Use bank fines to fund relief for conflict, disaster-affected: UN official

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United Nations, May 19 (IANS) How to finance relief operations to help people fleeing wars and conflicts or reeling from natural and man-made disasters without raising taxes? Use the billions of dollars of malpractice fines paid by banks, suggests a senior UN official overseeing relief operations.

“Before we talk about increasing taxes on already overtaxed taxpayers across the world for humanitarian action, let us look at other sources of money such as the fines on commercial banks,” John Ging, a director with the UN Office for the Coordination of Humanitarian Affairs (OCHA), said at a news conference Tuesday.

Terming billions of dollars that global banks pay in fines every year “a windfall”, he asked: “Why can’t that be channeled into international humanitarian action?”

With new disasters, natural and man-made, adding to the long-festering humanitarian crises around the world, there was a growing need for resources for relief operations and the shortfall now was $15 billion, Ging said.

The fines levied from scandal-plagued banks in recent years have been substantial. The US alone has collected $204 billion in fines from banks between 2009 and October last year, according to financial services firm Keefe, Bruyette & Woods quoted by CNBC. In Britain, banks have paid the equivalent $77.25 billion in fines for the 10 biggest scandals since 2000, The Financial Times reported quoting the New City Agenda think tank.

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Comparing global spending on military to what is needed for development and humanitarian assistance, Ging appealed to world leaders’ conscience. “The amount of money that is spent globally on the international military, which is declared at $17.6 trillion, is 2.3 percent of global GDP (gross domestic product). We asked for 0.7 percent of GNI (gross national income) for all of the overseas development aid, development and humanitarian aid.”

If the nations on the Organisation for Economic Cooperation and Development (OECD) were to raise aid levels to 0.7 percent of the GNI, an extra $158 billion would be available for development assistance, he said. If 10 percent of that is allocated for humanitarian assistance, that $15 billion would more than cover the deficit, he added.

Alternatively, “if you were to take half of one percent of the global spend on military and give that to humanitarian action that would be the end of our deficit”.

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“My question that I would like answered by global leaders is what do you think the difference would be to our world today if you were to take half of one percent from global military spend in terms of the negative impact that it would have versus the positive impact that saving all these lives on the humanitarian side by using that money,” he said.

Meanwhile, international aid also came up at another venue in the UN Tuesday.

Stressing the need to increase international assistance in order to meet the world body’s development goals, Tanmaya Lal, India’s deputy permanent representative told the High Level Committee on South-South Cooperation that cooperation between developing countries is not a substitute for development aid from developed nations.

“Excessive emphasis on South-South Cooperation as the principal new component of a redefined global partnership is misplaced. In fact, it is the North-South cooperation that needs scaling up to serve the new Agenda (2030 for Sustainable Development).”

The shift in global economic power towards some developing countries “has seen attempts to subsume South-South cooperation in the international aid architecture and subject it to the norms and standards devised for the North-South” aid, he said. “This appears to be driven more from competitive urges and has not been helpful.”

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South-South cooperation differs from North-South aid, he said. “From the start this (South-South cooperation) was based on solidarity, common experience and circumstance and a spirit to share. This was a partnership among friends and equals.”

But on the other hand, North-South cooperation was driven by the goals of “preservation and promotion of geopolitical and commercial interests during the Cold War”, he said. Gradually these became “ever more prescriptive and conditional”.

“Overemphasising the necessity of harmonizing standards between South-South and North-South cooperation is equally misplaced, running the risk of diluting the richness and diversity of South-South cooperation.

“It is, perhaps, ironical that while South-South Cooperation is being discussed in the UN, discussions on North-South aid continue to be a monopoly of the OECD,” he said. “This defies the spirit of universality of the new development agenda.”

(Arul Louis can be contacted at [email protected])



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