Published 16/10/18 5:03 pm
The Crash that Shook the World
Some of the world’s poorest countries were hit hard by the financial crash and are still struggling to recover. For us to really fight poverty and the causes of climate breakdown, we need to transform our financial system – to make it work for people and planet.
On September 15th – the ten year anniversary of the start of the banking crash – Stamp Out Poverty and the Robin Hood Tax (alongside unions and other campaigning organisations) launched the 10 Years On campaign in the heart of the City of London. We demanded that a decade after the crash and austerity, we need a financial system that works for everyone.
Ten Years On in the UK…
In the UK, banks were bailed out and we were sold out. Since 2010, we’ve seen our hospitals and schools cut by £50bn – the same amount that bankers from the Big Four UK banks made in bonuses over the same period. Austerity hit those least responsible hard, with little impact on the system or people that caused the crash.
…And around the world
This is even truer for developing countries, where the global recession caused by bankers in the UK and other rich countries hit money available for public spending hard. In 2009-10, low income countries lost out on $65bn from tax – this could have paid for essential public services like health and education. Some countries are still struggling to recover from the impact of the crisis and money for these things are needed now.
The crisis also saw donor countries turn inwards, away from global development issues. Wealthier governments continue to fail in meeting their international commitments to poorer countries, with contributions stalling at 0.3%, less than half the 0.7% promised We recently saw politicians meet in New York to discuss the Sustainable Development Goals – a series of targets to combat (among other things) poverty, climate breakdown and inequality. But not enough is being done to turn the tide on these pressing issues.
Why the urgency?
Right now, 650 million people live in extreme poverty, 800 million people are malnourished and almost 60 million children miss out on primary school around the world.
The Sustainable Development goals aim to change all this. As it stands, between $3 and $11 trillion per year will need to be raised to make them a reality. Some of this can be paid for out of taxes in developing countries, foreign investment, and aid from donor countries. But even after this, there remains a huge funding gap – $2.5 billion a year.
What can we do about it?
We need to make sure that those who can afford to help, make a fair contribution to reaching these goals. A Robin Hood Tax could go a long way. Globally, a tax on financial transactions – those carried out largely by banks, not people – could raise up to $500 billion every year. And we know they work – existing taxes like this already raise $30 billion a year. And we know they can help people – France brought in a financial transactions tax in 2013 and ruled that 50% of it must be spent on development aid and climate change.
We could do more.
Current proposals are cause for hope, particularly in Europe. Six months of the EU FTT – which could raise €22 billion a year and is in the later stages of talks – could plug the global funding gaps for childhood immunisation, malaria protection, and mother and child malnutrition, helping save over 7,000 children’s lives in developing countries every day, with money left over to send 90 million children to school a year.
And if we’re able to push this out across major financial capitals everywhere, it wouldn’t just help raise money. It would also make our financial system a lot safer. A Robin Hood Tax can help prevent the damaging types of trading that led to the financial crisis in 2008.
On the tenth anniversary of the crash, we can’t afford not to change our financial system for good.
