In this section are a series of issue briefs and policy briefs on different areas and institutions. The issue briefs provide readers with background information. Policy briefs go beyond backgrounders by adding the Halifax Initiative Coalition's stated policy position on the issue.
A growing number of politicians, civil society organizations, economists and some financiers have become strong advocates of a global Financial Transactions Tax (FTT). An FTT is a tiny tax on financial market transactions such as equity, bond, derivative or foreign exchange trades.
Political leaders, including the presidents of France and Germany and the prime minister of Britain, back an FTT as one of the best ways to fund programs to fight world poverty, pay for climate mitigation and adaptation costs and make financial institutions pay their fair share of the costs of the global crisis which, in large part, was created by their practices. Prominent economists advocate a Financial Transactions Tax as one way to cool down excessive speculation in financial markets, a principal cause of the economic crisis.
Rethinking the international financial system during a time of crisis
On October 19 and 20, 2009, the Halifax Initiative held a conference, co-hosted by The North South Institute, the University of Ottawa and the School of International Development and Global Studies (SIDGS), entitled "What’s Missing in the Response to the Global Financial Crisis?" The meeting brought together experts from a range of backgrounds to analyze the challenges facing the global economy, discuss the ways in which the international community has responded to the current financial crisis, and identify shortcomings in these responses.
The Official Development Assistance (ODA) Accountability Act (ODA Act) came into force on June 28, 2008. This now legally requires Canadian ODA to contribute to poverty reduction, take into account the perspectives of the poor, and be consistent with international human rights standards. Over the past year, the Canadian International Development Agency (CIDA), Foreign Affairs Canada (FAC), and Finance Canada have been developing plans on how to interpret and implement the Act. To date, only Finance Canada has held a consultation on the Act, with neither CIDA nor FAC disclosing its plans. Consultations must be held before September 30, 2009, when CIDA is expected to release the first annual report on the Act.
When US financial powerhouse Lehman Brothers collapsed last fall, the world saw the start of an unprecedented collapse in global stock markets, bringing with it the loss of billions of dollars of investment around the world and severely shaking the foundations of the international banking system. Gloomy economic forecasts, a loss of investor confidence, and mass capital flight have all contributed to the worsening of the current global financial crisis. A decade ago, a similar situation unfolded in East Asia when market speculation sparked investors to pull out billions of dollars of capital, inflating debt and destabilizing markets in the region. In response, the Chiang Mai Initiative emerged in an effort to protect Asian markets from future crises. But has it stood up to today’s global economic collapse? And is an Asian Monetary Fund on the horizon? This brief explores these, and other, issues.
What is the Bank of the South?
On December 9th, 2007, representatives from Argentina, Bolivia, Brazil, Ecuador, Paraguay, Uruguay, and Venezuela met in Buenos Aires, Argentina, to launch “el Banco del Sur” or the Bank of the South (BoS). With the creation of the Bank, the leaders of Latin America envisaged a new development institution to help promote growth and tackle poverty. The BoS was originally proposed in 2006 by Venezuelan president Hugo Chavez. Chavez, along with other South American leaders, wanted a Bank that would allow them to assert their political and financial independence from traditional international financial institutions (IFIs), like the International Monetary Fund (IMF) and the World Bank, and put an end to decades of structural adjustment policies imposed by the IFIs on countries in Latin America.
The World Bank and Climate Change
The World Bank is one of the most powerful financial institutions in the world. Created in 1944, the Bank has now become the world’s largest public “development” agency, influencing the policies of the majority of the world’s developing and emerging economies. In recent years, noting the significant impact that climate change is already having on developing countries and the gap in financing mechanisms available for addressing these impacts, the World Bank has increasingly staked a claim for itself as a key player on the issue – with widespread criticism from developing country governments and civil society around the world.
In 1944, the Bretton Woods Conference established the World Bank and International Monetary Fund (IMF). Every year at the end of March, the Minister of Finance tables a “Report on Operations under the Bretton Woods and Related Agreements Act”. As of 2008, these annual reports provide a comprehensive introduction to the institutions and Canada’s place within them, an overview of Canadian priorities and actions in 2007, and Canadian medium- term priorities looking forward.
Since 1995, the Halifax Initiative Coalition (HI) has produced report cards on these annual reports to Parliament. These report cards drew attention to the perfunctory nature of the reports and the absence of any substantive content with respect to Canadian priorities, policies and positions on the various issues before the Bank and Fund. They evaluate the transparency and accountability of Finance Canada to parliamentarians for Canadian activities at the institutions, and propose a model, based on best practice, for enhancing the report.
On May 29, Bill C-293 or the “better aid bill”, received royal assent. This now legally requires Canadian official development assistance (ODA) to contribute to poverty reduction, take into account the perspectives of the poor, and be consistent with international human rights standards. The Canadian International Development Agency (CIDA) and Foreign Affairs Canada (FAC), among others, are in the process of developing plans on how to implement the Bill in practice. These comments are intended to help CIDA and FAC in their interpretation of the Bill for the various international financial institutions for which they are the lead agencies.
On May 29, Bill C-293 or the “better aid bill”, received royal assent, now legally requiring Canadian official development assistance (ODA) to contribute to poverty reduction, take into account the perspectives of the poor, and be consistent with international human rights standards. Finance Canada, among others, is in the process of developing plans on how to implement the Bill in practice. These comments are intended to help Finance Canada in its interpretation of the Bill for the various international financial institutions (IFIs) for which it is the lead agency.