In this highly globalized era, among the challenges blocking the path to sustainable development are poverty and hunger, inadequate food production and distribution, environmental degradation, economic stagnation, and many others. Add to the equation the worsening of climate change and its impacts, all of which adversely affect the current global economy.
How can global and local leaders and organizations help curb these monstrous challenges?
Share the World’s Resources or STWR, an international organization advocating for fairer sharing of wealth, economic opportunities, and resources, has recently released a report explaining the ways on how to finance the global sharing economy. From the report, we could surmise that the STWR calls for a paradigm shift — from an economic outlook that does not effectively prioritize the needs of its people to one that is focused on redistributing finance to other more neglected areas. The report states that, if proper and fairer prioritization could be efficiently done, we could redirect approximately $2.8 trillion into tackling more pressing global emergencies.
Specifically, what could governments and development organizations do to uphold global sharing economy financing? STWR outlines 10 policy recommendations in their report, presented as follows.
Speculation in financial markets has been contributing to the instability of economies all over the world. It is much different from the real economy, which refers to the actual production of goods and services. A very small percentage of the population, the elites, benefits from financial speculation. Thus, implementing a financial transaction tax or FTT can help lessen trading practices that destabilize the market. If implemented globally, FTTs can generate up to $650 billion annually.
Cutting the subsidy for fossil fuels. Burning fossil fuels is one of the main contributors to global warming, being a big agent in the total amount of emitted carbons in the atmosphere. Cutting subsidies to fossil fuel use by year 2020 would not only promote a cleaner, healthier environment but also help raise $531 billion annually.
In the previous 13 years, military spending has risen by more than 50%. Currently, the government spends around $250 for each person annually for military-related purposes. Reducing the budget for military spending would not only lessen conflict and war and promote peace but also help governments save an amount that could otherwise be redistributed into more pressing development issues. The STWR mentions that reducing military spending could generate up to $434.5 billion annually.
Government agencies must be even more vigilant with how big corporations and multinational companies pay their taxes. If national and international laws regarding tax are properly implemented and observed, governments can raise up to $349 billion.
Increasing development assistance will largely help developing countries and nations affected by natural disasters. Although development assistance systems need to be reformed to prevent funds from being compromised, increasing the Official Development Assistance funds by 1% of a country’s gross national income can raise up to $297.5 billion a year, directly helping nations and people needing immediate aid.
Governments and other funding agencies must stop supporting wealthy farmers and agricultural corporations and instead redirect this amount for small-scale farmers and agro-ecological farming practices. This could generate up to $187 billion that could be used to improve agriculture and food production in areas that experience extreme hunger.
The International Monetary Fund or IMF can raise funds and redistribute these collected funds to alleviate poverty in many nations. This capacity of the IMF should be maximized. Their Special Drawing Rights facility could raise up to $100 billion every year, while gradually selling their gold reserves can generate up to $15.5 billion over 10 years, thus totaling to $115.5 billion that could be redistributed to developing nations.
Aside from ending subsidies to fossil fuel, another alternative is to implement taxes for the use of dirty fuels, such as fossil fuel, oil, gas, and coal. Implementing taxes for the burning of these fuels is reasonable on the basis of the environmental damage that it inflects, hence the carbon taxes. The amount of tax money that can be generated from dirty fuels can be up to $108 billion.
Screening debts and thereby canceling illegitimate ones made by corrupt politicians and dictator leaders can free many nations from unjust debt. This can generate up to $735 billion in total, or $81 billion a year.
On the condition of free trade agreements or in exchange for financial assistance, developing nations are being forced to lower the taxes for imported goods. Thus, they can lose up to $63.4 billion annually. Laws and procedures on import tariffs must thus be protected and upheld to grant developing nations fair trade rules and increase income, which then could be redirected to priority issues in their area.
If these policy recommendations will be carefully reviewed and implemented, the “monstrous” challenges to development — climate change and its impacts, inadequate food production and hunger, lack of energy sources, environmental degradation, economic stagnation, and many others — may not seem to be as “monstrous” after all. Financing the global sharing economy, recovering stray funds, and redirecting them into priority development issues can help developing nations attain true and sustainable development.