For Immediate Release
Bailouts Dwarf Spending on Climate and Poverty Crises
U.S., European Governments Set to Spend 40 Times More to Rescue Financial Firms than to Fight Climate and Poverty Crises in the Developing World
WASHINGTON - A new report finds that the approximately $4.1 trillion the United States
and European governments have committed to rescue financial firms is 40
times the money they're spending to fight climate and poverty crises in
the developing world.
report is being released in advance of two summits, where rich country
governments are widely expected to use the cost of their financial
sector bailouts as an excuse to backtrack on global aid and climate
November 29 to December 2, representatives of United Nations member
states will converge at the Financing for Development conference in Doha, Qatar to review aid obligations made six years ago. From December 1 to 12, international negotiators will convene in Poznań, Poland to hammer out commitments to fighting climate change, including climate-related financial assistance for developing countries.
financial crisis is only one of multiple crises that will affect every
nation - rich or poor," explains IPS Director John Cavanagh. "Skyrocketing
poverty and unemployment in the developing world will mean even more
brutal global competition for jobs. Climate change imperils the very
future of the planet. And yet thus far, the richest nations in the
world appear fixated almost entirely on responding to the financial
crisis, and specifically, on propping up their own financial firms."
RATIO OF FINANCIAL BAILOUTS TO DEVELOPMENT AID: U.S.
and European governments have committed approximately $4.1 trillion to
aid struggling banks and other financial institutions. That's more than
45 times the sums they spent on development aid last year.
AIG BAILOUT ALONE TOPS AID:
The U.S. government's $152.5 billion rescue plan for one single company
- AIG - far exceeds the $90.7 billion U.S. and European governments
spent on development aid in 2007.
BEAR STEARNS REAPS MORE THAN U.S. AID RECIPIENTS: The
U.S. government spent $23.2 billion in aid to all developing countries
in 2007 - far less than the $29 billion bailout for investment bank
FANNIE/FREDDIE BAILOUT NEARLY 1,000 TIMES U.S HAITI AID:
The U.S. government has committed $200 billion to prop up mortgage
lenders Fannie Mae and Freddie Mac, a figure that dwarfs the $209
million in economic aid in 2007 to Haiti, the Western Hemisphere's
RATIO OF FINANCIAL BAILOUTS TO CLIMATE FINANCE: Although the climate crisis poses catastrophic risks to the global economy, U.S.
and Western European governments have committed 313 times more to
rescuing financial firms than the $13.1 billion in total new
commitments made to help developing countries respond to the climate
crisis over the next several years.
UBS BAILOUT FIVE TIMES CLIMATE FINANCE:
The Swiss government has committed $60 billion to rescue the ailing
investment bank UBS. That's more than five times the amount that all
Western European governments have committed, above and beyond
development aid, in climate finance for developing countries.
U.S. CONTRIBUTIONS TO CLIMATE FINANCE = $0:
The U.S. Congress hasn't approved any contributions to the developing
world's climate change efforts, in part because the Bush administration
insisted such financing be channeled through the World Bank, an institution with a poor environmental track record.
"Such extremely lopsided priorities will come back to haunt the United States
and the rest of the global North in the long run," says IPS Global
Economy Project Director Sarah Anderson. "The richer countries not only
have an obligation to clean up the messes they've made abroad. It's
also in their interest."
Authors include: Sarah
Anderson, IPS Global Economy Project Director; John Cavanagh, IPS
Director; and Janet Redman, Researcher with the Institute's Sustainable
Energy and Economy Network.