September, 24 2009, 11:53am EDT

For Immediate Release
Contact:
Jon Slater (UK) +44 7876 476403, jslater@oxfam.org.uk
Helen Da Silva (US) +1 617-728-2409, hdasilva@oxfamamerica.org
100 People Every Minute Pushed Into Poverty by Economic Crisis
LONDON
The G20 should take urgent
action to protect poor countries from economic crisis that is forcing
100 people-a-minute into poverty, Oxfam said today.
Developing countries across the globe are struggling to respond to
the global recession that continues to slash incomes, destroy jobs and
has helped push the total number of hungry people in the world above 1
billion. The economic crisis arrived as poor countries were already
struggling to cope high food prices and floods, droughts and food
shortages linked to climate change.
Oxfam analysis of economic data has discovered that governments in
Sub-Saharan Africa will be $70bn worse off this year as a result of the
global slump and unlike rich countries they cannot borrow their way out
of trouble. Without outside help governments will find it increasingly
difficult to respond to the climate, food and economic crises and to
avoid cutting spending on schools, clinics and other anti-poverty
programs.
Max Lawson, Oxfam senior policy adviser, said: "Green shoots of
economic recovery have not reached the poorest countries which are now
suffering severely in the global downturn.
"In the time it takes G20 leaders to tuck into dinner tonight
thousands more people will be pushed into poverty and forced to survive
on less than $1.25-a-day.
"But despite feeding their own economies a much needed stimulus, the
G20 has not yet provided even half the $50bn bailout it promised poor
countries in April."
Oxfam is calling for a $290bn package of measures to ease
the burden on developing countries without hitting ordinary taxpayers. The package includes a 'Tobin tax' on currency transactions, a debt moratorium and a crackdown on tax havens.
Lawson said: "Existing aid levels are not enough to protect the
status quo let never mind reduce poverty in the face of the economic
crisis, climate change and rising food prices.
"The G20 has the chance to change the bad habits of the past and
come up with new solutions to the problems facing poor people. A
currency transaction levy on the banks that helped cause the global
slump could bring in $50bn to help those suffering in a crisis they did
nothing to cause. It is time bankers paid a bonus to the world's poor."
Oxfam is also calling on G20 leaders to fulfil a promise made by
President Obama in July to deliver new funds to help poor countries
cope with climate change. This funding is vital to break the deadlock
in climate change negotiations leading up to the make-or-break UN
Summit in Copenhagen in December. Oxfam calculates that $50bn-a-year is
needed to help poor countries cope with climate change and another
$100bn is needed to help them control their emissions.
David Waskow, Oxfam climate adviser, said: "The clock is ticking on
the chances of a fair deal to prevent misery for millions at risk from
climate change. It is time for G20 leaders to stand up and deliver the
money needed to protect poor people."
Notes to editors
People falling into poverty:
- The World Bank estimates that 50 million more people will
be pushed into poverty, equivalent to almost 100 during every minute of
2009. - The UN estimates the figure could be as high as 100 million.
How Oxfam's proposed $290bn package breaks down
Implement a Currency Transaction Tax (CTT) of at least 0.005% on international currency transactions.
It is estimated that such a tax could generate a minimum of $30 billion
per year if applied to the four major international reserve currencies
(US Dollar, Yen, Euro and British Pound). If more currencies were
included, this figure could increase as high as $50bn. A slightly higher rate could also provide more resources for government spending in rich countries facing cuts in services.
Transfer half of rich countries' new Special Drawing Rights allocations.
Agree that at a minimum all the G8 and other major donor countries will
transfer half of their allotted new allocations of IMF Special Drawing
Rights (SDRs) to Low Income Countries. SDRs are a form of IMF quasi
currency distributed to member countries. The April G20 agreed to
create $285 billion worth of SDRs, and rich nations will receive $177
billion of this amount. Oxfam is calling for half of this, $89 billion, to be transferred to the poorest countries.
Deal with tax havens. Put in place a multilateral
agreement for the automatic exchange of full tax information and
require country-by-country reporting of subsidiaries, sales and profits
by multinational corporations, to help developing countries recoup lost
tax revenue. This could result in a further US$160 billion for poor
countries, and at the same time would enable rich countries to recover
their lost tax revenues. The current OECD initiative on tax havens,
supported by the G20, relies on bilateral agreements between countries.
To date no developing country has signed a bilateral agreement with a tax haven.
A debt moratorium. Oxfam is asking debt repayment
for low-income countries should be cancelled during 2010. They should
also not incur additional interest on the debts during this period.
This would give these countries approximately $10 billion (total
external debt service for LICs in 2007 - the last year with available
data - was $9.7bn) which they could instead invest in much-needed
services and economic stimulus in their countries. This should be an interim step towards full debt cancellation for all low-income countries that need it.
President Obama's climate promise. Speaking at the
G8 summit in Italy in July, President Obama said: "...we agreed to
substantially increase financial resources to help developing
nations... We've asked the G20 finance ministers to take up the
climate financing issues and report back to us at the G20 meeting in
Pittsburgh in the fall."
Oxfam International is a global movement of people who are fighting inequality to end poverty and injustice. We are working across regions in about 70 countries, with thousands of partners, and allies, supporting communities to build better lives for themselves, grow resilience and protect lives and livelihoods also in times of crisis.
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