Latin American States at UN Focus On Financial Crisis, Suggest Transaction Tax

New York, Sep 22 2011 8:05PM
Blaming speculation for the high price of food and oil, and arrogance and
greed for the global economic crisis, the Dominican Republic called at the
United Nations today for new market rules and proposed a 5 per cent tax on
financial transactions to spur growth and prosperity.

With $4 trillion circulating every day untaxed around the world in financial
transactions, such a tax would bring in $4.8 trillion annually, Dominican
Republic President Leonel Fernández
<“http://gadebate.un.org/sites/default/files/gastatements/66/DO_en.pdf“>told
the General Assembly on the second day of its 66th annual General Debate.

“Mr. President, $4.8 trillion would not only solve problems related to some
countries’ sovereign debt but at the same time there would be enough fresh
resources for investing, which would allow a rapid recovery from the current
financial and economic world crisis,” he said.

If it was felt that this is not an appropriate way for States to collect
income, he noted that more than $10 trillion deposited in tax havens,
increasing by $600 billion each year, without a dime entering the tax
department of any Government, he added.

“In sum, we are forced to accept an increasingly alarming situation of
social injustice because of the indisputable and uncontrollable power held
by a circle of the world economic elite,” he declared, singling out
financial speculation in food and oil, which saw prices of soy, corn, rice
and wheat increase by between 107 and 136 per cent from 2006 to 2008, adding
150 million more people to those who go hungry around the world for a total
of over 1 billion.

Citing international analysts for figures showing that 30 to 40 per cent of
increases for commodities are attributable to financial speculation on
futures contracts, he called for limits on the volume of such insurance
companies, investment banks, pension funds, and equity funds that are in no
way involved in the physical handling of the product, along with an increase
in deposit guarantees to disincentive speculative transactions that only
contribute to price volatility.

The global financial crisis has been produced by “by a lack of clear rules
in the international financial system, by arrogance, by greed, and by an
uncontrolled eagerness for amassing wealth,” he said.

President Sebastián Piñera Echeñique of Chile
<“http://gadebate.un.org/66/chile“>noted the need for concerted action by
the UN and other global bodies to deal with financial and other crises in an
increasingly inter-connected world.

“For example, financial crisis, in addition to becoming more frequent, have
increasing regional and global implications,” he told the Assembly. “The
evils of modern society, such as terrorism, drug trafficking and organized
crime now know no frontiers, territories or jurisdictions.

“And any attempt to deal effectively with global warming, natural
catastrophes, health emergencies, hunger and extreme poverty will require
much more concerted and effective action by the community of nations and
international bodies such as the United Nations, the World Bank, the
International Monetary Fund (IMF) , the Group of 20, trade organizations and
other global and regional bodies.”

In a separate meeting with Secretary Ban Ki-moon Mr. Piñera
<“http://www.un.org/apps/sg/offthecuff.asp?nid=1978“>discussed the
challenges of middle-income countries, such as income distribution, as well
as access to education and health services for all. Mr. Ban recognized
Chile’s important contribution to UN operations in Haiti.

President Ollanta Humala of Peru <“http://gadebate.un.org/66/peru“>noted
that the risks looming over Latin American economies stem from problems
originating in the United States, Europe and Asia, such as the high levels
of public debt and unemployment.

“Latin American countries are learning to overcome the chronic vulnerability
in the face of these crises,” he said in an address that touched on a host
of issues ranging from coca cultivation and trans-national crime to
strengthening democratic institutions and respecting indigenous peoples.

“We have decided to act in a concerted way, coordinating policies to
strengthen our economic fundamentals and oversee our financial systems,” he
added, stressing the commitment to integration and noting that Latin America
is the region with the greatest inequality in the world.

Also touching on financial issues, Bolivia’s President Evo Morales
<“http://gadebate.un.org/66/bolivia-plurinational-state“>called for the
creation of alternative financial bodies. The International Monetary Fund
(IMF) had shut off Bolivia’s access to international credit and placed
conditions on loans, providing credits to transnational companies instead,
he told the Assembly yesterday.

He also called for reform of the 15-member Security Council, where a small
group of countries now decide on interventions. “It’s a Security Council for
whom?” he asked. “It’s the insecurity council for the Presidents of people
who seek cultural and social liberation and recovery of their economic
resources.”

President Porfirio Lobo Sosa of Honduras
<“http://gadebate.un.org/66/honduras“>said all sectors of his Central
American country had been consulted on the creation of a national plan for
equitable economic growth, salaries and productivity in the face of the
global economic and financial crisis.

Widespread reform of the education system and the provision of equal
opportunities had been made priorities, a family help programme hoped to
reach about half of the country’s families by 2012, and a
nutrition-assistance programme was also under way, he told the Assembly
yesterday. As for sustainable development, Honduras was involved in
shark-preservation programmes and had signed instruments on reducing global
warming and controlling chemical products.
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