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Tag Archives: World Economic Forum

To be rich is indeed glorious…

tony-abbott-and-xi-jiinping And there we have it – a snapshot of our Prime Minister from his own lips.

“TONY Abbott has described his visit to China as the most important ever undertaken by an Australian leader and has congratulated the Communist country for its pursuit of wealth.”

As Abbott echoed Deng Xiaoping’s advice that “to get rich is glorious”, 700 Australian businessmen are about to sit down with their Chinese counterparts to determine just how glorious they can be. They won’t be discussing climate change or pollution. They won’t be discussing human rights abuses or health. And they most definitely will not be discussing those inglorious poor.

Pope Francis may have a different idea of glory. He recently warned that the existing financial system that fuels the unequal distribution of wealth and violence must be changed, and he begged the Lord to “grant us more politicians who are genuinely disturbed by the state of society, the people, the lives of the poor.”

“How can it be that it is not a news item when an elderly homeless person dies of exposure, but it is news when the stock market loses two points?” Pope Francis asked an audience at the Vatican.

In an apostolic exhortation he wrote:

“As long as the problems of the poor are not radically resolved by rejecting the absolute autonomy of markets and financial speculation, and by attacking the structural causes of inequality, no solution will be found for the world’s problems or, for that matter, to any problems.

A new tyranny is thus born, invisible and often virtual, which unilaterally and relentlessly imposes its own laws and rules. To all this we can add widespread corruption and self-serving tax evasion, which has taken on worldwide dimensions. The thirst for power and possessions knows no limits”

He goes on to explain that in this system, which tends to devour everything which stands in the way of increased profits, whatever is fragile, like the environment, is defenseless before the interests of a deified market, which has become the only rule we live by.

“Just as the commandment ‘Thou shalt not kill’ sets a clear limit in order to safeguard the value of human life, today we also have to say ‘thou shalt not’ to an economy of exclusion and inequality. Such an economy kills,”

The World Economic Forum in Davos identified the large and growing income gap between rich and poor as the biggest risk to the global community in the next decade. The WEF said its annual survey of 700 opinion formers had identified the income gap, extreme weather events and unemployment or underemployment as the three threats most likely to cause major cross-border damage in the next 10 years.

Jonathan D. Ostry, the I.M.F.’s deputy head of research, and Andrew Berg, another economist at the fund, published a study three years ago suggesting that inequality makes growth less durable. A flatter distribution of income, the study concluded, contributes more to sustainable economic growth than the quality of a country’s political institutions, its foreign debt and openness to trade, its foreign investment and whether its exchange rate is competitive.

Economic policy cannot be only about promoting low inflation and robust growth. Healthy, stable economies also depend on a reasonably equitable distribution of the rewards.

Hugh Evans, the Australian founder and chief executive of The Global Poverty Project (GPP), told an audience at the International Monetary Fund-World Bank Spring Meetings on Thursday that Tony Abbott “broke his promise” after his election victory.

“He slashed the foreign aid budget dramatically which will have far-reaching consequences for the world’s poor,” Evans, standing before World Bank President Jim Yong Kim and United Nations Secretary General Ban Ki-moon, told the audience. “We don’t want this single act of political indecency to undo the great work Australia has done to help end extreme poverty.”

Meanwhile, Joe Hockey criticised delays in implementing changes agreed by the Group of 20 bloc of advanced and developing nations in 2010, which he said were letting down the international community and were entirely the fault of the U.S. Congress.

“I am deeply disappointed that the IMF quota and governance reforms that the G20 agreed to in 2010 have still not been implemented and that the path forward for ratification is now highly uncertain,” he said at an event organized by Johns Hopkins University.

“The failure to finalize this issue diminishes America’s global standing instead of enhancing it.”

I wonder how that compares to Abbott’s refusal to support the green climate fund supported by the United Nations. In the Commonwealth Heads of Government Meeting in Sri Lanka, Australia joined with Canada in snubbing the green climate fund. Mr Abbott called it the “green capital fund” while calling the profitable Clean Energy Finance Corp. the “Bob Brown Bank” after the former head of the Australian Greens.

The government of a democracy is accountable to the people. It must fulfil its end of the social contract. And, in a practical sense, government must be accountable because of the severe consequences that may result from its failure. As the outcomes of fighting unjust wars and inadequately responding to critical threats such as global warming illustrate, great power implies great responsibility.

Government economic responsibility is linked to protection from the negative consequences of free markets. The government must defend us against unscrupulous merchants and employers, and the extreme class structure that results from their exploitation.

Governments argue that people need to be assisted with the economic competition that now dominates the world. But the real intent of this position is to justify helping corporate interests, siding against local workers, consumers and the environment.

This government has tossed out its job description and is on a corporate crusade. They are capitalist fundamentalists who believe all things public are bad and all things private are good, and they are determined to use their time in power to sell off Australia and to further the interests of their wealthy donors.

According to Tony Abbot’s description, Gina Rinehart must be the most glorious person in Australia – although I think she lives in Singapore? For me, the glorious people are those that care for others – the carers, nurses, social workers, teachers, paramedics, firemen, charities, volunteers, environmentalists, animal protection activists. Our scientists are glorious with their amazing research into a sustainable, healthy future, as are our artists and musicians who speak to our senses and our souls.

I used to think Australians were a pretty glorious race in general. Now I am not so sure.


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A different drummer

Photo: ABC Net

Photo: ABC Net

In the lead-up to the 2013 election, I don’t know how many times I cringed at the thought of Tony Abbott as President of the G20, and now he is there and it is even worse than I anticipated.

The ceremonies at the World Economic Forum in Switzerland opened with words sent by Pope Francis where he implored the elite in business and politics to exert their influence to reform economic policy with the poor and disadvantaged in mind.

“Those who have demonstrated their ability to be innovative and improve the lives of many people by their ingenuity and professional expertise can further contribute by putting their skills at the service of those who are living in dire poverty.”

In the Davos message he referred to his treatise Evangelii Gaudium, where he said the challenge of the world today is economics and inequality. In an era of considerable change and progress in areas like technology he said, “We must praise the steps being taken to improve people’s welfare in areas such as health care, education and communications.”

An annual risk report compiled by the World Economic Forum queried its members about what they think is the most pressing problem threatening the global economy in the next decade. They responded with inequality as the most likely risk.

The creator of the Davos Summit, Klaus Schwab, was pleased with the inequality finding because his philosophy is that capitalism cannot survive if income and wealth are concentrated in the control of a few, which is confirmed by the US Census Bureau statistics.

Oxfam executive director Winnie Byanyima, who will attend the Davos meetings, said: “It is staggering that in the 21st century, half of the world’s population — that’s three and a half billion people — own no more than a tiny elite (85 individuals).” The wealth of the 1 percent richest people in the world is 65 times as much as the poorest half of the world.

These fears are palpable and the concentration of economic resources is threatening political stability and driving social tensions and unrest globally. The pope’s message echoes concerns by others as well.

Christine Lagarde, managing director of the International Monetary Fund, is concerned that the fruits of economic activity in many countries are not being widely shared. Likewise, the humanitarian organization CARE says inequality around the world centres on lack of access to education, public health, chronic diseases, income gaps, and social inequalities such as gender discrimination.

A World Economic Forum report says the failure to mitigate and adapt to climate change is one of the top 10 risks facing the world in 2014.

Scientists say man-made climate change is likely to worsen starvation, poverty, lack of water, flooding, heat waves, droughts and diseases, raising the specter of more conflict and war, unless drastic action is taken to lower emissions of carbon dioxide from the burning of coal, oil and gas from their current trajectories

The global economy may continue to grow, scientists say, but if the global temperature reaches about 3 degrees F warmer than now, it could lead to worldwide economic losses between 0.2 and 2.0 percent of income.

Lord Stern, former World Bank chief economist and author of the key 2006 Stern review on the economics of climate change, also warned that scientific projections and economic predictions were underestimating the risks of global warming. He will be addressing the meeting this year and speak on topics related to the economics of climate change.

Saadia Zahidi, Head of Gender Parity and Human Capital at the WEF said:

“This year is very relevant because we have collaboration with the United Nations Secretary General and the UNFCC, to try to build up towards the UN Climate Change Summit in September and use Davos to try to spark off a very large number of public-private collaborations. That’s going to be happen through approximately 35 climate change and sustainability sessions. We’re going to be looking at themes as diverse as scaling energy efficiency, reducing deforestation, looking at resilient cities and scaling investment for green energy.”

Al Gore spoke at a private session on how leaders can help prevent – and better communicate – catastrophic effects on public health, anti-poverty efforts, clean water and energy supplies from a rise in global temperatures above 4 degrees F.

“The climate conversation has to be won by those who are willing to speak up,” Gore told them. “It is a race against time, but we are going to win.”

The World Wildlife Fund joined many other groups calling on governments to commit to action.

“There’s a rising recognition that we simply have to find a way to break through,” Jim Leape, director general of Geneva-based WWF International, told AP. “The big governments each need to renew their commitment.”

South Korea’s President Park Geun-hye told the forum “the world must act as one” to tackle climate and environmental challenges.

The meeting was dominated last year by the Euro-crisis, but this year Schwab says will be different. “It will be an exciting meeting and it will be different from the last year’s because it will not be overshadowed by one single crisis.”

There will be a number of topics addressed including social inclusion and job creation. He did not elaborate on “social inclusion,” but this could suggest the social and economic inequality the members believe is a global concern.

Other topics are the war in Syria, structural changes in China’s economy, building resistance to natural disasters.

“What we want to do in Davos this year in this respect, is to push the reset button. Let me explain. The world is much too much still caught in a crisis management mode, and we forget that we should take ‘now’ into our hands and we should look for solutions to the really fundamental issues. We should look at our future in a much more constructive, in a much more strategic way. And that’s what Davos is about.”

Tony Abbott has used his opening address to the G20 Economic Forum in Switzerland to advertise that Australia is “open for business”, a line he apparently stole from David Cameron. He has stressed that the private sector should lead the way to prosperity while governments clear the path by removing regulations and lowering taxation. In fact, his speech was almost exactly the same as his election speeches, even to the point of criticising our previous government, something usually avoided on the international stage.

Abbott has had meetings with Australian big business people, who presumably accompanied him, and avoided any discussion of ‘unpleasantness’ like Syria or whales. He has stressed that the focus for the G20 under his presidency will be how governments can facilitate big business and free trade.

It was interesting to read a tweet by Chris Giles, Economics Editor for the Financial Times UK, who said

“Sign of the times. Rouhani packed out the hall. everyone is leaving before Tony Abbott explains Australia’s ambitions for the G20 in 2014″

So why the walkout? Were they not interested in our fearless leader’s economic guidance? Or is his agenda so far removed from the rest of the world that they just couldn’t be bothered wasting their time.

I think our Tony may be feeling a little out of his depth and somewhat alone, or he is purposely marching to the beat of a different drummer.

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