3 Questions to Najat Vallaud-Belkacem, ONE France Director

3 questions to Najat Vallaud-Belkacem, ONE France Director

Written interview received on May 26, 2023.

Focus 2030: ONE, the NGO you lead in France, dedicated to the fight against extreme poverty, global inequality, and preventable diseases, recently launched a campaign entitled "It’s time to redefine the rules", to call on political leaders around the world to push for a reform of the international financial architecture, to provide financial support to the most vulnerable countries. Could you tell us what such a redefinition of the rules of the game would consist of ?

Najat Vallaud-Belkacem: Our current financial system is rooted in centuries of inequality and injustice, still prevalent today in international trade and in our global governance. Over the past three years, these inequalities have become particularly acute: Covid-19, inflation and the worsening effects of climate change have deepened extreme poverty, food insecurity and dependency - in places where we had hoped to reduce them. Poor countries, particularly those on the African continent, are now facing the full force of crises for which they are not responsible, yet they do not have the same tools or resources at their disposal as we do to deal with them. At ONE, we believe that we need to redefine the rules of the game.

A reform should first and foremost include greater representation of African countries, moving beyond a simple consultative role, in all the decision-making bodies, starting with - but not limited to - the G20. With a population of 84 million, Germany has more voting rights at the IMF than the 54 African countries combined, representing 1.4 billion people. How can we build a balanced relationship with African countries if this situation of under-representation persists?

The same applies to the climate injustice affecting the Global South. While Africa accounts for less than 4 % of global CO2 emissions, it is home to the world’s 10 countries most vulnerable to climate change. It should therefore be incumbent on the rich countries, which are also the main polluters, to acknowledge their responsibility by financially supporting low-income countries. To this end, we support the introduction of new sources of innovative financing, such as an international financial transactions tax (FTT), which would provide new opportunities for African countries to adapt and invest in green technologies. Such a tax could also be used as a means of getting those who are currently insufficiently involved in international solidarity to contribute, in particular the financial markets which, unlike poor countries, are nowhere near feeling the effects of these crises.

Together with these innovative solutions, we are also calling for a reform of existing institutions. Multilateral development banks were created decades ago to lend money to developing countries, but they are now trying to solve modern problems with tools and rules dating back to the 1940s. The World Bank, for example, is under-used and needs to be rethought. Redefining the rules of the game also means modernizing multilateral development banks and freeing up over $1,000 billion to help poor countries tackle climate change and extreme poverty.

These are the orientations we are defending, particularly at the Summit for a New Global Financing Pact with the Global South taking place on June 22 and 23 in Paris. From our point of view, a "new financial pact" implies three commitments:

• More financial support, by identifying new sources of financing but also by delivering on past commitments.
• Building a fairer, more resilient system, starting by modernizing existing organizations.
• And finally, give more power to the countries concerned, by ensuring that they are systematically present at the negotiating table.

Focus 2030 : How can citizens join you in mobilizing for the Summit for a New Global Financing Pact? How can the mobilization of civil society make a difference in this kind of international negotiations?

Najat Vallaud-Belkacem: Business as usual has proven ineffective, and inequalities are on the rise. A radical departure from the usual G7, G20 and COP meetings is therefore welcome, and could be a turning point in the fight against climate change and poverty, but only if our leaders really take the issues at stake seriously. To this end, citizens will be called upon to remind governments of their responsibilities. African activists such as the ecofeminist Adenike Oladosu, who founded the "Fridays for Future" movement in Nigeria, will be coming to Paris for the Summit. Their testimonies will be crucial in shaking things up.

Focus 2030: Among the solutions put forward at the Summit for a New Global Financing Pact to finance the fight against climate change and global poverty, many stakeholders, including ONE, are calling for the introduction of taxes on activities benefiting from globalization. Some countries, such as France, have already introduced a tax on financial transactions. Could the summit enable such a measure to be replicated at European, or even international, level ?

Najat Vallaud-Belkacem: An ambitious agreement on a global tax on financial transactions could be a major breakthrough at the summit and is already on the negotiating table. Moreover, it is not essential for all countries to reach an agreement. All it would take is for a group of like-minded countries to decide to move forward on the subject, agreeing on the parameters of such a tax and committing to implement it at national level, and then allocating the proceeds to the fights against extreme poverty and climate change.

Different modalities of financial transaction taxes already exist in over 30 countries around the world, including France, Italy, Spain, Switzerland, Hong Kong, the UK... Clearly, such taxes have not prevented the development of some of the world’s most important financial centers! French economist Gunther Capelle-Blancard recently published a study on the potential revenues of an FTT applied internationally. He demonstrates that a tax like the French FTT or the British Stamp Duty, applied to G20 countries, would raise between €156 and €260 billion a year. The analysis also reveals that these revenues could rise to almost €400 billion a year by extending this international FTT to intraday transactions and high-frequency trading. These amounts are staggering. Given the challenges we face, there is no reason to deprive ourselves of such a financial windfall any longer.