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Introduction

World Public Finances (WPF) has been launched by NIGD and Liberdade Brasil to constitute a process in which we work towards a common conceptual agreement on which measures are needed to safeguard public finances in all levels. Nobody is questioning the need for increased public finances, but most disagree upon its availability and its potential sources. It is the greatest paradox of our time, the wealth creation capability of the world has never been as high, and we seem to lack public finances to fund even the basic needs of citizens both North and South. What we argue through WPF is that there are widely available sources of financing that are not available due to large amounts of money used on debt repayments, lost to tax evasion and tax competition, held up in currency reserves or lost due to corruption in public administration.

We therefore urgently need to turn away from focusing on aid as the main catalyst for prosperity in the developing world. In stead, we should turn towards public finances, domestic resource mobilisation, questioning the legitimacy of odious debt, debt arbitration and ownership of assets in the developing world. Ownership of assets includes burning issues such as land reform. Mineral resources are crucial, for a massive transfer of wealth from North to South, thus introducing high (above 10%) royalties on extractive industries is needed. Even the poorest countries have mining operations, though currently for example, in Mauritania and Niger local populations benefit next to nothing from them. Therefore public finances needs its watch dogs, campaigns by active citizens.

The idea behind launching the WPF platform is to work together between these issues and campaigns in order to come up with a coherent proposal to shift the global financial system to benefit social justice and global solidarity. There are many campaigns looking at the national level, especially in terms of corruption, or working on single aspects where a potential tax base is not being utilised, for instance currency transactions. Politically, we believe that the WPF platform has the capacity to contribute towards work of a complete overhaul of the global financial system, turning the neo-liberal tide, and significantly thus contributing to narrowing global wealth inequalities.

What we propose is that we draw up an ‘open declaration’ at the Nairobi WSF among the participants of the World Public Finances platform. Participants by clarifying the concept, sharing their activism, and spelling out their visions is an open process of making a declaration of common aims and aspirations. Whether or not it becomes an explicit declaration with signatures is an issue left to the movements themselves at the meetings.

Actions in Bamako

Read the Bamako WPF report

The World Public Finances platform held one seminar in Bamako. The speakers presented the history of the initiative, and actions and mobilisations happening around the world for the support of public finances. Then the participants around the table were asked to contribute their understanding of world public finances, the proposals and activism can be classified under the following themes:

1)Global taxation initiatives including the currency transaction tax and kerosene tax are needed for global wealth redistribution and regulating global markets. New institutions are proposed for the levy of global taxes;
2)Debt arbitration should constitute a new global institution and odious debt should be completely and unconditionally cancelled, reparations are proposed to be paid by financial supporters of governments that violated human rights;
3)Tax justice can be achieved through
a) Tackling the sovereignty of offshore financial centres with the global community and states that support them, ending banking secrecy;
b) Ending tax competition between states to attract investment;
c) Creating new global conventions in tax matters concerning the automatic exchange of information in tax matters and public accounts of all subsidiaries of all companies and trusts;
4)Transparency is paramount. Public finances in all levels, including overseas and multilateral aid, should have their watch dogs to curb corruption in public administrations. Money laundering rules need to be tighter, looking at the systemic supply-side of corruption in particular in offshore financial centres and other territories where banking secrecy prevails.

The only area that was completely absent were trade issues, the platform has to ask whether we are separate from all trade issues. With this respect, we can first note that taxation and financial transactions are an integral part of any trade and investment decision that companies make. Also free trade agreements may constitute a significant fall in public finances in low-income countries if they agree to lower their trade taxes, which may account up to 30% of all tax revenues in this group. This fall in tax revenues may overweight benefits of increased trade either in absolute terms or relative to income redistribution of net gains of increased trade.

Proposed actions for Nairobi

In the spirit of working towards an ‘open declaration’, we should aim to organise two events at the Nairobi WSF.

In the first instance, we plan to to repeat, what we did in Bamako in terms of the participatory session where ideas, issues and mobilisations for public finances were shared to expand and consolidate the current list of points from a) to n) that is in the notes of the Bamako meeting ( nigd/docs/WPFBamakoMattiKohonen ).

This time however we should also attempt to gather the points together and see what type of a coherent platform document we can arrive at and whether we agree on the various points.

The second larger scale plenary session where is for the articulation of key concepts of world public finances and feedback from the public. This will have a significant educative and informative purpose, as many participants would not have yet heard the various analysis of world public finances, or their various proposals for change. Finally, we would also like to encourage different strands of the WPF platform to organise their internal preliminary workshops before the WSF in Nairobi, in addition to some working seminars organised inside the space of the forum.

To concentrate work among the partners, we should also start an edited publication project to collect chapters on world public finances from various contributors and look how different themes are emerging in the understanding of public finances. This would make even further allow the meetings to focus on coming up with a coherent platform, and raise the profile of the platform.