As the international community meets at the UN General Assembly to review progress towards the Sustainable Development Goals (SDGs), a new report launched by Citizens for Financial Justice argues that the increased and unregulated growth of the finance industry has been contributing to deepening inequalities across the world.
Spotlight on financial justice – understanding global inequalities to overcome financial injustice exposes the role of financialization – or the expansion of financial actors’ power over the global economy – as a key contemporary driver of global inequalities, spanning from unequal access to food and land, health, women’s rights, housing and infrastructure. The authors point out that our current global financial system is shaped by institutions that do not serve the majority of citizens across the globe, but rather lead to the violation of human rights and environmental devastation.
Flora Sonkin, Policy Research Officer, Society for International Development, said: “Rising inequalities between the global North and South, the economically privileged and the marginalised, between different genders and racial identities, have been historically reproduced and intensified across generations and are defining features of our times. The current rules of our global economy reinforce this vicious circle of inequality by keeping economic and political power in the hands of corporate and financial elites”.
The Spotlight on financial justice report connects different struggles for social justice by exposing the impacts of financialization on the most basic human rights, as felt by so many social groups. Examples include: the financialization of health provision, which affects people’s ability to access affordable and high-quality (public) health services; the transformation of land into a tradeable asset to be purchased and speculated upon, hindering peoples’ right to food, nutrition and health; the financialization of housing, which turns a social good and a human right into a profit-making machine for those with the most money to invest; among others.
“People need to be made aware of the very real impacts of financialization on their lives to be able to question current dynamics. These dynamics have a way of insidiously and covertly infiltrating multiple domains of life – from health and housing, to women’s rights and food. Addressing the pervasiveness and overexpansion of financial actors and products is a critical step in tackling the drivers that generate and reproduce multidimensional inequalities” said Stefano Prato, Managing Director, Society for International Development.
People’s resistance to this process is also brought to the forefront. “It’s high time we find common strategies to address the main drivers of inequalities, including the concentration of power and wealth by the finance industry and the undemocratic governance systems that regulate global finance. We need to reverse the skewed and unfair rules of the game. Grassroots movements are a key part of this resistance,” said Dr. Matti Kohonen, Principal Adviser Private Sector, Christian Aid.
The report highlights the need to bring the world of finance back into democratic accountability and control. It calls not only for building convergence on existing proposals regarding critical new pillars of a democratized economic governance ecosystem, such as an intergovernmental tax body and sovereign debt workout institution under the aegis of the United Nations, but also for addressing the institutional vacuum in regulating financial actors, mostly though not exclusively, the asset management industry. Such measures, underline the authors, could translate into enhanced transparency, participation, and public oversight of domestic and global tax, fiscal and financial policy-making.
Citizens for Financial Justice, an international coalition of civil society groups, including Counter Balance, calls for social movements and civil society organizations to unite under a common agenda for financial justice as a way to challenge the current injustices of our global economy and build new pathways for systemic socioeconomic transformation.