Caritas calls on G20 to put ethics back into economy

Version française

27 March 2009: Caritas is calling on a G20 meeting in London on 2 April to put the poor at the heart of a reform package that will build a new low-carbon economy, based on justice and equality.

The G20 is a group of developed and emerging economies. They will seek coordinated policies to counter the global recession. The G20 will also discuss the reform of the international financial institutions, such as the International Monetary Fund (IMF) and the World Bank.

Caritas says the economic crisis will impact on poor people the most. At least 53 million people will be driven into poverty in developing countries as a result. This is on top of the 135 – 150 million people driven into poverty by the increases in food and fuel prices last year.

Caritas Internationalis President Cardinal Oscar Rodriguez Maradiaga said, “The global economic crisis happened because ethics were marginalised in the pursuit of greater wealth by the powerful few. We can meet this crisis by patching up the failed globalisation of greed or see it as an opportunity to create a globalisation based on solidarity, justice and peace.

“The poor – those least responsible for the economic crisis – will have the greatest difficulty coping with its impact. When trillions of dollars were found to rescue the banking system, it is morally unjustifiable that some rich countries have cut aid budgets. The economic crisis must not sidetrack rich countries from their obligations on aid to developing countries.

“The crisis can’t deflect the G20 from agreeing a fair and adequate global deal on climate change at Copenhagen later this year. Unless greenhouse gas emissions are dramatically cut, climate change will have much more devastating long term consequences than the economic downturn – we can bail out banks but our climate can’t be bailed out.”

Caritas is calling for reform of the UN, IMF and the World Bank to ensure greater participation of poor countries in decision making. Caritas is calling on the G20 to strongly support the UN high-level conference on the crisis impact on development that will take place on 1-4 June.

Financial resources for development are needed more than ever. Caritas wants donor countries to deliver on long-standing promises to dedicate 0.7% of their Gross National Income (GNI) for international aid. Caritas wants policies to create just trade, debt relief and measures to mobilize domestic financial resources in developing countries.

Caritas is calling for a new international participative system for wealth redistribution set up through the creation of international taxes to fund global public goods and the implementation of adequate fiscal policies at national level.

Tax evasion and illicit capital flows cost every year between $350 and $500 billion to the poor countries. The G-20 must commit to sanctions against tax havens and their users, support the adoption of the code of conduct for cooperation in the fight against capital flight and tax evasion, and call for the upgrading the UN Tax Committee to an intergovernmental body.

Caritas also wants greater transparency of the payments and taxes paid by companies to governments through reforming international accounting standards, requiring companies to publish this information on a country by country basis. This is necessary for creating a more positive impact on poor communities and their local environment.

Lesley-Anne Knight
Secretary General
Caritas Internationalis

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