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	Time to institute a Financial Transaction Tax by Jubilee, ITUC, Poverty Matters & agencies   June 2011   Time to institute a Financial Transaction Tax, by Neil McCulloch.   In 1978, the Nobel prize laureate in economics James Tobin proposed levying a small tax on all foreign exchange transactions to penalise short-term speculators but not long-term investors.   These taxes are feasible. In fact, since Tobin"s day they have become more so. Due to changes in the way transactions are settled, it is now much easier for countries to unilaterally introduce certain forms of transaction taxes.   Indeed, lots of countries already have one in the form of stamp duty on share transactions. It would also be possible to have a tax on transactions in your own currency, eg the euro, since central banks have control of the issuance of their own currencies.   A transaction tax would have to be applied to a broad range of areas to avoid market actors simply moving away from taxed financial instruments to untaxed ones, and tax rates themselves would have to vary depending on what instrument you are taxing.   But clearly a multilateral tax would help prevent the kind of tax avoidance we might see if it was introduced in just one country.   How much these taxes would collect depends entirely on what you tax and at what rate. But the numbers are big.   We found that applying a 0.005% tax to foreign exchange markets alone might raise around $25bn per year worldwide. The revenue potential in the UK would be around $11bn, roughly as much as the entire UK overseas aid budget. Applying a financial transaction tax (FTT) on other markets, for example derivatives and over the counter markets, would raise much larger sums.   Overall if these taxes were appropriately designed, they are no more likely to increase market volatility than reduce it.   Given the evidence, it is surprising that a significant source of currently untapped revenue continues to be ignored by so many politicians. Commonly held assumptions that such taxes would be impossible to design and levy, and might create market distortions are not backed up by the latest available evidence.   A financial transactions tax is implementable, both at a European and national level. It would make a useful contribution to public finances and to generating resources for tackling global problems such as climate change and poverty. With increasing political support for such a tax among EU leaders, it is time for policymakers and the financial sector to act.   (Neil McCulloch is a Research Fellow at the Institute of Development Studies, UK specialising in the analysis of poverty in developing countries and the linkages between poverty and economic reform).   June 27th, 2011 (Jubilee Campaign)   The past months have seen many countries formally endorse and promote financial transaction taxes. And most importantly José Manuel Barroso, the President of the European Commission, has announced that they will introduce legislation to the European Union for the implement financial transaction taxes. The legislation is expected after the European summer after the Commission tables its feasibility study on the tax in the coming weeks. Barroso has stated that it is appropriate to introduce at the European level, and then followed at the G20.   In June 2011, the French and German Parliaments have voted in favour of introducing legislation for financial transaction taxes at the EU level and the EuroZone.   On 15 June, the Brazilian parliament has adopted a resolution calling for the Brazilian Government to support a financial transaction tax.   At the UN climate negotiating session in Bonn in early June, the Bolivian government call for an international financial transaction tax to cover the costs of the impacts of climate change, protect forests and finance the clean low carbon future for developing countries.   The Belgium Senate voted in favour of a resolution to support a financial transaction tax at the European level in lieu of a global agreement. The funds raised are to go to development and climate change.   The International Catholic development alliance CIDSE has published a review of a financial transaction tax estimating that as much as $635 billion could be raised each year from a 0.05% financial transaction tax.   This is vital funding for climate change, as the UN works towards the creation of a new fund.   “The fight against climate change is one of the global challenges governments continue to fail to stump up the money for. In decades of international climate negotiations money has proven an important stumbling block. Last December in Cancun, governments agreed to create a Green Climate Fund in the United Nations, which is to receive and distribute up to €70 billion (US$ 100 billion) a year from 2020, but nobody knows yet where this money is going to come from. In times of austerity, governments are reluctant about climate action weighing on their national budgets.”   June 2011   Political support grows for Financial Transactions Tax. (ITUC)   Global pressure is growing on international economic decision makers to make the financial markets pay their way in the global economy, as unemployment grows following the Global Financial Crisis and workers across the world reject cutbacks as the next stage of bailing out an increasing broken financial system.   Today, as unions and NGOs hold actions around the world in support of a Financial Transactions Tax, the ITUC called on decision makers in government to conclude on an agreement to implement the tax as soon as possible.   The tax is getting increasing political support, including a unanimous vote for the tax in Brazil’s parliament and a call by European Commission President Manuel Barroso for the EU Summit on 23-24 June to put the issue on its agenda. (On June 23, 2011 the European Commission committed to draw up legislation for a financial transaction tax on all transactions passing through the EU).   Speculative transactions, including financial derivatives, made the banks $605 trillion in 2010 according to the OECD, or around 10 times the worlds GDP. It is largely untaxed.   “It was this speculative money that was one of the major drivers in the financial collapse in 2008, but as an industry it continues to grow, without delivering anything back to the real economies of national governments,” said General Secretary of the ITUC Sharan Burrow. “This industry must start paying its way, instead of just generating huge profits for the worlds’ bankers and financiers,” Ms Burrow added.   “A simple tax on financial transactions would generate billions of dollars that could be used to create decent jobs, tackle global poverty and fund action on climate change. It’s time the banks stopped getting a free ride on the backs of working people and start to pay for repairing the damage they have caused to the economy,” said Ms Burrow.   The unions argue that the initiative, which would involve a tax of a fraction of a percent on transactions, would also dampen financial speculation, which was one of the main drivers of the recession that started in 2008.   “The argument for this tax is compelling and makes sound economic sense – the banks are using their formidable influence over politicians to try and stop the momentum, but governments need to stand up to the strong-arm tactics of the financial sector and govern in the interests of people,” explained Ms Burrow.   Trade unions and civil society organizations worldwide, backed by many economists and politicians, are today focusing public attention around the world on the demand for a financial transactions tax, and the issue will be at the top of the trade union demands for the this year’s G20 Summit in November, hosted by France. French President Nicolas Sarkozy has been a vocal supporter of the tax.   (The ITUC represents 175 million workers in 151 countries and territories and has 305 national affiliates).   March 2010   Economist Jeffrey Sachs says transaction tax would help meet aid promises, ease spending cuts – and curb the power of the banks.   A tax on every deal conducted by the financial industry would curb the excessive power of Wall Street, avoid the need for swingeing cuts in public spending and pay for the unfulfilled promises to poor countries, one of the world"s leading economists says.   Jeffrey Sachs, economics professor at Columbia University in New York, says that the so-called Robin Hood tax was a means of exercising control over bankers and ensuring they paid the right amount of tax.   "Wall Street has had the most profitable year in its history. It made profits of $55bn (£37bn) in the midst of the biggest downturn since the Great Depression," Sachs said, adding that the profits had only been possible because of US taxpayer bailouts and the zero interest-rate policy pursued by the Federal Reserve, the US central bank. "Bankers are quite happy to pocket large amounts of our money."   A tax on all financial transactions needs to be considered by the leaders of the G20 developed and developing nations in the wake of the financial crisis of the past two-and-a-half years.   Sachs says that a Robin Hood tax levied at 0.05% on every transaction would help countries repair the damage to their public finances caused by the recession. "We need the money," he said "The financial sector is under-taxed. It is out of control."   Sachs said later that if Europe ran up against intractable US opposition to a transaction tax it should be willing to go it alone in a "coalition of the willing".   Wall Street had become so "politically powerful that it has written its own ticket for the past 25 years in a way that"s shocking. The results are shocking. The lack of political responsibility is shocking."   The Robin Hood Tax Sachs said. "It would be a low tax harmonised across countries. It is a progressive and non-distortionary tax." He said one use for the extra tax revenue was to meet the promises made at the G8 summit in Gleneagles in 2005 to double aid to Africa to $60bn. "We are $20bn short of that promise."   Sachs said the current economic recession had been caused by an unregulated financial system in which the market in credit default swaps had grown from nothing to $62tn – equivalent to the output of the global economy – over the past decade. "It happened without one regulator asking one single question. It was a shocking dereliction of responsibility." Visit the related web page
	Millions of vulnerable people threatened by food insecurity by WFP, FAO, UNICEF & agencies   June 28 (Reuters)   The worst drought in 60 years in the Horn of Africa has sparked a severe food crisis and high malnutrition rates, with parts of Kenya and Somalia experiencing pre-famine conditions, the United Nations said on Tuesday.   More than 12 million people are now affected in drought-stricken areas of Djibouti, Ethiopia, Kenya, Somalia and Uganda and the situation is deteriorating, it said.   "Two consecutive poor rainy seasons have resulted in one of the driest years since 1950/51 in many pastoral zones," Elisabeth Byrs, spokeswoman of the U.N. Office for the Coordination of Humanitarian Affairs, told a media briefing. "There is no likelihood of improvement (in the situation) until 2012," she said.   Food prices have risen substantially in the region, pushing many moderately poor households over the edge, she said.   A U.N. map of food security in the eastern Horn of Africa shows large swathes of central Kenya and Somalia in the "emergency" category, one phase before what the U.N. classifies as catastrophe/famine -- the worst category.   Child malnutrition rates in the worst affected areas are more than double the emergency threshold of 15 percent and are expected to rise further, Byrs said. High mortality rates among children are reported.   Drought and fighting are driving ever greater numbers of Somalis from their homeland, with more than 20,000 arriving in Kenya in just the past two weeks, the U.N. refuge agency UNHCR said on Friday. It voiced alarm at the dramatic rise, noting the average monthly outflow had been about 10,000 so far this year.   Almost half the Somali children arriving in refugee camps in Ethiopia are malnourished, and those arriving in Kenya are little better, Byrs said.   U.N. humanitarian appeals for Somalia and Kenya, each about $525 million, are barely 50 percent funded, while a $30 million appeal for Djibouti is just 30 percent funded, she said.   May 2011   Aid money running low as nearly 11 million face devastating drought in Horn of Africa. (Save the Children)   Nearly 11 million people are now facing severe food and water shortages after a life-threatening drought worsened in Kenya, Ethiopia and Somalia, a consortium of leading British aid agencies hosted by Save the Children has warned.   The Consortium of British Humanitarian Agencies (CBHA) says a lack of seasonal rains has led to failed harvests, acute water and pasture shortages, and the deaths of thousands of animals in the region. Thousands of people have already fled their homes in search of water and grass for their livestock.   In some areas of Somalia and northern Kenya up to 30 percent of the population is suffering from acute malnutrition, which is double the amount sufficient to declare a humanitarian emergency.   Member agencies are working to provide urgent support such as clean water, food, and protection for surviving livestock to those in the most immediate need but has warned that a lack of funding is continuing to hamper the response.   CBHA Director Sean Lowrie said “with the United Nations and humanitarian aid organisations already warning of a looming catastrophe in the Horn of Africa, the international aid sector needs more money to respond as quickly and effectively as possible.”   Kenya, Ethiopia and Somalia form part of the Horn of Africa, a consistently drought-prone region still recovering from one of the worst droughts in recent history. Over 20 million people were facing life-threatening shortages of food and water in 2009 following successive years of failed rains.   Early warning systems mean humanitarian agencies have become increasingly efficient in spotting potential emergencies before they reach critical stages, but the CBHA has warned that the current drought has the potential to be as devastating as that of 2009 if appropriate action is not taken immediately.   "We know the lessons from previous disasters and we have a moral responsibility to act, but we are limited by this lack of funding at a critical time," Sean Lowrie said.   (Members of the CBHA include ActionAid, Action Against Hunger, CARE International UK, CAFOD, Christian Aid, Concern Worldwide UK, HelpAge International, International Rescue Committee UK, Islamic Relief Worldwide, Merlin, Oxfam GB, Plan International UK, Save the Children UK, Tearfund and World Vision UK).   Apr 2011   Somalia: "Worst drought in a lifetime".(IRIN)   Officials and aid workers in Somalia"s Middle Shabelle region have raised the alarm over the plight of drought-stricken villagers urgently needing food and water.   "We are experiencing the worst drought we have seen in decades; since the beginning of March, we have buried 54 people who died from the effects of the drought, seven of them today [20 April]," said Ali Barow, leader of the small town of Guulane, 220km northeast of Mogadishu, the Somali capital.   Barow said Guulane and the surrounding villages of Eil Barwaaqo, Hirka Dheere and Hagarey, with an estimated population of 20,000-25,000, were suffering the effects of a prolonged drought.   He said a local NGO had undertaken water trucking but it was not enough and "did not reach most of the residents. They did well but ran out of money before they could make much of a difference."   Abukar Abdulahi Tifow, the country director of the Women and Child Care Organization (WOCCA), a local NGO, who visited some of the villages, told IRIN the situation was desperate. "What we saw was depressing; some of the villagers were eating wild berries and cooking "garaz" [a yellowish bean normally eaten by animals during drought]; that was all the food they had."   Tifow said his group trucked water for 1,420 families (about 8,520 people) in the four weeks they were there. "Unfortunately, there were many more we did not reach. We simply ran out of funds."   He said all the water points in the area had dried up. "The remaining water points are not fit for human consumption but people are desperate and will drink anything."   Tifow said almost all the deaths were water related. "Most of them died of AWD [acute watery diarrhoea] that was caused by drinking contaminated water."   Alasow Sharey Bool, 80, said both people and livestock were dying in the area. "In my 80 years, I have never experienced what I have seen now. This is the worst drought I have witnessed in my lifetime."   Bool said he had seen animals trying to eat the entrails of a dead animal: "That is how desperate the situation is."   He said in the past three years, the area had had very little or no rain. "What is making it worse is that we don"t have anything to fall back on. We have not recovered from the last drought and now this one seems to be going on for ever.   "We have had problems with food shortages and water but I have never seen anything quite like this," Bool said, urging aid agencies to help.   A local journalist, said: "The entire region is suffering from a combination of a severe drought and incredibly high prices for the most basic necessities and needs help."   According to UN estimates, at least 2.4 million Somalis need help across the country, with another 1.4 million being displaced.   April 2011   Lack of funds threatens UN food aid to millions of vulnerable Afghans.   The United Nations World Food Programme (WFP) said today it urgently needs $257 million to continue providing food and assistance to over 7 million vulnerable Afghans, most of whom are women and children.   “We are making this appeal to give us the best possible chance of plugging the looming gaps in supply,” said Louis Imbleau, WFP’s Country Director for Afghanistan. “Food security is the bedrock of development in this country – especially for the youngest and most vulnerable.”   WFP’s operation in Afghanistan has a twin focus, providing lifesaving relief and emergency aid for immediate needs, including those stemming from conflict and natural disaster, and improving overall food security, in partnership with the Government.   The agency lacks half of the funding it needs to assist 7.3 million Afghans across all 34 provinces this year.   This will affect millions of people in Afghanistan, where wheat is the primary food staple and is used in rations for nearly all WFP operations, including for women and other marginalized groups, and emergency food distributions. The funding shortfall will also mean that WFP will have to scale back school-feeding activities by half, affecting more than a million schoolchildren.   “By August, without swift and robust support from the international community, WFP will have exhausted all remaining commodities and be forced to reduce or suspend some parts of the operation,” it stated.   The agency is calling on donors to provide an injection of funds so that it can begin procuring food locally and regionally to avoid a potentially devastating break in food supplies.   April 2011   As drought deepens in Ethiopia, UN and partners urge scaling up of aid.   United Nations humanitarian agencies are calling for increased assistance to an estimated 2 million people affected by drought in the Horn of Africa country, where emergency conditions are projected to persist until the next rainy season arrives in October.   Water is being transported by truck to drought-hit residents of the southern and south-eastern lowlands of the country, the UN Office for the Coordination of Humanitarian Affairs (OCHA), said in an update issued today.   UN aid agencies, working with national authorities and non-governmental organizations (NGOs), are also distributing food to households in need and providing health care, veterinary services and livestock feed.   The agencies have warned of an increased risk of disease outbreaks, which has been plagued by drought in recent years.   The Ethiopian Government has requested an additional $75 million for humanitarian assistance this month, while UN agencies and their partners have called for more resources to meet increasing needs and expand operations in the coming months.   High global food and fuel price rises have raised the cost of buying and importing essential commodities, including food.   29 April 2011   UN agencies begin emergency operations to feed 3.5 million people in Nth Korea.   The United Nations World Food Programme (WFP) and the UN Children’s Fund (UNICEF) have announced plans to introduce emergency operations in the Democratic People’s Republic of Korea (DPRK) to feed an estimated 3.5 million people in desperate need after crop losses and a particularly bitter winter.   Women and children will be the focus of the one-year WFP operation, which follows an assessment by several aid agencies of food security inside the DPRK, according to a press release issued by the agency. The operation is expected to cost just over $200 million.   UNICEF has launched a $20 million appeal to fund assistance programmes in the five DPRK provinces with the highest rates of malnutrition and in other counties with similar problems.   Many families have already resorted to cutting the size or number of meals each day, and Government-supplied rations provide only about half of a person’s daily food needs.   “We face a critical window to get supplies into the country and reach the millions who are already hungry,” said Amir Abdulla, WFP’s Deputy Executive Director and Chief Operating Officer. “Our primary concern is for those who are most vulnerable to shocks in the food supply – children, mothers, the elderly and large families.”   “WFP has worked in the DPRK for 15 years and we will be drawing on all that experience and expertise to ensure this operation provides vital, timely food and nutrition to those who cannot support themselves through these difficult months,” Mr. Abdulla noted.   UNICEF’s assistance programme will target more than 400,000 young children and an estimated 165,000 pregnant or lactating women, regarded as among the most vulnerable groups in the current crisis.   Ms. Mercado said the programme will also aim to help children living permanently in institutions as they do not have extended families from which to draw support.   A survey carried out in 2009 found that 32 per cent of DPRK children were stunted, with even higher rates in some rural areas.   If no action had been been taken to combat the current food and nutrition crisis, children who are now mild to moderately malnourished can rapidly become severely malnourished and decrease their chance of survival or full development potential.   Maternal nutrition is of great concern as well, as over a quarter of women in DPRK aged 15-49 are under-nourished.   http://www.wfp.org/countries/korea-democratic-peoples-republic-dprk Visit the related web page
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