All entries for December 2004

December 12, 2004

The other side of the argument….

Follow-up to Conscientious Objection to War through taxes from Cutcher's Blog

Just wanted to thank the people that commented on this piece. I appreciate that it is a controversial idea that raises it's own problems. By giving tax payers the right to determine how areas of their taxes are spent you do 'open up a whole new can of worms'. I admit that this could lead to people opting for the way their money is spent and this could damage the running of our government. Obviously, we ultimately do democratically elect our governments and they are then responsible for the whole pot of money,to be used for the common good. If we don't like the way it is spent then we can protest, lobby and apply democratic pressure. I admit that when some people opt for a peace tax, others may opt for more nuclear weapons and it is possible that the situation could get worse. I understand this is a very valid argument. Nonetheless I do feel uneasy about my taxes funding military programmes that I morally disagree with, and so, I feel this issue is worth noting. Like much in life, it is a hazy and uncomfortable area. The time to throw ideas about is at university, so lets do it! I'm certainly more unsure and undecided on the issue than I was originally.

December 11, 2004

The Tobin Tax (kind of a feasible Robin Hood initiative)

Now, I am certainly no economist, but the 'Tobin Tax' has been persistently brought to my attention over the past year and seems to be a fantastic idea that needs to be brought into mainstream awareness. I understand that in our 'virtual' financial market, trillions of dollars change hands every day. I also understand that despite great wealth in the world, thousands of people die from poverty every day. This is lunacy at it's most disgusting level. The Tobin Tax actually seems to benefit our own economies by offering stability, and it is a huge opportunity to generate aid for the third world. Below I will explain the reasoning behind it and the international support that it is receiving. It was talked about a great deal at the European Social Forum which I attended, and my Dad has banged on about it for a while now.
The information below was taken from
War on Want
Tobin Tax

ORIGIN - Proposed by Nobel-prize-winning economist James Tobin in the 1970s.

Over one trillion dollars ($1,000,000,000,000) changes hands every day on global foreign exchange markets. More than 80% of this trading is speculative – buying and selling money for the sake of profit. It involves financial institutions betting on changes in exchange rates in short periods of time.
An internationally agreed tax on currency transactions would be positive. A Tobin Tax would help calm speculation on markets while simultaneously producing revenue to combat world poverty.
We are only talking about a minimal tax, say 0.1%. This would not hold back productive business transactions for trade and investment, but speculative transactions would be hit harder because they rely on very small margins of difference between currencies.
Presently 84% of all foreign exchange transactions occur in just nine countries. A Tobin Tax introduced in these nine would initially provide a workable regime.
The idea is being considered by the UN and EU. Several national governments have called for it's introduction. It has the support of over 350 economists and 900 parliamentarians around the globe. The Canadian Government are pioneering the idea internationally, and France have agreed to introduce the tax when other EU countries sign up to it. Gordon Brown has said the UK have 'an open mind' to the idea but has been non-commital.
The Tobin tax could fund a huge increase in anti-poverty programmes and provide aid in the form of education, healthcare, food, water and sanitation. Estimates predict that a minimal tax of 0.1%, even after it's calming effect, could provide between $50 and $300 billion a year. This pot of money could be governed and distributed by a new democratic body under the UN. Such a body would have to work transparently, with genuine partners in developing nations.
The Tobin Tax would mean a system with more stability and less poverty.

WINTER 2004 - The Presidents of France, Brazil, Spain and Chile with UN Secretary General, Kofi Annan, have said that: “a tax on foreign exchange transactions is technically feasible on a global level”.
Presidents Chirac, Lula and Zapatero then made a formal declaration on hunger and poverty, saying "the greatest scandal is not that hunger exists, but that it persists even when we have the means to eliminate it. It is time to take action. Hunger cannot wait”.

2005 is an unprecedented window of opportunity for the currency transaction tax to be at the forefront of ways to finance international development as Britain hosts both the G8 summit and the presidency of the European Union.

Conscientious Objection to War through taxes

Almost 10% of all your taxes, including VAT, go to the military. In 2003 that was £37 billion, ten times more than what we spent on international development.
Britain's Trident nuclear weapons system costs us £1.5 billion per year.
A group called 'Conscience' campaigns for the legal rights of those who conscientiously object to war to be able to spend the military part of their taxes on peacebuilding initiatives.
The right to refuse military service has been recognised in the UK since 1916. This right to conscientious objection is recognised by the UN as a basic human right. And yet we still have to support the military with our taxes.
We may not have to fight ourselves, but our taxes pay for weapons and the soldiers who weild them on our behalf. We supported the Iraq war, Trident nuclear missiles and the arms trade with our taxes! This is financial conscription with no means to object.
Modern wars are no longer fought with conscript armies, but with high-tech weapons paid for with our taxes.
There should be an 'alternative financial service' for the military part of our taxes. The money could go to a non-military security fund, used to help prevent and resolve conflicts. It would fund peace-keeping operations. Thus, everyone could still contribute to society's defence according to their conscience.
We should have the democratic right to choose how our taxes are spent. Rather than funding the military we should be able to support peacekeepers, projects that research the roots of conflict and work that strengthens arms regulations to prevent arms flowing into areas of conflict. Arms need to be better regulated and controlled and defence money would be well used in supporting this.
Essentially money should be spent on understanding the reasons and complexities behind conflicts rather than pouring money into 'false security' through developing more weapons.

Some objectors to the current system refuse to pay tax until receiving an assurance that it will not be used for military purposes. This is illegal. The Inland Revenue will insist on payment and instigate court action. In rare cases the objectors have been declared bankrupt or imprisoned.
A group called 'Conscience' believes that a 'Peace Tax Return' should be attatched to every Inland Revenue form, offering people the option of choosing how their defense taxes are spent.

To join the campaign for an optional Peace Tax and the right to conscientious objection, please visit –

Third World Debt

I have felt an incredible amount of frustration with politics recently – the "war on terror" strikes me as a huge wasted opportunity. It is the most-used phrase of my day, and as many have pointed out – it is a war on an emotion! Instead of this Orwellian, fear-mongering, elusive fight against infinite enemies we could have had a war on something tangible like POVERTY! We could have used all the moral authority, ridiculous amounts of money and media focus to have combatted poverty. That would have been an almighty war. We could truly have changed the face of our planet, made a real difference and made the world better. We could have saved lives. Instead, we created more fear and hatred and misunderstanding than ever before.
But let us not believe that we can do nothing about poverty. It is the world's largest crisis, it's largest killer (as many bad things stem from poverty, like disease). We could start by cancelling third world debt, and giving real aid and advice to help countries improve themselves.
The Band Aid single, regardless of what you think of it musically, has brought this issue back into the mainstream. 2005 is a year of opportunity, and I will be wearing my 'Make Poverty History' band every day. That is my pledge. We can shake people out of apathy and regain some compassion for all those less fortunate that we share the world with. Below are some basic pieces of information about the debt problem that I have gathered from the following websites. Check them out for more info, or for any questions you have or to see what you can do-
World Development Movement
Jubilee Debt Campaign
Make Poverty History

A little background and the basics -

  • 52 poor countries are in a debt crisis. Their combined total debt is $375 billion
  • Every day Sub-Saharan Africa pays $27million to the rich world in debt service
  • Many countries are forced to spend more on debt than on healthcare or education.
  • Poverty kills 30,000 people every day
  • Poor countries first got into debt in the 60s and 70s. They took out loans from banks, individual countries (including the UK) and groups of countries, through the International Monetary Fund (IMF) and the World Bank.
  • The debt became unmanageable in the late 70s and early 80s when interest rates shot up, increasing the size of the debt. For many countries the interest was so great that they were left with more debt than they had started with, despite repayments.
  • To make matters worse, the lenders attached demanding conditions to the indebted countries. For example, poor countries had to drastically reduce their spending on public services, including health and education. It is now widely accepted that many of these conditions were harmful to poor countries' economies and their people.
  • The loans given by the IMF, World Bank and rich countries were often for goods, particularly arms, that benefitted the industries of rich nations
  • As countries struggled to pay their debts the IMF and World Bank offered new loans to help pay back the old, this time with attatched conditions – for example, poor countries had to allow in foreign imports which wiped out many of their own young industries. Meanwhile rich countries put up devastating trade barriers that made it hard for poor countries to export their goods.

The Progress and Problems so far
The HIPC (Heavily Indebted Poor Countries) Initiative was set up in 1996 by the World Bank and the IMF, to reduce countries' debts.
In December 2000, the UK Government agreed to cancel the debt owed to the UK by 26 countries that have reached the first stage (known as decision-point) of the HIPC Initiative.
$36.3 billion (of $300 billion) of debt has been cancelled to date, through the Heavily Indebted Poor Countries (HIPC) Initiative. But 90% of the debt still remains.
The HIPC process does not get countries to a stable long-term position. It is not designed to cancel 100% of debts but to make debt repayments more manageable. Unfortunately even countries which have completed the HIPC process are still struggling to meet their debt repayments.
Demanding conditions, like cuts in health and education spending, are attached to the HIPC process. They are designed to protect the assets and interests of creditors rather than promote growth, poverty-reduction or stability.
The HIPC defines 'sustainable debt' as the level that allows a country to be milked for the maximum amount possible without it's economy collapsing. So poor countries could continue paying without seeing any reduction in poverty.
Poor countries are also indebted to banks, corporations and some individual countries, which are not being addressed because they are outside of the HIPC process.

The Vision and what should be done
If the debt is dropped, poor countries will have more money to spend on public services, including education and healthcare, as well as in infrastructure and equipment. Without this investment they will find it very hard to competitively trade in world markets. Debt cancellation and fairer trade go hand in hand.

100% of the unpayable debts of the world's poorest countries must be immediately written off, not least as an essential step towards eliminating poverty. However, rapid steps must also be taken to ensure that from now on a just and open procedure is in place, overseen by an impartial body, to resolve debt crises whilst preserving fundamental human rights.
Currently decision makers have vested financial, capitalist interests.

It would cost the UK only £1.3bn to unilaterally write off its share of the multilateral debt of the 42 HIPC countries. Spread over ten years, that is equivalent to less than £3 per person a year. Such a sum would scarcely affect the UK economy, yet would bring about immense benefits to people living in absolute poverty worldwide.

2005 is a big year. The UK is hosting the G8 summit in Scotland in July (the G8 being the world's 8 most economically powerful states – Canada, France, Germany, Italy, Japan, Russian Federation, UK and USA). Third World Debt is on the agenda. The UK is also holding presidency of the EU next year. The UK is leading an International Commission for Africa. The UK have made their committment clear to eliminate 100% of third world debt, but have not done enough in encouraging others to do the same or putting pressure on the IMF (International Monetary Fund) and World Bank. The UK can be a moral authority on this issue and lead by example. Lets make it happen!

December 2004

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