Stamp Out Poverty Campaign : Update - October 2007

As the half-way point towards the target for reaching the MDGs is upon us and funding to meet them still falls substantially short, the NGO world has been moving up a gear to put pressure on world leaders to meet their overseas development commitments.

Stamp Out Poverty went to Labour Party Conference to see whether Brown’s Government is equal to the challenge, and eagerly awaits the forthcoming launch of an All Party Parliamentary Group report into additional aid finance, which comes at a pertinent time.

Also read on for news of mind-blowing growth in the foreign exchange market and how leading world figures have joined the call for innovative finance for development as a means to reach the MDGs.


Signs show MPs are set to support Sterling Stamp Duty

The All Party Parliamentary Group (APPG) on Debt, Aid and Trade will be shortly launching the Report which follows their Inquiry conducted this year into additional sources of finance for development.

Nobel Prize winner Professor Joseph Stiglitz’s evidence was particularly valuable to the APPG and his statement that, “at this low rate, the sterling stamp duty is an entirely feasible proposal” must be given due consideration by the government.

The conclusions and specific recommendations of the Report will remain confidential until its official publication date of November 6th. We will send out a special action-update at that time, so watch this space…

Staggering Increase in Forex Market raises revenue potential

The foreign exchange market has grown by more than 70% from $1,880 billion to $3,210 billion in just 3 years, the latest triennial survey from the Bank for International Settlements (BIS) shows.

This means that potential revenue from a sterling stamp duty of 0.005% has increased from £1 billion in 2004 to £1.7bn in 2007. London’s status as the world’s largest financial market was also reinforced as the UK’s share of the forex market jumped from 31.3% to 34.1%, making it by far the most popular financial centre in the world.

To read the figures from BIS click here, or to read its coverage in the Financial Times click here.

To understand better the implications of these figures, SOP interviews former currency trader and CTT advocate, Sony Kapoor.

SOP: How much is the global trade in foreign currency now worth?

It’s very difficult to get your head around its sheer size. More than $3,210bn are now bought or sold every single day – a staggering $1,400bn increase in the last 3 years alone. This is an enormous 71% increase. In terms of sterling, £136bn is traded every day, which amounts to £34,000bn a year.

SOP: What has London’s role been in this growth?

London is a key player; in fact it is by far the largest in terms of foreign exchange. In other words, of all the money traded globally every year, more than a third of it (34.1%) now takes place within London’s financial institutions. Its nearest rival, the US, saw its share of the market fall from 19.2% to 16.6%.

SOP: Why is London so successful?

There are several theories for this. On a practical note, the UK’s time zone most suits the fast growing Asian economies and more conceptually, London is often seen to be more ‘international’ than the US.

SOP: Has the trade in sterling increased in the same way then?

Well yes and no. The volume of sterling traded around the world has increased but as a proportion of the total volume of currencies traded it has decreased slightly. This is largely due to the fact that the currencies of emerging Asian economies are becoming more in demand.

SOP: What are the implications of the BIS survey for the SSD proposal?

There are several major effects. Firstly we can clearly see that the forex market is as dynamic and successful as ever and the wealth it creates continues to expand. Secondly, London’s increased share of the forex market neatly demonstrates the leadership role London plays in the currency market. Its geographical, political and economic position all contribute towards this status. Thirdly, the volume of sterling traded has increased which means where we had originally calculated that a SSD at 0.005% would generate £1bn, we can now estimate that at least £1.7bn could be collected and distributed to help alleviate extreme poverty and meet the MDG commitments.

SOP: Finally, do you think these figures add increased pressure on the Prime Minister to finally have the courage to tax one of the wealthiest and last remaining untaxed markets in the world?

Most definitely, yes. The idea that this market will remain untaxed for much longer is absurd. There is always the possibility of it being subject to a windfall tax of some sort sooner or later too, but this would be vehemently opposed by the finance industry and of little additional benefit to international development, which needs reliable, sustainable income streams. With the forex market now being fully electronic, vast sums can be collected at little cost or inconvenience and this money absolutely must go towards alleviating global poverty.

SOP:Thanks, Sony

MDG Update at the MDG half-way point

As 2007/2008 marks the mid-way point for the achievement of the UN Millennium Development Goals, set out in 2000 with 2015 as the target date, there has been a flurry of analysis to assess the progress to date.

The UN’s own MDG Report 2007, indicates that the progress is mixed. Where some improvement is notable, much more needs to be done at a much faster pace.

To read more on the Millennium Development Goals and progress towards achieving them, click here

UN Secretary General calls for additional finance

The Seoul Conference of the Leading Group, 2007

At the 4th international conference of the Leading Group on Solidarity Levies to Fund Development in Seoul in September 2007, UN Secretary General Ban Ki-moon, a Korean national, addressed the audience, making his feelings explicit.
“I continue to strongly support the exploration of innovative mechanisms for financing for development…the funding gap we are facing reminds us all of the crucial need for additional flows of development finance. Closing this gap is essential if we are to alleviate extreme poverty, fight diseases and achieve the other development targets.”

This statement by the most senior figure at the UN, clearly supporting the need for innovative development finance, was a powerful opening to an excellent conference.

To read the Secretary General’s opening remarks, please click here

Labour Conference going global: is Gordon’s government going to meet the Goals?

Sitting in the same carriage of the same train as the new Secretary of State for International Development as Stamp Out Poverty travelled to Bournemouth for Labour Party Conference, was a sign of the plentiful lobbying opportunities ahead.

SOP attended some excellent fringe events covering topics on child poverty, tackling the health MDGs and a focus on Africa. At each opportunity Stamp Out Poverty directed a question to the attendant minister regarding the government’s responsibility to fully finance its MDG commitments.

At a joint IPPR/Oxfam debate, SOP Coordinator David Hillman asked the new Secretary of State for International Development, Douglas Alexander, the following, “Given that official development assistance is rising slowly and it is clear that more money is needed to pay for the MDGs, what is the honourable minister’s view of new, additional sources of revenue such as a sterling stamp duty, in order that we can meet the MDGs?”

Rt Hon. Douglas Alexander, Secretary of State for International Development, speaking at an IPPR/Oxfam Fringe Event, Labour Conference 2007

In a rather vague response Mr Alexander said, “We are looking for innovative mechanisms to play a role.”

In his speech to Conference Douglas Alexander urged us to “have the strength to eradicate disease, end poverty and change our world,” and in turn we urge his government to maximise our chances of achieving this by having the strength to generate additional aid revenue from new sources to help pay for the MDGs now.