Date: July 13, 2011, 4:16 pm


The Integrated Social Development Centre (ISODEC) has urged the Government of Ghana to join other African leaders to work to ensure that the African Union (AU) demonstrates full support for the Financial Transaction Tax (FTT).

According to the Centre, by this act Ghana will be joining several other campaigners across the globe who are calling for the introduction of the FTT, particularly in the advanced and wealthy nations. In Africa, Ethiopian Prime Minister Meles Zinawe, is among the leading campaigners for the AU to support the global action. Proponents believe that the FTT will create stable global market conditions essential for development of poor countries.

A statement issued in Accra and signed by Bishop Akolgo, Executive Director of ISODEC, to declare its support for the global campaign and also commemorate the day last Wednesday , June 22, which has been set aside as the Global Day of Action for Financial Transaction Taxes, said the tax, if introduced, will finance the fight against poverty and Climate Change.

ISODEC said the frequent activities and transactions of market speculators are major source of instability for global markets and economies, adding that "clearly such activities of market speculators are in the interest of only a few whilst the poor everywhere in the world and developing countries remains perpetual loser in this unsolicited financial gamble."

"Rather than investing in the real economy, banks have been putting resources into speculative bubbles, including food and energy. This can produce high profits for speculators in the short term, but a very grave hunger situation as well."

This situation, it said, provides some reason why the gap between the rich and the poor; and the developed and developing countries keeps widening.

ISODEC expressed concern that whilst these activities flourished there is little international awareness about its consequences.

"To eradicate these practices all must join hands for the eradication of this financial monster," it added.

ISODEC commended former Brazilian President, Lula Da Silva, the 28 low-income Francophone countries who have endorsed the FTT and the 1000 economists led by Jeffrey Sachs and Joseph Stigliz who wrote to the G20, indicating their support for the FTT and also hoping that, the European Union , the British and America Governments will soon demonstrate similar support.

A number of European countries, including the French, German and Austrian governments, have already endorsed the FTT.

The FTT also called the Tax on Speculation or Red Hot Chilli Tax, according to campaigners, is not a taxing of the financial transaction themselves. Instead, it is charged only on the specific transactions that are designated as taxable. It is a tool to selectively discourage excessive speculation without discouraging any other activity.

After the European Parliament voted in its favour on 8 June, more than 1000 Socialist and Social Democratic Members of National Parliaments signed a letter to show their commitment.

They explained that in Europe such a tax would generate an income of 200 billion euro per year. "In even more practical terms, this would mean the creation of 2 to 3 million new European jobs in one year."

Last Wednesday, the Party of European Socialists (PES) joined a European Action Day for a "Red Hot Chilli Tax" organised by the Belgian Socialist Party (PS). The demonstration took place in the morning next to the European Parliament. The Action called for the implementation of a tax on speculation before the Member States' heads of state and governments gather in Brussels on 23-24 June.

As with the Red Chilli, the tax on speculation is small but spicy, and a small quantity. The PES says a tax rate of 0, 05% is enough to add real flavour to the economy.

A recent study in the UK showed how a 0.005% tax to the foreign exchange market could raise around £17.6 billion worldwide in new taxes --£7.7 billion in the UK alone. To campaigners this would be new money that could go to go to fund UK poverty reduction, international development and climate change mitigation.

The campaign is being led by a coalition of organisations, charities, trade unions, celebrities and politicians including Action Aid, Oxfam, CWU, Comic Relief, Friends of the Earth.

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