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Covid 19 - increasing global inequality

Tuesday, March 31, 2020

As many of us are adapting to new restrictions on freedom of movement and association, it is clear the Covid 19 pandemic is deeply affecting the way we live our daily lives. The current pandemic has led to huge loss of life and struggling health systems, but also to economic turmoil resulting in job losses, business closures, and capital flight.

These impacts are being felt most deeply by those living on or below the poverty line, and by health workers, activists, refugees, migrant workers and those in the informal economy, amongst others. This highlights not only the deep inequalities in our societies but also the significant inter-connectedness of business and financial systems worldwide, as decisions made in boardrooms on one side of the world lead to suffering elsewhere. We must also acknowledge the pressures that large scale food and commodities production is placing on our environment and the importance of protecting biodiversity, and of mitigating the risks of pandemic zoonoses such as Covid 19 by curbing industrial animal production and commercial wildlife trade.

Further as governments and businesses respond to this pandemic, a combination of emergency measures, political actions, and flagrant opportunism have led in places to human rights violations, the suppression of civic rights and a disregard for social and environmental standards. There is deep concern that this pandemic is being used to justify economic, social and environmental abuses.

What role does the financial sector play?

Following the fall out of the 2007 global financial crisis, it was ordinary tax payers who funded the bail out of the financial sector and who bore the burden of slow economic recovery. It became clear how much damage can be caused by a global financial sector exclusively focused on profits, and allowed to operate unchecked.

The Covid 19 pandemic is causing economic chaos, and much of the pain is being felt by people in middle income countries and developing countries who already face a large debt burden. These countries now face currency speculation and currency depreciation, lower commodity prices, plummeting financial markets and bond sell-offs due to huge financial outflows by foreign investors.

Parts of the financial sector are exacerbating the ongoing economic crisis by speculative trading, betting on changes in the stock market reinforcing market volatility, and by enabling capital flight towards tax havens. This comes on top of the pressures caused by increased unemployment and the loss of livelihoods as a result of the pandemic.

What action do we need?

Fair Finance International urge governments, regulators, financial institutions and businesses to work together for a more just, equal and resilient world, particularly at a time when the Covid 19 pandemic is being used to justify political and business opportunism at the cost of social and environmental responsibility.

  • We call for responsible practices in the financial sector in the face of this crisis, including avoiding speculative currency and commodity trading.
  • We call for coordinated international regulation of the financial sector so that financial institutions and their shareholders cannot profit unfairly as a result of this crisis.
  • We expect the financial sector to take responsibility for social, gender and environmental impacts across their asset and investment portfolios; to cease investments in polluting businesses and companies violating human rights, and to increase financing for clean energy technology, the reduction of GHG emissions, and the protection and regeneration of biodiverse and natural environments.

What are Fair Finance International doing?

As a growing global network operating in Asia, Europe and Latin America we continually investigate, assess, and report on the investment policies and practices of the financial sector; lobbying and campaigning for more responsible, transparent and sustainable practices across financial institutions.

We publish rankings of financial institutions’ sustainable investment policies, investigate cases of harmful investment practices, mobilise public campaigns, and work with financial sector players to ensure responsible standards and practices that do not harm societies.

We believe a crisis can create an opportunity for change. The financial sector can step up and play a responsible role in post-pandemic economic recovery.

  • We will hold all financial sector players to account for their continued environmental and social responsibilities - particularly when some see this crisis as an opportunity to abandon them.
  • We will continue to monitor the actions of banks, pension funds and insurance companies closely, and raise public awareness of the issues.
  • We will advocate for and advise on the responsible and sustainable ways forward.

What can you do?

  • Stay informed and follow Fair Finance International
  • If you live in one of our Fair Finance Guide locations check your local website for ways to tell your bank/pension fund/insurer to operate responsibly so this crisis doesn’t lead to more poverty, greater inequalities, and further environmental destruction. 
  • Help others to do the same by sharing our message on social media. 

 

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