Thursday April 21 2016
The money needed to fight climate change and make the Sustainable Development Goals a reality is hidden in tax havens and stowed away in the pockets of vulture funds, as world leaders gather at the UN to sign the climate treaty and discuss the new goals.
The leaders arrived after three days of negotiations on Financing for Development ended in deadlock.
Tove Maria Ryding, Tax Coordinator at the European Network on Debt and Development (Eurodad), said: “As the Panama Papers showed us, there’s no lack of money in the world. However, instead of being used to fund poverty reduction and climate action, billions of dollars are tucked away in tax havens. “During the Financing for Development negotiations, more than 130 developing countries have called for a transparent and democratic global tax process under the United Nations to resolve the problem of tax havens, but the proposal keeps getting blocked by rich OECD-member countries, several of which are tax havens themselves. The OECD has on the one hand rejected a fundamental reform of the rules, and on the other hand refused to let a more representative body do the job.
“We need our governments to start cooperating and committing to solving the crisis in the global tax system by kick-starting a negotiation under the United Nations. People all over the world are demanding change. Time to give it to them.”
This was also the week when Argentina had to take on new loans to pay 10 billion dollars to creditors known as ‘Vulture Funds’, which refused to participate in a debt restructuring agreement to resolve the country’s debt crisis.
Bodo Ellmers, Debt Coordinator at Eurodad, said: “While countries are scrambling to find financing for development, vulture funds will pocket more than 10 billion dollars from Argentina. This is a tragic consequence of the fact that governments have failed to develop a global debt restructuring framework that can help countries out of crises. And Argentina is almost certainly not the last victim. At the moment, we’re seeing severe debt problems emerge in many of the world’s poorest countries.”
At the same time, new aid figures released by the OECD last week show that most developed countries have failed to deliver on their aid promises, and much of the money reported as ‘aid’ never leaves rich donor countries.
Jeroen Kwakkenboes, Policy and Advocacy Manager specialising in aid at Eurodad, said: “Many rich countries have failed to deliver on promised financial support to poor countries. At the same time, they are raiding their aid budgets to pay costs in their own countries, often at the expense of the poorest. These funds are especially crucial for the world’s lowest-income countries, which will not be able to achieve the sustainable development goals without this support.”
María José Romero, Private Finance Coordinator at Eurodad, added that instead of fulfilling aid commitments, world leaders are using increasing amounts of public funds to ‘leverage’ private finance, without ensuring there are sufficient checks and balances in place. “Last week the heads of multilateral development banks and finance ministers met in Washington to again push controversial tools to leverage international private capital to fund sustainable development projects. These include Public Private Partnerships. At the same time they have failed to ensure strong guidelines for financial, social and environmental accountability of private finance.”ENDS
Julia Ravenscroft, Communications Manager, Eurodad: +32 486 356 814.
Tove Ryding, Tax Justice Coordinator, Eurodad: +32 491 208 790.Notes to editors:
• To read more about the need for an intergovernmental Global Tax Body at the UN, read Eurodad’s press release: www.eurodad.org/Ffdfollowup
. To read a Q and A on a Global Tax Body go to http://www.eurodad.org/files/pdf/57139b527d127.pdf
• To read Eurodad’s press release about last week’s Official Development Assistance statistics published by the OECD go to: http://www.eurodad.org/2015AidStatistics
• Eurodad (the European Network on Debt and Development) is a network of 46 civil society organisations (CSOs) from 20 European countries, which works for transformative yet specific changes to global and European policies, institutions, rules and structures to ensure a democratically controlled, environmentally sustainable financial and economic system that works to eradicate poverty and ensure human rights for all. Please visit www.eurodad.org