STWR - Share The World's Resources

The NEF makes the case that the noble goal of bringing finance back into line with the objectives of ensuring basic human rights, national development and environmental sustainability is being undermined by the hollow principles of maintaining open markets, unrestrained foreign direct investment, and the ignoring of ecological debt.

Deborah Doane et al, New Economics Foundation, March 2002

Link to the full report

Extract from the report summary:

Chasing Shadows starts from the premise that finance is not about money. It is about the relationships between people, states, markets and the natural environment. It is also a tool to achieve the undamental goals of human fulfilment, dignity and quality of life that ie behind the notion of economic development.

Somewhere, however, this simple idea has become corrupted. Finance as been transformed from the means to an end, to an end in itself. Vast sums of money now circulate the globe without ever touching the round or being harnessed for productive purposes.While millions throughout the world cannot meet their basic needs, the financial resources which could allow them to fulfil these needs dance ephemerally, weaving an arcane path through the intricacies of global hedge funds, capital markets and off-shore bank accounts.

At the same time, nations desperate to create a stable economic climate for their citizens are dictated by unelected, unaccountable agencies. They are told to borrow money to buy another countries’ goods, and then to pay it all back with interest. When this strategy fails, the agencies step in again and order the country to downsize public spending; routing financial resources away from the communities where it is most needed. To complete matters, the soil, atmosphere, marine life, forests and fauna – the living capital of a nation that allows its people to live, eat and breath – are being steadily drained from the debtors by their creditors. Never before has there been so much finance, and so little human development.

Looked at afresh, the absurdity of this situation becomes clear. Yet the business leaders, economists and political leaders that drive this upside-down notion of development refuse to admit that the game is up. Like the Wizard of Oz, the magnificent world they have built around themselves is a sham; based on little more than smoke, mirrors and shadows generated by a complex machine that is under increasing strain to make it all work. The situation would be almost comical, if it didn’t have such serious consequences for the future security of humanity.

This is the tragedy of the United Nations Financing for Development initiative. In the uncertain political climate post-September 11th, what could and should have been a real opportunity for a new vision of global security – one in which finance and markets are once again subordinated to the people they theoretically serve – has been lost. As with so many attempts before it, the noble goal of bringing finance back into line with the objectives of ensuring basic human rights, national development and environmental sustainability is being undermined by the same hollow principles of maintaining open markets, drawing in unrestrained foreign direct investment and ignoring ecological debt. Like children chasing shadows, the world’s leaders are bent on the reckless pursuit of ideologies that lack substance in the real world.

However, there is the potential to realise an alternative vision. In thisreport, the New Economics Foundation maps out some of the key features of a world in which there would be real finance for development.

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