03/01/19

PAPER: What to do with 1 trillion dollars

Every year, governments are diverting $1 trillion dollars away from people and public services into the hands of big companies. The report 'Changing track: putting people before corporations" by Health Poverty Action, the People's Health Movement and Viva Salud outlines why we need to put people before corporations.
$1 trillion could quadruple the money spent on healthcare for half the world’s population

Read the paper

Research by Mark Curtis, Curtis Research
Written by Natalie Sharples, Health Poverty Action

Summary

Whatever our differences, as human beings we all want the same things – a decent roof over our heads, a warm bed, healthy food to nourish us and access to health services when we need them. Having our basic needs met gives us the freedom to achieve our potential, to live and love, protected in our families and communities. We all have the right to these things, whoever we are, and wherever in the world we live. They are our human rights.

But governments across the world are denying people these rights. Across sub-Saharan Africa just under half of all women have no access to adequate antenatal care. In the UK, four million people have difficulty feeding their familiesii and one in every two-hundred people are homeless.

Ten years on from the global financial crises, which exposed the dramatic failures of neoliberal policies governments are still choosing to put companies above people and public services.[1] New research for this briefing shows that governments are enabling the diversion of over $1 trillion (or a million million) worth of resources each year. This includes:

  • money that governments are giving away to companies – through subsidies to banks, fossil fuel and agriculture companies, tax breaks and reductions in the rate of company tax leading to excessive company profits;
  • money governments allow companies to take by enabling tax dodging.

Where the $1 trillion comes from:

In the UK one in four low-income households are struggling to put food on the table. But in 2012-13, the British government handed out $93 billion, the equivalent of £3,500 to every British household to British companies in grants, subsidies and tax breaks.
Half the world lacks access to essential health services, the largest proportion of these people live in sub-Saharan Africa. At the same time companies (often from outside the continent) are being allowed to take an estimated $35 billion in tax revenue from citizens in Africa each year.

This diversion of resources is a key factor contributing to the violation of the rights of people across the world. $1 trillion is equivalent to funding the whole British national health system six times over or quadrupling the money spent on healthcare for half the world’s population.

This is also about more than money. Our natural world provides the basis for health and lives. To be healthy, we need to breathe clean air, drink clean water, and have fertile land to feed our families. Corporate threats to our natural world are putting us all at risk. Governments are allowing companies to pollute our rivers and oceans, cause climate breakdown and engage in illegal logging and fishing. Companies are being enabled to profit from the global commons – our shared natural world – whilst causing its destruction.

This is global

Human rights violations do not respect national borders. People are denied rights in all countries in the world, with people in Africa and Asia often facing the greatest denials of their rights on the largest scale. At the same time governments in Europe and North America can be said to bear the largest responsibility for this. They allow their companies to dodge taxes owed in some of the world poorest countries, give unfair subsidies to companies and are among the largest contributors to climate change.

Over the last forty years many the neoliberal policy choices pursued by many government included privatising key industries, reducing spending on public services and liberalising trade. They reduced regulations for companies and prioritized corporate profit, often arguing that it would ‘trickle down’ to benefit everyone.[2] Yet as the extent of global poverty and inequality today shows - a world where the eight richest men own as much as half the world's population - it hasn't.

The Alternatives

It need not be this way. Poverty and poor health are created by a series of choices made by those in power, who determine who and what they prioritise.

$1 trillion could:

  • Quadruple the money spent on healthcare for half the world’s population [3]
  • Fund the UK health system six times over [4]
  • Provide a seven-fold increase in the global ‘aid’ budget [5]
  • Give a social safety net for 700 million people in 57 lower income countries* (*6 times over) [6]
  • Triple annual global investment in renewable energy [7]
  • Cancel all government debt of impoverished countries [8]

By demanding different choices, we can take steps to end poverty, protect our natural world and enable people everywhere to live healthy and fulfilling lives. We need to demand that governments and international institutions fundamentally change the goals of our economy towards fulfilling human rights, enriching lives and protecting our shared home. They must:

  • Redefine their priorities: focus on what matters – health and wellbeing, rather than a narrow obsession with economic growth.
  • Repair the damage: stop companies violating human rights.
  • Redistribute wealth: enable citizens to claim their wealth, rather than channel it to companies.
  • Realise human rights: fulfilling the new agenda would help realise the economic and social rights of everyone in the world.

 

Read the paper

 

References

1 Our broad understanding of a ‘company’ or ‘big company’ is a company with a minimum of 250 employees. (More information here)

2 TNCs employ many millions of peopleand therefore benefit from their employment. However, while ‘ordinary people’ benefit in terms of employment, they do not in terms of TNCs tax dodging andmaking excessive profits. These are likely to benefit the already rich.

3 Based on Health Poverty Action calculations using World Bank data. The global population is 7.53 billion. Half of this is 3.765 billion people. To ascertain this statistic we ranked low and middle income countries by GDP per capita (current US$) and calculated total health spending by each country using the population data and current health expenditure per capita (current US$) in 2015, the last available year for healthcare spending per capita data. The total spending on health care for 3.7 billion people in the poorest 96 countries for which there is health care spending data is $326.9 billion. (This data excludes Libya, Somalia, Palestine, Kosovo, North Korea, Eritrea and Syria as there is no healthcare and/or GDP data.) The total diversion of resources is 3.2 times greater than this amount.

4 The cost of running the NHS in England in 2017-18 was £124.7 billion ($165.4 billion). This means that the total diversion of resources would fund the equivalent of 6.32 NHS.

5 The OECD 2017 figures global aid totalled $146.6 billion. The total diversion of resources is 7.14 times this amount. This does not include China or other non-OECD aid donors, but does include refugee costs spent within donor countries.

6 The International Labour Organisation state that we could provide social protection floors for 57 lower income countries for the cost of 0.23% of global GDP. Current global GDP is $75.8 trillion. This means it would cost $174.3 billion. This is almost exactly one sixth of the total resources diverted to corporations. This would cover the cost of child benefit for all children under 5, support for new mothers or pregnant women for 4 months, as well as support for orphans, people with disabilities and pensioners. It does not include unemployment/public works support. Note that the 0.23% of GDP figure does not take into account current social protection expenditure by countries so this could be considered as the maximum that would be required to achieve the benefits outlined above. For more information see here (p. 28-9) and here.

7 Bloomberg New Energy Finance state that 2017 saw $333 billion investment in renewable energy. IRENA – the International Renewable Energy Association - said it was $260 billion in 2016 and $330 billion in 2015. If we use the £333 billion figure we could triple the investment in renewable energy with $1 trillion.

8 The current external government debt of low income countries is $95 billion, and lower middle income countries $908 billion. This totals £1.003 trillion. Figures from World Bank data.

2559 views