilbao have been consistently exceeding standard levels of pollution as a result of a lack of environmental planning and a long drought.

“The necessary ingredients of a sustainable city are social inclusion and environmental quality in a dense, compact and diverse area with (democratic) participation in decision making,” Luís Jiménez, director of the Observatory on Sustainability in Spain (OSE), told IPS.

“In the developed world, cities determine to a great extent (a country’s) consumption pattern of materials and energy as well as territory. (Urban areas) contribute 75 percent of the planet’s pollution and use 70 percent of energy consumed by mankind,” he added.

Ignacio Santos, an environmental expert currently working as a technical assistant for the Spanish Agency for International Development Cooperation (AECID), points out two key factors in measuring environmental advances or degeneration in Spanish cities: firstly, residents’ quality of life (which is tied to the quality of the urban environment) and secondly, an ‘ecological footprint’.

In terms of air quality, it is worth noting that approximately 87 percent of the Spanish population breathes ‘polluted air’, as defined by the World Health Organization.

This has resulted in 16,000 premature deaths annually and led to the proliferation of various respiratory diseases.

“In Spain, the process of industrialisation and urbanisation has degraded quality, particularly in urban centers. It is crucial to reinforce the public’s capacity for action against atmospheric pollution and to take decisive action to reduce greenhouse gas emissions, with integrated health, environmental and climate change policies,” Jiménez stressed.

According to Luis González, a member of Ecologistas en Acción, the main reason behind air quality degeneration in the cities is increased traffic, which directly emits particles in suspension from precursors (carbon monoxide, nitrogen oxides or methane) that make up tropospheric ozone.

Sadly, “Local authorities have just denied the problem or moved the measure stations. There are no programs aimed at reducing traffic and insufficient awareness of the use of different means of transport, such as the bicycle,” González told IPS.

The ‘ecological footprint’, a reliable methodology designed to measure human impact on the planet, essentially maps humans’ demand for natural resources and contrasts it against the Earth’s ecological capacity to regenerate those resources. According to the Ecological Footprint Atlas (2010), a publication from the Global Footprint Network, Spain has the 19th largest eco-footprint per person in a list of 153 countries.

Spain’s ecological footprint has grown by an annual average of 0.1 global hectares per person since 1995, according to the report Global Change Spain 2020/2050. By 2005 there had been an increase of 19 percent, which meant that the necessary ecological territory to produce resources and assimilate the residue produced by each Spanish person in 2005 was 6.4 global hectares per person.

“Therefore we are living beyond our means. If we want cities with quality of life and minimum impact, we have to ensure that our ecological footprint does not exceed our available biocapacity. Technological measures to improve efficiency in the use and production of resources are not enough to achieve that. The main challenge is to achieve a great change in current consumption habits,” Jiménez concluded.

Some experts believe it is necessary to rethink ‘urban metabolism’ as a means of reducing a country’s ecological footprint and improving air quality as well as other environmental aspects.

In the past few decades, territorial and urban planning based on unlimited and indiscriminate real- estate growth has been promoted.

This programme has been supported by a series of contradictory legislations: several regions’ urban regulations placed an upper limit on building densities, but in no case were these regulations enacted.

“It is important to have a clear idea of what kind of model of city we are talking about,” said Santos. “Sustainable cities are not those which are built with a lot of houses nor those full of big buildings and without green spaces,” he added.

“For example,” Santos told IPS, “Madrid’s metropolitan area is a model of a big city developed in an uncontrolled and dispersed way. New neighborhoods without an underground transport service are still being designed while there are a large number of empty houses in the city centre.”

An expansive city with a low building density and territorial dispersion in urban services needs more transport infrastructure, more energy consumption and takes up more land surface. All those factors affect the environment and increase greenhouse emissions, with a severe impact on air quality, climate change and acoustic pollution, among others – all of which affect the quality of life of citizens and other surrounding social and natural systems.

Also, a city without parks and green belts means a lack of trees to absorb pollution and reduce the impact of noise.

Dealing with all of these issues requires adapting the city to the limits of biocapacity, while aiming for sustainability.

“If we are in a relative situation of sustainability improvement, as a result of the economic crisis, this does not mean that a clear effort to change unsustainable growth (patterns) exists,” Jiménez stressed.

Current development trends in Spain are intrinsically incompatible with the planet on which we live, which has finite resources that are dwindling faster than at any other time in human history.

Stressing the urgency of the situation, Santos urged “not only need political will, but also scientific knowledge. To design and implement policies, it is necessary to have planners, decision makers and citizens with the carbon cycle constantly on their minds.”

Excerpt:

Jesus Guerra at the microcredit summit with Soraya Rodríguez, Spain's secretary of state for international co-operation. Credit: Raquel Martinez/IPS

By Raquel Martinez and - -
VALLADOLID, Spain, Nov 18 2011 (IPS)

Jesús Guerra, a volunteer at this week’s Fifth Global Microcredit Summit in this Spanish town, was nonplussed by the expensive gold watch sported by a banker from a developing country.

“When I volunteered to help at the Summit I thought this was different,” Guerra told IPS. “I believed that everybody who worked in microfinance wanted to end social injustices, but here I am listening to a lot of people saying that the goal is to make profits.”

Another volunteer, Susana Balet, was impressed by the dedication of some people working in microcredit. She indicated to IPS a presentation made by Ingrid Munro where the focus stayed on the reality of poverty and the importance of alleviating it.

Munro, who founded in 1999 the Jamii Bora Group, a Nairobi-based microfinance organisation, firmly believes that any family, no matter how hopelessly poor, is capable of emerging out of poverty.

“Human development does not work without people listening to each other, especially those at the bottom of the pyramid,” said Pilar Vereda, in-charge of Institutional Relations of the Fundación Iberomericana de Desarrollo (the Iberoamerican Foundation of Development).

But such a dialogue between the providers and recipients of microcredit was missing even at the Nov. 14-17 Summit with the poor figuring largely in presentations and videos.

“The people at the bottom of the pyramid have not had their own voice at this Summit although the Spanish platform of non-government organisations had proposed better participation by cooperatives or other beneficiaries of microfinance,” Vereda said.

“Finally, their voices were represented through the videos that we produced and broadcast at the Summit,” she said.

Muhammad Yunus, founder of Bangladesh’s Grameen Bank, told IPS that a small group of borrowers is participating in the Summit and has even managed to participate in different events.

“At this big Summit there was only a small group of borrowers because we want to be sure that they are comfortable and for them to avoid this big crowd of people from around the world,” Yunus explained. “But at the annual regional summits there are usually meetings between borrowers and other participants,” he added.

“We have to believe in the potential of people. To be confident that each person knows what microcredit is about. Each person is as capable as anybody in the world because creativity exists in all of us,” Yunus claimed when he inaugurated the Summit.

The truth is that the main goal of the participating experts and institutions was how to get more clients and make more money, and this does not always coincide with the idea of making microfinance a tool to fight poverty.

For example, U-IMCEC, a Senegal-based cooperative represented at the Summit, aims to contribute to improving incomes and the well-being of families and micro entrepreneurs.

Working with 72,000 members, U-IMCEC works by providing access to financial services and creating income-generating activities, especially for the women, poor and vulnerable.

“My institution works in the rural areas surrounding the cities, where the neediest live. We have improved their lives with programmes which allow people to receive remittances from abroad without moving to big cities, where the financial institutions are,” Diao El Hadji Moussa, U-IMCEC deputy director, told IPS.

“It also has a positive effect on the family and micro business because they reduce costs,” he told IPS.

Last year, banks showed great interest in the potential of microcredit, as indicated by numerous Summit participants.

“When corporate banks begin to work in microfinance they have to learn and specialise,” said Alejandro Soriano, senior executive at Banco de Desarrollo de América Latina (CAF).

“They need to understand that this (specialisation) is essential to guarantee sustainability and that microfinance has a high social impact,” Soriano told IPS.

“There are too many examples of banks working with inadequate methodology. When they stop being profitable they drop countries and communities and this causes huge damage to the borrowers, because they do not have any more access to credit,” Soriano added.

CAF is a development bank that promotes a model of sustainable development through credit operations, grants and technical support and offers financial structuring to public and private sector projects in Latin America.

“Sometimes big banks learn from developing countries’ experiences,” said Estela Cañas, researcher at the Central American University.

“This was the case of the Santander bank in El Salvador which invested half a million dollars to learn and spread this knowledge. It was a positive practice,” Cañas told IPS.

At the Summit, there were innovative organisations dedicated to development through self-sustainability: connecting socially responsible individuals with people from emerging countries in need of microcredit.

Angel Aranda, managing director of Amifi, told IPS how peer-to-peer lending works. “Individuals can make social investments from 20 dollars. By partnering with microfinance institutions we establish the connections with the borrowers in emerging countries.

“Social investors can choose a project from our website where the project information is available and they can follow the process of selected micro businesses in emerging countries over time.”

Despite such good practices on the one hand and the problems faced by microfinance institutions on the other, the Summit was still about maintaining a system that maximises profits for some.

Excerpt:

Microcredit can help a woman to have an income. It can, for better or worse, also transform gender equations in the public and private spheres.

Microcredit pioneer Muhammad Yunus at Valladolid. Credit: Raquel Martines/IPS

Making microfinance more meaningful for women in terms of real empowerment occupies much of the deliberations at the Fifth Global Microcredit Summit underway in this Spanish city.

Apparently, not all microcredit institutions (MFIs) are aware of the importance of contributing to a more integral and transforming vision that impacts women’s rights and human development.

Linda Mayoux, international consultant to Hivos and Oxfam Novib’s WEMAN Programme, classifies MFIs into three kinds: those that are minimalist, those that alleviate poverty and those that also provide empowerment avenues.

The first ones works on high rotation, high interest rates and high profitability; the second focuses on the impact that microcredit can have on the reduction of family poverty by providing loans to women.

“But to talk about a woman’s empowerment it is not enough for her to have better access to income and a better life for her family,” Patricia Padilla, manager of Asociación Alternativa para el Desarrollo Integral de las Mujeres (ADIM), told IPS.

It is important to have MFIs that also look at empowerment, the third on Mayoux’s list, Padilla said. With this philosophy, ADIM carries out development business services with gender approach and management of knowledge in Nicaragua.

“To achieve the goal of ending extreme poverty in women, who represent 80 percent of those at the bottom of the pyramid, it is necessary to have educational and training interventions, but other kinds of actions are needed to empower them,” Padilla said.

“After giving the loans, our institution offers training to the borrowers to increase their entrepreneurial and personal identity, their economic and life independence, their use of tools to increase their training skills in basic accounting principles as well as marketing and autonomy,” Padilla said.

“Autonomy leads to self-recognition, and from this point each woman can move towards personal realisation,” she added.

In the household sphere, they also receive the capacity to negotiate, to share incomes with their husbands. “In Nicaragua, women spend most of their incomes on home and children rather than investments on their own projects,” Padilla said.

Negotiation of income is not the only thing needed in the household. “The sexual division of labour in Nicaragua is such that husbands prevent their spouses from going to far away markets because of jealousy, and this affects women’s independence and sexual freedom,” she said.

In Honduras, the cooperative Comixmuld, shows the positive impact in the household that a larger development approach can have on women.

Comixmuld, a credit and savings institution born in the Siquateque market, has 25 years of experience behind it and a current enrolment of 23,000 women members.

“These women are living under the poverty threshold of less than 1.25 dollars per day and 52 percent of them are heads of the family. They are the owners of the cooperatives and they decide what they need most,” Olivia Castellanos, president of Honduran cooperative, pointed out.

To carry out their own projects, members requested time and their petitions were heard by the Fundación Iberoamericana para el Desarrollo, a Spanish NGO. Pilar Vereda, CEO of the foundation, supported the Honduran women in their initiatives to share household work and save time.

“Although, at the beginning, the idea was to focus on the exchanges in the scope of housework, the members of the cooperative decided to start exchanging their products,” Vereda told IPS.

“And now the members of cooperative not only share childcare but also exchange products and crafts of each woman to sell in different markets, and they work on a rotatory system to go to fairs,” Magda López, manager of Comixmuld, said.

“This coordination and exchange results in a wider variety of products offered on the women’s market stands and in a higher income, but especially permits women to have more time as they themselves demanded,” López concluded.

As Isabel Cruz, president of Foro Latinoamericano y del Caribe de Finanzas Rurales (FOROLACFR), indicated, “To achieve rights is not as easy as the access to credit, but one should be able to find a way in which microcredit and rights can progress at the same time.”

“Microcredit has created opportunities for women, but it has also generated effects not as positive in family and social life. It is necessary to go further with more policies in the education, psychology and sociology fields,” Cruz told IPS.

“In Mexico, for example, violence has increased,” Cruz said. “Credit can be a double-edged sword if the context is not kept in mind. Specific gender policy measures need to be in place.”

By Raquel Martinez and - -
VALLADOLID, Spain, Nov 14 2011 (IPS)

While microcredit remains the best tool available to address poverty it is no magic wand and can only be a part of the larger development process, say experts gathered in this historic Spanish city.

Stalls await business at the Valladolid microcredit summit. Credit: Raquel Martinez/IPS

José Antonio Alonso, professor of applied economics at the Complutense University of Madrid, thinks that microcredit suffers from overblown expectations when the reality is that some goals are achievable and others are myths.

Alonso counts among the myths the idea that anyone can become a businessman. “Entrepreneurial skills are necessary to run a successful microenterprise and not all potential customers are equally able to take on debt”, he told IPS.

The professor said microfinance institutions continue to be an important tool to reduce the poverty, but they have to be integrated into a larger view of development.

According to Alonso, the most important achievement of microcredit is reduction in vulnerability as the World Bank report, ‘Voices of the Poor – From Many Lands’, shows.

Todd Bernhardt, director of marketing and communications at the Washington-based Grameen Foundation, said that microcredit institutions alone are not the answer to poverty. “It is also necessary to have a broader view of development and include factors such as knowledge, savings, healthcare and a good framework of regulation.”

The Grameen Foundation helps replicate Bangladesh’s Grameen Bank microfinance model around the world through a global network of partners.

Bernhardt said the Grameen Bank model is sustainable because “the savings of members flow and can be reused by other borrower-owners.” The model also concentrates on income generating activities rather than consumer spending.

“The impact of microfinance in MDG (Millennium Development Goals) is more associated with reduction of poverty, not only because of better incomes but also because of capacity building,” Bernhardt told IPS.

Currently, 1.4 billion people live on less than 1.25 dollars per day, while more than three billion live on less than 2.50 dollars per day. The U.N.’s first MDG focuses on cutting extreme poverty and hunger to half by 2015.

“In addition, there is a huge effect on the other MDGs,” Bernhardt said. “When credit is given to a woman it increases her self-confidence as also levels of education and health for herself and her family. In other words, microfinance has a ripple effect on the MDGs,” he told IPS.

India, according to Bernhardt, presented a case where there were no conducive polices. “Microfinance institutions in India are prohibited from offering savings accounts to borrowers, who are forced to borrow money from commercial banks or sources.

“This is sometimes reflected in higher interest rates charged to borrowers, as compared to institutions like Grameen Bank, which leverages funds from savings and passes them on to borrowers,” Bernhardt said.

Even so, according to a report released by the Microcredit Summit Campaign (MSC) – a programme of the United States-based advocacy group RESULTS Educational Fund – nearly 9 million Indian households involved in microfinance rose above the 1.25 dollars-a-day poverty threshold between 1990 and 2010.

This is good news coming as it does at a time of difficulties for the sector in India and elsewhere.

The microfinance community attending the summit is taking promotional steps such as introducing the ‘Seal of Excellence’ to recognise microfinance institutions with significant outreach to poor and excluded households.

The MSC aims to reach 175 million of the world’s poorest families by 2015 and ensure that 100 million of those families move above the World Bank’s 1.25 dollars-a-day poverty threshold.

According a recent, unpublished report from the Consultative Group to Assist the Poor, called ‘Latest Findings from Randomised Evaluations of Microfinances,’ the microfinance industry needs to continue to mature in ways that allow it to view poor customers as individuals.

“Some of those individuals will leverage financial services to smooth consumption; some to manage risk; some to make investments where they have the skill and resources to profit from; some will do all of the above,” the report concludes.

It was shown at the summit that when the ability of microfinance institutions to deliver education and health services to the poorest are combined with savings, loans and insurance, they become powerful tools in the fight against global poverty.

The best yardstick of microcredit’s success is its own steadily growing popularity.

Some 137.5 million families received a microloan in 2010, according to the ‘State of the Microcredit Summit Campaign’ report. That supposes an 18-fold increase since the original microcredit summit was held in 1997 when only 7.6 million very poor families had taken a microloan.

Excerpt:

By Raquel Martinez
MADRID, Oct 12 2011 (IPS)

As global working-class outrage against corporate capitalism explodes in organised protests around the world, scores of citizens in Spain are demanding an end to tax breaks for the wealthy.

At a time when austerity measures have slashed public spending on essential services such as healthcare and education, thousands of people in over 166 cities across Spain, loosely organised around the 15-M movement, have been calling for higher corporate taxes, so the wealthy can “share the cost of the crisis.”

Disgruntled citizens also called for a referendum to decide on the advisability of constitutional reforms that established a cap on Spain’s public debt, which currently stands at 702 billion euros at an annual cost of 25 billion million euros, according to the Bank of Spain.

Despite these demands, the reforms were negotiated without a referendum.

The bulk of the country’s tax burden falls on the shoulders of middle- and working-class people.

Francisco de la Torre Díaz, spokesperson for IHE, told IPS, “The economic crisis has (exacerbated) tax disparities in two ways: firstly, through the increase in indirect taxes (like the Value Added Tax, or VAT) to 18 percent, which is regressive by nature; but mainly because of the significant decrease in corporate taxes.”

Last month, in what many believe to be a token gesture, the patrimony tax, or property sales tax, which was abolished by the government in 2008, was reinstated for the next two years to alleviate tax pressure on average wage earners.

But the added weight of this tax on the total taken in by the Agencia Tributaria (AEAT), an office similar to the Inland Revenue Department, is negligible – less than 0. 5 percent, according to IHE.

“Most (of the big) ‘Forbes magazine’ Spanish players are barely affected by this tax, since a large amount of their patrimony is not tributary,” Torre Díaz said.

“The taxes extracted from the highest incomes earners, a large percentage of which are companies, have been steadily decreasing over the years,” he added.

“Between 2007 and 2010, corporate tax collection had dropped by 64 percent, meaning the state went from receiving nearly 45 billion euros to less than 16 billion euros,” he added.

This represents a significant loss of revenue to the government, funds that could be utilised to subsidise the public programmes currently on the chopping block.

In addition, the Observatorio de Responsabilidad Social Corporativa (Spain’s observatory on corporate social responsibility) estimates that a full 80 percent of the companies on IBEX 35, the stock market index of Spain’s principle stock exchange, have money in tax havens.

Susana Ruiz, policy advisor for Innovative Financing and Private Sector Campaigns at Intermón Oxfam, pointed out the dangers of promoting investment abroad by Spanish companies, while simultaneously maintaining lax standards for taxing them at home.

“Stronger accountability measures should be put in place to avoid tax evasion by these big companies,” she told IPS.

“Their opaque structures not only allow the diversion of profits on which taxes should be paid domestically, but also encourage money transfers to tax havens, which enables corporations to dodge tax payments in developing countries where they are carrying out their main productive or extractive activity,” Ruiz added.

A further cause for alarm is the lack of political will among the Group of 20 (G20) – representing some of the most economically and politically influential industrialised and developing nations – to bring an end to these fraudulent practices, which have dire ripple effects like massive drugs and arms trafficking.

The ‘country by country reporting requirement’, that demands that multinationals present detailed accounts for each and every country of operation, have not even been included in the G20 agenda for the next meeting slated to be held in France, Ruiz said.

Aside from multilateral efforts, the Spanish government itself has considerable leeway to restock its state coffers, according to economist and development expert Manuel de la Iglesia-Caruncho,

He told IPS that according to the most recent figures released by Eurostat, the statistical office of the European Union, the average income of 27 EU countries was 35.8 percent of GDP in 2009, while in Spain it was just 30.4 percent.

Iglesia-Caruncho stressed the necessity for the wealthiest corporations to correct the country’s many deficits by paying higher taxes. Fair tax payments by corporations would lead to a reduction in the fiscal deficit, an end to runaway speculation in financial markets and an immediate improvement in public services, he said.

“But only,” he cautioned, “on the condition that these additional resources are used efficiently in employment- and knowledge-generating activities such as investment in productive and social infrastructure, health, education, research and development (R&D) or the environment.”

Iglesia-Caruncho also challenged the dominant argument against tax increases – based on the notion that withdrawing resources from the private sector would deprive economic operators of incentives, thereby leading to an overall reduction in consumption – by pointing to the example of many Scandinavian countries that collect high taxes and still enjoy high growth and consumption.

These states, he added, are protected from market shocks and failures by properly redistributing social wealth.

Corporate adherence to fair tax standards will not necessarily lead to a contraction in economic activity, since “aggregate demand is maintained by increasing public expenditure and encouraging economic operators to continue investing,” the expert said.

The Spanish Parliament has currently been dissolved prior to the Nov. 20 general election. However, despite the period of relative government inactivity many believe that, at the very least, the crisis has sparked a lively public debate that has put the necessity of a fairer and more just tax system back on the table.

Excerpt: