We extend our warmest congratulations to the
Ambassador from Qatar, Mr. Nassir Abdulaziz
Al-Nasser, on his recent election as President of the
General Assembly at its sixty-sixth session. We
welcome his intention to use this session to address
pressing issues such as mediation and conflict
resolution, the reform of the United Nations system,
preventing and responding to natural disasters and
sustainable development for global prosperity.
Ten years ago, the dynamic and vibrant city of
New York was shocked by something previously
inconceivable: the terrorist attacks on the Twin Towers.
Thousands of innocent people died in horrific ways,
leaving relatives and friends in a state of helplessness
and sorrow. Echoes of that terror reverberated around
the planet, leaving scars and a trail of pain to this day.
The world has not been the same since then.
In the interest of security, even in strong
democracies where genuine rule of law prevails, some
individual liberties, previously considered sacred and
immutable, have been sacrificed. While the ashes were
still smouldering and the rubble of the Twin Towers
still lay where it fell, the war in Afghanistan was
launched, which, although perhaps justified as a case
of legitimate defence, has nevertheless produced more
victims than the terrorist attacks themselves. Then
came the occupation of Iraq, which spurred
controversy in various circles of international public
opinion but in any case certainly generated more
violence, produced new victims and new waves of
human suffering and caused more destruction of
wealth.
The lesson to be learned from these past 10 years
is that there must be a collective effort to eliminate
terrorism as an inhuman practice, to eliminate as well
the economic, social, political, cultural, ideological and
religious factors that fuel it, and to promote a world
that is more open, more tolerant, more respectful and
more willing to engage in dialogue and in the
recognition of human dignity.
Another event that has shaken the world during
the past decade has been the global financial crisis,
produced by a lack of clear rules in the international
financial system, as well as by arrogance, greed and the
unquenchable thirst for wealth. That crisis has gone
through several stages, but at this moment what is most
worrisome is that it has caused a division among the
most influential and powerful political and economic
sectors in the world over strategies to fix it. While
some think that what is needed at this time is public-
spending stimulus policies to promote economic
growth and job creation, others emphasize reducing
fiscal deficits and paying off sovereign debt.
How can international capital markets now
demand that Governments pay a debt that was created,
to a large extent, to save financial institutions from
going under in the first place? Although incongruous,
11 11-50871
that is exactly what is taking place. Markets are
currently putting pressure on States to pay sovereign
debts that were themselves essentially the result of
earlier initiatives by States to rescue banks that were
either at risk or on the brink of bankruptcy.
In order to avoid having to stop payments or
defaulting and watching their economies crumble
further, Governments have had to give in to the
pressure of the markets by implementing severe
austerity measures. Those policies have significantly
decreased citizens’ quality of life, leading to social
unrest and protest movements that erode Governments’
legitimacy and support base. Although it might seem
paradoxical, in some developed countries loss of
popular support has caused Governments to fall,
which, in echoes of coups d’état, have led to a new
political phenomenon that might be called, for lack of a
better word, market “coups”.
What is strange about this situation is that what
we need is resources to save the international financial
system, stabilize the world economy and return us to
our earlier levels of economic growth and prosperity —
and those resources are at hand. For example, it is
known that even though $4 trillion circulate every day
around the world in the form of financial transactions
in capital markets, no taxes are in place that would
increase States’ fiscal resources.
How much would Governments collect through a
5 per cent tax on the $4 trillion circulating daily around
the world? That would represent $20 billion per day,
which, multiplied by five business days a week, would
come to a total of $100 billion. If, in turn, we multiply
that number by four weeks a month we would have
monthly income of $400 billion. And those $400 billion
monthly, multiplied by 12 months in a year, amount to
an astronomical $4.8 trillion. That amount would not
only resolve the problems of some countries’ sovereign
debt but there would be enough fresh resources for
investing, which would allow a rapid recovery from the
current financial and economic world crisis.
Nonetheless, were we to conclude that this was
not an appropriate way for States to raise revenue,
what about the more than 10 trillion dollars deposited
in tax havens, according to reports by international
advisory institutions?
As we know, not a cent from those deposits,
which increase by more than 600 billion dollars every
year, reaches the tax services of any Government.
In the meantime, through our failure to tax
international financial transactions and the deposits
made in tax havens, the global financial and economic
crisis continues, citizens become indignant as they see
their standard of living erode, social demonstrations
multiply, Governments are threatened by the lack of
governance, chaos takes over societies, and uncertainty
expands everywhere.
In sum, we are forced to accept increasingly
alarming levels of social injustice because of the
undeniable and uncontrollable power held by a circle
of the world’s economic elite.
Despite the wide range of global problems before
us, I wish to address just one of them: financial
speculation on the price of food and oil. The
Dominican Republic will submit a draft resolution on
the subject to this Assembly General.
Since 2005 there has been a steady increase in the
prices of food and oil, along with that of petroleum
by-products.
From 2006 to 2008, the price of soya beans has
increased 107 per cent; the price of corn, 125 per cent;
rice, 127 per cent; and wheat, 136 per cent.
According to the Food and Agriculture
Organization of the United Nations (FAO), as a result
of those price increases, 150 million people joined
those around the world who already literally go hungry.
As a result, for the first time in the history of
humankind, the total number of people who lack access
to food surpassed 1 billion, which represents almost a
sixth of the world population.
With the recession that took place during the
second half of 2008, food prices went down, and it was
thought that we would return to a situation of
accessible food prices and overall increased stability.
However, with the slight upturn and reactivation
of the world economy in 2010, prices went up again,
and this year the ravages of inflation have been felt
once again in different parts of the world.
The same has happened with the price of oil.
After falling to $12 a barrel in 1998, ten years later, in
July 2008, two months before the bankruptcy of
Lehman Brothers, it was priced at $147 a barrel.
11-50871 12
Paradoxically, at the end of 2008, oil prices had
dropped so precipitously that the new price on the
international market was $37 a barrel.
Who could possibly explain something as absurd
as a price drop from $147 to $37 a barrel in just four
months?
It has been argued that, with regard to both food
and oil, those exorbitant price increases can be
explained by the growth of the world population, an
increase in demand from emerging economies,
especially China and India, the effects of climate
change, and geo-political tensions in regions of the
world affected by conflict.
There can be no doubt that some of those factors
have influenced prices to some extent, but there has
also been a clear effort to downplay the importance of
a new element in international markets: financial
speculation in commodity futures.
According to well-known international analysts,
30 to 40 per cent of the price increases for
commodities or basic products can be ascribed to the
impact or influence of financial speculation on futures
contracts.
In light of that situation, which has a daily impact
on our food- and oil-importing people, the Dominican
Republic has weighed the need to propose regulatory
measures of international scope in order to guarantee
market transparency and price stability.
To that end, it is essential to limit the volume of
transactions that may be executed by such futures
market participants as insurance companies, investment
banks, pension funds and equity funds, among others,
which play no direct part in the physical production of
the product.
Likewise, deposits on futures contracts should be
raised, as a way to discourage speculative transactions
that only contribute to price volatility and create
uncertainty and a lack of market predictability.
We believe that by adopting such a resolution we
will take an important step towards solving a serious
problem that has condemned a large part of humankind
to hunger and destitution.
In sum, the objective of this initiative is simple,
just, and of far-reaching importance, namely, to
persuade the Assembly General of the United Nations
to declare, for the sake of the human race, that food
cannot be considered a financial asset.
Food must be used only to guarantee the survival
of the human race on the face of the Earth.