Madam Speaker, I am very pleased to take part in this debate, which I feel is an important one, in light of my personal values.
First, I want to congratulate the hon. member for Regina—Qu'Appelle for tabling Motion M-239, which reads as follows:
That, in the opinion of this House, the government should show leadership and enact a tax on financial transactions in concert with the international community.
An amendment to this motion has already been proposed by the hon. member for Repentigny and reads as follows:
That the motion be amended by removing the words “enact a tax on financial transactions” and replacing them with the following:
“promote the implementation of a tax aimed at discouraging speculation on fluctuations in the exchange rate.”
I hope the majority of our colleagues in this House will support the amendment as well as the main motion. The hon. member for Regina—Qu'Appelle is to be commended for putting forward this motion, which parallels the current debate surrounding the issue of globalization. This is a good example of globalization and how the world has shrunk, given that, with the extremely sophisticated technology available today, financial transactions can be performed 24 hours a day, seven days a week, and have a major impact on economies worldwide.
This has been done extensively, and it makes this motion today, the Tobin tax, all the more interesting in light of recent developments.
In a word, as we know, the purpose of this tax would be to levy a very small amount—one tenth of one percent—on international currency transactions around the world. It is estimated that such transactions total, and that is where it becomes interesting, between $1,500 and $2,000 billion a day. It is hard to imagine what $1,000 billion a day represents. That is order of magnitude we are talking about here. At the end of a year, given a rate of one tenth of one percent, $150 or $175 billion would have been raised and managed, as a world fund, by the UN or another organization designated by the international community for this purpose. As a result, and this is very important, wealth would be better distributed.
It would act as a mechanism to curb rash exchange speculation on the currencies of countries, sometimes the most vulnerable countries. We would kill two birds with one stone with this world fund, which could be used effectively to fight poverty worldwide.
And better distribution of wealth would be achieved. This would have the effect of counteracting the negative effects of globalization and slowing down the progress of the unbridled neo-liberalism which has reigned for far too many years already.
We have seen the way these faceless speculators, with no sense of social responsibility, no accounting to anyone, whose job it is to type away on computer keyboards everywhere on this planet, checking out interests rates that are too low, fostering their own clients' interests, thumb their noses at community or national interests.
When we refer to national interests, we are not referring to some vague concept. We are referring to what has happened in recent years, first of all in Asia, in Japan, Malaysia, Korea, Indonesia. All of Russia has been through it since the wall came down, and now has become a haven for all manner of crooks and criminals. Things seem to be out of control. A few years ago Mexico too was experiencing some very hard times, as Brazil recently did.
A full-scale attack is launched on certain economies—often developed ones such as Japan but sometimes still fragile, such as Indonesia perhaps—so that these economies must suddenly face some devastating times. This may be seen in the document I am going to read. This has devastating effects on economies and on the individuals in them.
Fortunately, an awareness is developing internationally. I would like to take the opportunity to thank Charles F. Johnston of 5th Avenue North in Saskatoon for alerting me to the debate and inviting me to take part. He summarizes very well the problem with the Tobin tax: “A tax like this not only would impose a number of constraints on short term speculation, but it would generate a fund destined to support economic growth and restore social programs throughout the world”.
Mr. Johnston is one example of the awareness that is developing, especially in France. That is not new. We all know about the acuity of the French on social issues. They have always been in the forefront. They are there thanks to a publication you are no doubt familiar with, Madam Speaker, Le Monde Diplomatique , which, in January of this year, published a ground-breaking article on the question, entitled “For the reconstruction of the international financial system: at the root of the evil”. The root of the evil for Le Monde Diplomatique is the processing of financial transactions, including those involving currency and rates of exchange.
I will quickly read several quotes: “So, since the crash in the winter of 1994-95, half of the population of Mexico has fallen below the poverty line. Malnutrition and famine are again raging in Indonesia. In Russia, ten years of economic liberalism have done more to tarnish the reputation of capitalism than 70 years of propaganda on the “real” socialism. Average life expectancy for men has dropped by seven years, unprecedented in the 20th century. In Korea and Thailand, IMF suicides continue. Workers who have been laid off and are without resources kill their wives and children because they are unable to provide for them.”
I will read another excerpt from this excellent article: “The top 20% of humanity consumes 86% of the wealth, while the bottom 20% is left with 1.3%. The fact is, and we hear it often enough, that the gap is widening yearly at the same time as official development assistance is declining. It is the debt that is the worst threat to the future of the south, particularly the future of less developed countries that are in the process of almost disappearing off the face of the earth because of debt that they are unable to repay now and will never be able to repay in the future.
The less developed countries are spending an average of over 20% of their export revenues on servicing this debt. If this were lowered to 1% or 2%, as it was for Germany after the war, these countries could invest the money saved in health, education, and the environment, thus generating a virtuous circle. The more a country could invest in human capital and sustainable development, the more it could reduce its debt, to the point of eliminating it entirely.”
This is what would be done with the international fund resulting from the Tobin tax on international currency transactions.
Still in France, I would like to mention the Association pour la taxation des transactions financières pour l'aide aux citoyens.
The purpose of this association is to denounce financial globalization, which adds to economic insecurity and social inequality by circumventing and limiting the choices open to nations, democratic institutions and sovereign states responsible for the general good. The association wishes to show that it is necessary and possible, contrary to popular opinion, for people to put the public interest ahead of the interests of financial markets and transnational corporations. This Paris-based association also has a Web site. I urge everyone to contact it.