By Citizens for Financial Justice
Citizens for Financial Justice new report – Spotlight on financial justice: understanding global inequalities to overcome financial injustice – is being released on Thursday, 26 September 2019, to coincide with the High Level Dialogue on Financing for Development at the UN.
The report was compiled by Citizens for Financial Justice partners and other contributors, coordinated by Flora Sonkin and Stefano Prato, Society for International Development (SID); Ida Quarteyson and Matti Kohonen, Christian Aid; and Nicola Scherer, Debt Observatory in Globalisation (ODG).
Authors and contributors have come from the following organisations: Christian Aid; Counter Balance; Debt Observatory in Globalisation (ODG); DemNet; FIAN International; Financial Justice Ireland; Globalinfo; KULU – Women and Development; Polska Zielona Siec /Polish Green Network; Recommon; Sempreviva Organização Feminista (SOF); Society for International Development (SID). Special thanks to Karen Judd for copyediting.
Rising inequalities between the global North and South, the economically privileged and the marginalized, between different genders and racial identities, have been historically reproduced and intensified across generations, and are defining features of our times. For instance, while global challenges such as climate change and environmental degradation undoubtedly affect all of us as humans living on Earth, they certainly do not affect us all equally. Differences in geographic location, economic status, gender, age, all come into play if we look at the groups who are systematically suffering from climate change’s harsh consequences.
This is because the current rules of our global economy reproduce a vicious circle of inequality: growing economic inequality and wealth concentration increase political inequality by expanding the ability of corporate and financial elites to influence policy-making and protect their wealth and privileges. Higher levels of inequalities are then passed on to the next generations, culminating in long-term disparities and unfairness felt by marginalized groups.
Especially since the 2008 global financial crisis hit, the governance structures and economic (de)regulations that got us there, especially the unchecked expansion of the financial sector over the rest of the economy or ‘financialization’, finally raised enough red flags. While major banks were bailed out by taxpayer’s money, states neglected their basic human rights obligations by turning to austerity measures, creating pervasive impacts on people’s lives around the globe. Consequences include reducing communities’ access to common natural resources and restricting the delivery of basic public services such as healthcare and housing to the most disadvantaged groups.
In recent years, a significant increase of disparities within and between countries has finally put inequalities under the spotlight within international development debates. The 2030 Agenda recognized addressing their multiple facets (economic, political, social) as one of its Sustainable Development Goals (SDGs), signalling the international community’s commitment to reducing inequalities.
To take advantage of this momentum, understanding the main contemporary drivers of inequalities and finding common strategies to address them are necessary steps towards systemic socio-economic transformation and social justice. Looking at our current challenges through the lens of inequalities offers then a remarkable transformational potential: tackling inequalities in their multidimensional character – social, political, economic, spatial and intergenerational – can become a sort of guiding star in a complex world, an overarching goal to advance sustainable development and address the root causes of marginalization. As part of this effort, this report tackles the inequalities question by looking at one of its main current drivers, the financialization of our global economy, as well as at its counterpart, financial justice.
Through five thematic chapters –
- Food and land
- Women’s rights
– the report shows that rising inequalities, and the overexpansion of the finance industry as one of its key contemporary drivers, have been created and reproduced by skewed and unfair rules of the game. There is therefore an urgent need for peoples’ movements to converge around a common agenda for taking back our economies, reclaiming public services, and protecting our common natural resources. Through this report it becomes evident that local level resistance to financial actors’ penetration is extremely important, but that confronting the drivers of inequality which are now global, such as financialization, requires concerted efforts at higher levels of policy-making as well.
Four main pillars for action are proposed:
Promote shared understanding and ongoing questioning of the dynamics of financialization
It is essential to raise people’s awareness around the very real impacts of financialization on their lives and to provide fresh analytical tools to question current dynamics. Challenging the inequalities problem and how the multiplicity and expansion of financial actors and services is contributing to the problem can avoid unintended complicity, particularly given the insidious and overly covert manner in which these dynamics infiltrate multiple domains of life;
Resist ongoing attempts to shift decision-making away from legitimate and democratic policy spaces, often in the name of ‘financing opportunities’ to advance progress
At the local and national levels, supporting social movements’ resistance to harmful projects, policies and other interventions backed by global financial actors can create tangible wins and can put a face and shape onto a struggle that can so often feel immaterial and hard to grasp;
Reaffirm national sovereignty to re-establish healthy boundaries to financial liberalization and provide critical financing to achieve the Sustainable Development Goals (SDGs)
The latest global financial crisis has critically exposed the vulnerabilities of a liberalized, privately focused financial system. However, many underlying structural conditions that led to the crisis have been only mildly addressed, if at all. It is therefore essential to re-establish national sovereignty to help prevent the next crisis while providing critical financing for sustainable development. This calls for exploring the potential of national development banks, restoring the management of capital accounts within the standard policy toolkits of governments, and, introduce a system of financial transaction taxes, among other measures;
Democratize global economic governance
At the global level, social justice and rights-based narratives should be at the heart of the process of reshaping powerful global institutions and reforming global economic governance. Different sectoral struggles should unite under a common agenda, advocating for the reform of existing institutions and the establishment of new ones which are able to regulate the new and fast evolving financial actors, and can bring finance back into democratic accountability and control. This calls not only for building convergence on existing proposals regarding critical new pillars of a democratized economic governance ecosystem, such as an intergovernmental tax body and sovereign debt workout institution under the aegis of the United Nations, but also for addressing the institutional vacuum in regulating financial actors, mostly though not exclusively the asset management industry. Such measures could translate in enhanced transparency, participation, and public oversight of domestic and global tax, fiscal and financial policy-making.
The time is ripe for acknowledging people’s struggles to resist the multiple facets of the process of financializaton, and for converging strategies to address multiple dimensions of inequality to reach financial justice. The time for financial justice activism is now!