Posted by WTO Watch Qld on December 9, 2001 at 15:56:45:
QUOTE OF THE WEEK
The really crucial issue is...whether private banks should be allowed
to be the creators of a nation's money and then claim ownership of it.
John Hermann, Economic Reform Australia
1) CALLS TO ACTION
2) FOCUS ON THE BANKS
a) Why and Inquiry into Bank Deregulation is Desirable
b) People's Bank will help Close the Gaps.
c) Creating New Money--Monetary reform for the Information Age
d) French Parliament Votes for Tobin Tax
1) CALLS TO ACTION
Dr John Loy is now seeking further comments from the public for the 2nd nuclear
reactor, specifically addressing issues such as; accident analysis, seismic
analysis, spent fuel and waste management. The Sept 11th incident has also
raised issues of protection against sabotage and terrorism.
You can find more details in part 5 of the issues paper.
Go to www.arpansa.gov.au and go to issues paper to see arpansa's comments
on receiving 11,500 odd submissions in th first round.
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The cotton industry is trying to expand into Northern Australia, this will
threaten some of the most beautiful and pristine areas in the country.
Please go to the ABC site (link below) and vote.
http://abc.net.au/kimberley/vote/default.htm The Ogiek have lived since time immemorial in the Mau mountain forest overlooking Kenya's Rift Valley. They live by gathering wild plants and hunting, but most of all they are famous as collectors of wild honey from beehives in the high branches of the forest trees. As well as eating this honey themselves, they also trade it with neighbouring peoples living outside the forest. Some Ogiek who live in the deep forest provide for themselves purely by hunting and gathering; others supplement their hunting with small vegetable plots and some livestock. For all Ogiek, bee-keeping and collecting honey remain central to their way of life. As a hunter-gatherer people they are looked down on by their cattle-herding neighbours. Mau, the Ogiek's ancestral home, is a protected area under Kenya's Forest Act. Ever since colonial times, governments have tried to evict them from the forest, under the fiction of 'protecting the environment' from the Ogiek's activities; even this year the authorities have tried to throw the Ogiek out of their homeland. Up until now, the Ogiek have always made their way back. But now they are facing the worst threat yet. While still claiming that the forest needs protection from these hunter-gatherers who have always managed it sustainably, the Kenyan government has opened up nearly 60,000 hectares of it for private use. Those who will benefit are mostly not the Ogiek, but developers such as tea planters and loggers, along with settlers from elsewhere in the country. Three powerful logging companies - Pan African Paper Mills, Raiply Timber, and Timsales Ltd - are already active in the forest. Allowing outsiders into the Mau forest is in fact part of a larger vote-winning scheme to open up around one tenth of Kenya's forests for settlement by some of the country's many landless people - the Mau forest makes up a large proportion of the total area being opened up. The tragedy is that if the government's scheme goes ahead, the Ogiek will simply join the numbers of Kenya's dispossessed and die out as a people. The plan also threatens Kenya's environment, as the Mau forest is a vital water catchment area. Drought is already endemic in Kenya, and experts agree that the loss of forest cover will worsen the problem, affecting neighbouring Tanzania also. The plan to open up the nation's forests was first announced in January 2001, sparking a wave of international protest. There was opposition in the Kenyan parliament, and protests and petitions from environmentalists. The Ogiek Welfare Association obtained an order from the Kenya High Court halting the opening up of 35,000 hectares in East Mau until after the resolution of a case which they had filed in defence of their land as long ago as 1997. Local authorities tried, through threats and intimidation, to make the Ogiek withdraw the case, but they remained firm; one elder told the local head of government, 'No amount of intimidation will deter us from demanding our God-given right within the constitution.' In an obvious attempt to avoid answering the Ogiek's claims, the case has been postponed. Yet surveying of the disputed land has gone on, in clear contempt of court. Once the East Mau has been opened up, the same is likely to happen to other Ogiek areas. In October 2001, the environment minister gave the order to go ahead with the opening up of these forest areas, and there are reports that loggers have already started systematic clearing of the newly-opened forest tracts. By going ahead, the Kenyan government is defying international opinion, its own legal system and the Ogiek's rights under international law, and is endangering the survival of the Ogiek as a people.Please write a brief and polite letter or fax (in Kiswahili, English or your own language) including these points: The right of the Ogiek people to the ownership of their ancestral land is enshrined in international law and must be recognised. Office of the President and, if possible, copy to: The Hon. Stephen Kalonzo Musyoka http://www.survival-international.org (ED: These press releases appeared in the week before the election, but debate was stifled by other events. If you think a People's Bank sounds like a good idea, how about ringing your sitting Member and telling him/her so?) By Will Bailey, former head of the ANZ Bank Two significant events changed the face of banking in the 1980’s and 1990’s. The introduction of advanced technology was one and the deregulation of financial services was the other. Over the past couple of decades and in particular the ‘90’s,the combined effects of the two major changes has caused anguish within sectors of the community. Some outcomes of one of the changes have been wrongly attributed to the other. This is particularly so in relation to bank branch closures. Prior to deregulation, banks were progressively rationalizing branches. Historically branches were spaced to cater for customers’ ability to travel. As cars became an essential item, and two car families more prevalent, it was possible to close branches in close proximity to others. With the introduction of ATMs and then on-line EFTPOS, the need for manned outlets declined. Technology was the driving force behind many branch closures. Technology was a cost and it needed to be offset by savings in the distribution network. Rationalisation would have occurred irrespective of deregulation. However the number of branch closures and the pace of change may have differed in a regulated environment. Deregulation was the change that caused the rapid unbundling of cross subsidisation. Since the introduction of savings banking into the commercial banks in the late 50’s and early 60’s, and the establishment of a trading bank operation in the Commonwealth Bank, a substantial amount of the cost of banking services was met from the interest margin. Deregulation gave the banks the freedom to steadily eliminate cross subsidisation with the result that interest margins decreased and fees increased. This user pays principle saw loan rates reduce as the margin between cost of funds and rates charged was reduced. The borrowing customers welcomed the result, but the increase in fees caused much angst in the community. Deregulation has provided the freedom for financial institutions to tailor their product offerings and to adopt risk profiles that best suit their chosen business directions. At the same time specialist financial institutions have disappeared. In particular, institutions which provided longer term, low interest loans, have closed or been absorbed into other organisations. This is not surprising as the shareholders of a company are not obliged to subsidise loans to segments of their customers to the detriment of other customers. This is a responsibility of the community not a group of shareholders. In other countries specialist institutions owned by the community exist to support the development of the country through assisting small and medium sized businesses. The ownership is the "community" not the government – governments don’t own organisations they are merely the "trustees" for the community. The support for small and medium sizes business is seen as a national priority as these enterprise are the drivers of job creation and wealth creation. There is plenty of evidence around the world to demonstrate the need for, and success of such institutions. Contrary to much political rhetoric these institutions are not a cost to the community. They run at modest profits. Also they complement other players in the market as they provide services others don’t want to offer. The current system of a deregulated financial system has provided much appreciated benefits to the majority of people and organisations in Australia. However disquiet does exist and criticism is extensive. Political parties are now releasing policies to "correct" the perceived adverse features. In essence new "regulations" are in the wings. The system may be changed again. My earnest suggestion is that before we throw the baby out with the bath water we move to ascertain the FACTS. What we need is an unbiased community based inquiry into the effects of deregulation – good and bad. Deregulation is now just on 16 years-old and a review is therefore timely. The terms of reference should be broad but should specifically cover the need for a community owned development bank, the impact of deregulation on smaller communities and the level of services available to the less well off. Political parties need to acknowledge that think tanks, political advisers and party members may not constitute the best source of knowledge and wisdom on this subject. We need grass roots input from ordinary citizens as well as vested interests if we are to satisfy the community’s expectations of justice for shareholders, staff and customers as well as the development of this great country. Mr Will Bailey Fax: 03 52213497 -------------------------------------------------------------------------------------------- http://canberra.yourguide.com.au/detail.asp?class=your%20say&subclass=general&category=columnists%20analysis&story_id=104460&y=2001&m=11 People's bank will help close the gaps Canberra Times Nov 6, 2001 By Ted Kolsen Professor Emeritus at the University of Queensland. THE CALL by former ANZ Bank chief Will Bailey for an inquiry into bank deregulation and the feasibility of a new government-backed development bank, highlights the forgotten issue in the election campaign rural and regional and business development. Deregulation and competition policy have dominated economic policy since the 1980s. Development policy has come to be equated with these policies, which have had some good outcomes as well as considerably deserved criticism. If our leaders are going to "build the nation," then they are going to have to look in new policy directions that "build our regions and industries". A starting point is a new government-backed People's Development Bank. In part it has to be a development bank like the former Commonwealth Development Bank that helped to establish 400,000 small businesses in its 30-year history. In part, it has to provide services to those sections of the community not adequately serviced by the commercial banks. Today, Australia's major banks are primarily concerned with maintaining or increasing profits, achieved by maintaining or increasing market shares. This is not a criticism of the major banks, because, in the current economic context, they cannot do otherwise. While they could be regulated to achieve other objectives, such as regional or distributional equity, they are not. Competition between four market participants, known technically as oligopoly, has effects which differ markedly from those of a highly competitive market. For example, services which might be profitable for one bank in a region but unprofitable for four banks may not be supplied at all. Large banking organisations have problems with activities which require more labour-intensive attention than is compatible with the banks' electronic set-up. These activities will be charged higher fees, or will be phased out. Will Bailey's "People's Development Bank" proposal meets these and other deficiencies. A wide spread of branches is achieved by using Australia Post's infrastructure. Pass book accounts, which used to be available through the Post Office, will be provided for those who prefer this more labour-intensive service delivery. Interest can be paid on small amounts, as was previously the case. The amalgamation of a large number of small accounts will allow the People's Bank to earn a good return on its investments. Small term deposits, which currently earn close to zero, can be similarly deployed. A large number of small depositors, though more costly to administer, can yield as good a gross return as a small number of large depositors. A People's Development Bank will not be as profitable as any one of the big four. But it would earn enough to at least be self-supporting. It would provide some of the missing links in the current financial services infrastructure equity and geographical accessibility. The passing of the Commonwealth Bank, intended to have some equity objectives, into the private sector had little political support and was certainly contrary to Labor Party policy. The demise of the Development Bank, and various Rural and other State Banks resulted in services gaps which they were originally designed to cover. The proposed People's Development Bank will help to close those gaps. Because it helps to close the gaps, it will complement rather than compete with the commercial banks. It should also be noted that the provision of other infrastructure, including roads, railways and telecommunications, has the objective of achieving wider accessibility than would be possible if profitability were the only determinant. Ensuring accessibility of basic services is a matter for government, not for the private sector. The major party that supports a new bank, or an inquiry into its feasibility, is likely to win critical support in marginal electorates because they cover those regions most affected by the negative impact of bank deregulation. Of equal importance is the political signal such a policy would send to the electorate; that the next government would be going forward with new policies, different from the old economic agenda that has run its course over the past 20 years. It is the sort of signal people doing it hard in depressed areas are looking for - a new concern for their regions, their security, their future. --------------------------------------------------------------------------------------------- c) CREATING NEW MONEY: "A change was coming upon the world - a change from era to era. The paths Today¹s monetary and banking system has not yet caught up with the central As it now exists, the monetary and banking system is opaque, inherently Our proposal does not conflict with those, but it is different from them. 1) Central banks should create the amounts of non-cash money (as well as We refer to this as "seigniorage reform". In the conditions of the We propose that new non-cash money should be created and put into It will be for central banks to decide at regular intervals how much new There are many ways that governments will be able to spend the new money Next, then, how are commercial banks to be stopped printing new money? These four changes will reflect today's reality. Today's reality is that In that light, the traditional reserve system for controlling the creation As goldsmiths and bankers increasingly lent greater amounts of credit The system of banking management and control based on it became known Because it reflects today¹s practical realities, it will make monetary We identify the following arguments for seigniorage reform. It will: Turning now to suggested objections to the proposed reform, I have already We do not give much weight to suggestions that, in spite of an increasingly Finally, in the international context, we conclude that - far from being at a So what are the prospects for seigniorage reform? And what should be done In addressing these questions we have recognised that, for the reform to go 1) politicians and public officials; However, we also recognise that it is difficult for people pursuing a James Robertson ---------------------------------------------------------------------------- d) French Parliament adopts Tobin tax amendment By Yann Galut In the evening of Monday 19th November 2001, the French National It is, thus, a symbolic and political victory that has been obtained We must now continue to build on this symbolic victory in the For several years now, members of the ATTAC Group in the National And as Gérard Fuchs, French Member of Parliament, recalled during the The text of the amendment adopted is particularly interesting for the Yann Galut, Member of the French Parliament and member of the =================================================
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Kenya: government destroys Ogiek's forest
'Settlement of other people in our midst would mean that the Ogiek culture would cease. We will be wiped out.'
Joseph Towett, Chairman, Ogiek Welfare Council
The Ogiek people of Kenya are resisting a government that seems determined to destroy their forest home.
The opening up of East Mau Forest would be a blatant violation of High Court orders, and by extension a contempt of court.
Surveying and logging in all the disputed areas of the Mau forest must be stopped.
Please send your letter to:
His Excellency President Daniel arap Moi
PO Box 30510
Nairobi, Kenya Fax: +254 2 210 151
(Begin: Your Excellency)
Ministry of Tourism and Information
PO Box 30027
Nairobi, Kenya Fax: +254 2 217 604
(Begin: Dear Mr Musyoka)------------------------------------------
Survival is a worldwide organisation supporting tribal peoples. It stands for their right to decide their own future and helps them protect their lives, lands and human rights.
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2) FOCUS ON BANKING
a) The AGE newspaper Feature, Wednesday Nov 7
Will Bailey: Why an inquiry into Bank Deregulation is desirable
A MONETARY REFORM FOR THE INFORMATION AGE
By Joseph Huber and James Robertson
(Summary published in World Review, Vol 4 No 2)
trodden by the footsteps of ages were broken up; old things were passing
away." J.A. Froude, History of England.
role now played by non-cash money (i.e. money held in and transmitted
between bank acounts), or with the accelerating circulation of this
dematerialised money via modern information and telecommunication
technology.
un-safe and unstable, almost impossible to control, and too expensive. It is
increasingly perceived as part of an unaccountable system of money and
finance that needs reform at every level - local, national and international.
New initiatives and proposals are in the air. Among these are LETS (local
exchange trading systems), Time Money and other alternative or parallel
currencies, microcredit, community banking, credit unions, and other
approaches to local community finance; and, at the international level,
proposals for supranational currencies and a new global "financial
architecture".
It is to reform the mainstream monetary and banking system, so that it
will reflect the values of democratic civil society and the realities of the
Information Age. It is basically simple, in two parts:
cash) they decide are needed to increase the money supply, by crediting
them to their governments as public revenue. Governments should then put
the money into circulation by spending it.
2) It should become illegal for anyone else to create new money denominated
in an official currency. Commercial banks will thus be excluded from creating
credit as they do now, and be limited to credit-broking as financial
intermediaries.
Information Age it will restore the prerogative of the state to issue legal
tender, and to capture as public revenue the income which that generates.
Originally, seigniorage arose from the minting and issuing of coins by
monarchs and local rulers. Extending it to the creation of all official
money will correct the anomaly that has grown up over the years, resulting
today in 95% of new money being issued, not by governments as cash (coins
and banknotes), but by commercial banks printing credit entries into the
bank accounts of their customers in the form of interest-bearing loans. In
the UK, for example, this means a loss of potential public revenue of about
£45bn a year; it gives the commercial banks a hidden subsidy in the shape
of special, supernormal profits amounting to about £21bn a year; and its
total cost to the UK economy is about £66bn a year.
circulation in the following way. First, in their role as central monetary
authorities, central banks will issue the new money as public revenue simply
by entering it into the current accounts they hold for their governments.
(Current accounts contain "sight deposits" - or "demand deposits" or
"overnight deposits" - from which non-cash money can be immediately and
directly spent.) Then governments will spend the new money into
circulation.
money to create. They will be accountable for achieving monetary policy
objectives that have previously been laid down and published. But they will
have a high degree of independence, giving politicians and governments no
power to intervene in decisions about how much new money to create.
Scaremongers may raise the spectre of inflation. We show that the proposed
reform will actually provide a more satisfactory way to control inflation
than is possible today.
into circulation. We discuss some of these, such as paying off the National
Debt, or reducing taxation, or introducing a citizen's income. We see merit
in all those possibilities. But we conclude that how the new revenue is
spent should, like public revenue from other sources, be for governments of
the day to decide according to their priorities.
Four changes will be needed.
… Sight deposits denominated in the official currency must be recognised as
legal tender, along with cash (coins and banknotes).
… The total value of the sight deposits existing in all the current accounts
of bank customers, banks, and government (that is the total amount of
non-cash money), together with the total amount of cash in everyone¹s
possession, must be recognised as constituting the total stock of
means-of-payment money immediately available for spending.
… Customers' current accounts must be taken off the banks' balance sheets,
and managed by the banks separately from their own money - which is not
what they do today. This will make a clear distinction between means-of-payment
money in current accounts, and store-of-value money (capital) in savings
accounts. In practice this will mean that, except when a central bank is
creating new money as public revenue, all payments into current accounts
will be matched by payments out of other current accounts, or paid in as
cash.
… Finally, if any person or organisation other than a central bank fails to
observe that distinction and prints new non-cash legal tender into a current
account, they will be guilty of counterfeiting or forgery - just as they
would be if they manufactured unauthorised banknotes or coins.
bank sight deposits - also banknotes, although in the UK they still say "I
promise to pay.." - signify more than merely entitlements to money. They
actually are money. Recognising this is what has enabled my co-author
Joseph Huber - unlike bankers, monetary officials of government, mainstream
monetary academics, and even most monetary reformers hitherto - to develop
an exciting and convincing new approach to monetary reform.
of new non-cash money by banks can be seen as a throwback to a time
when money was a physical substance, gold or silver, and not primarily -
as now - information held in bank accounts and transmitted directly from
one bank account to another.
than the money they possessed themselves and than had been deposited
with them for safekeeping, it was recognised as prudent - and then became
obligatory - to limit to a specified multiple of the gold and silver they held in
reserve the total amount of credit they could create. That gold and silver,
and subsequently the other immediately liquid assets which took their place,
became known as a "fractional reserve" - because it was a specified fraction
of the total assets and liabilities of a bank.
as "fractional reserve banking". Past proposals for monetary reform have
often advocated 100% banking (in place of fractional reserve banking) as a
way to prevent banks creating new money. The approach we propose will
achieve the aim of 100% banking, but in a simpler and more realistic way.
definitions and terminology and statistics more easily understandable.
This is very desirable. For example, it is not at all clear what is now meant
by the "money supply". The different definitions of money - M0, M1, etc, up
to M4 - are abracadabra to most people. One sometimes feels that, if a
banking priesthood had deliberately designed monetary statistics and
terminology to conceal from citizens and politicians of democratic countries
how the money system now works and how it could be made to work better
for the common good, they would have found it difficult to improve on what
exists today!
… provide a substantial new source of public revenue;
… contribute to greater equity and social justice;
… reduce inflationary tendencies in the economy;
… create greater economic stability by reducing the peaks and troughs
of business cycles;
… improve the safety and stability of domestic banking institutions;
… remove economic distortions now arising from 95% of new money
being channelled into the investment and spending priorities of banks
and their customers;
… reduce monetary pressures, arising from the creation of new money as
interest-bearing debt, that encourage environmentally unsustainable
development, and
… make the monetary and banking system more transparent and open to
public and political understanding of how it works.
mentioned and rejected one - that it may make inflation more difficult to
control. Others - that it will amount to nationalising the banks, or putting a
tax on money - can be dismissed briskly as obvious misconceptions.
competitive environment, loss of the banks' supernormal profits will force
them to increase their charges, or that they will be able to evade the
prohibition on creating new money. We believe that the risks of monetary
controls being bypassed by a growing use of parallel currencies, or by the
development of electronic currencies and internet banking, will be reduced,
not increased, by seigniorage reform.
disadvantage - the citizens, businesses, banks and economy of a country
or currency area that initiates seigniorage reform are likely to benefit from it;
and that it may contribute to the stability of the international monetary and
financial system and its further development.
to promote it? As Machiavelli pointed out in 1532 in The Prince, the
minority who will lose by a reform will always resist it strongly, whereas
the majority who will benefit from it will tend to be lukewarm in their
support. So, in this case, who will be its opponents, and who its
beneficiaries and supporters? What developments may help to trigger wider
understanding of it and support for it? Which countries could take the lead
in pioneering it? And why may it be possible to achieve it now, when
similar attempts people like Jefferson and Lincoln in the USA, Gladstone in
Britain and Bismarck in Germany, have been successfully resisted for the
past two centuries?
through, it will be necessary to get support, or at least acceptance, from
among the following:
2) the banking industry, central banks, and other national and international
monetary and banking institutions;
3) the mainstream community of economic and financial policy-makers,
policy-analysts, and policy-commentators; and
4) the community of respected monetary academics, monetary historians and
other specialist monetary and banking experts.
professional career to come out in support of reform until it is accepted
that they should. This applies to public officials, central bankers,
policy-analysts and policy-commentators, and monetary academics, as
it does to everyone else. So a high priority is to spread awareness of the
case for monetary reform among politicians and individuals, NGOs and
pressure groups who are concerned with economic efficiency, social
justice and environmental sustainability. Then, with help from existing
supporters of monetary reform, they can help to create a climate of
informed opinion and pressure that will make it easier - more compelling,
indeed - for the experts to give seigniorage reform the serious attention it
demands.
The Old Bakehouse, Cholsey
Oxon OX10 9NU, UK
Tel: +44 (0)1491 652346
Fax: +44 (0)1491 651804
e-mail: robertson@tp2000.demon.co.uk
Assembly adopted the principal of a Tobin tax up to a maximum amount
of 0.1% on international speculative financial transactions. This tax
will enter into force after its adoption by the other European
parliaments.
by the French Members of Parliament, in particular by those in the
ATTAC group of the national assembly. Now the same vote must be
replicated in the other European Parliaments in order for the tax to
enter into force. The French Parliament is the second Parliament in
the world, after our Canadian friends in 1999, to have voted on the
principle of a Tobin tax.
different parliaments in the world. On one hand, this vote shows that
numerous parliamentarians are not satisfied with the financial
globalisation that is imposed on us. The taxation of financial
transactions must be top of the agenda at the next World Social Forum
in Porto Alegre, which takes place at the end of January 2002 in
Brazil ».
Assembly have been introducing an amendment during the vote on the
Finance Law seeking the establishment of a Tobin type tax. Their
perseverance has not been in vain. This victory, even though symbolic
for now, may be the catalyst for the political battle which will take
place in other countries and at the heart of Europe. The victory will
be, without doubt, a persuasive reference point for future debates in
the other European Parliaments.
debate in the Assembly : « When we first talked about banning child
labour, it was a utopia. When we first talked about not working on
Sundays, it was a utopia. When we first talked about paid holidays,
some of us declared that they would not pay employees for doing
nothing. It is true, to talk of taxing financial transactions is a
utopia. But we believe that this utopia must become reality. We need
political regulation of financial globalisation (.) This evening, our
aim is to launch an appeal, first of all to the other European
Parliaments, for them to follow us, and then to our other colleagues
in the OECD. But let us not hide behind the need for the universality
of this proposal before taking it. Let's say to the other European
parliaments « Follow us ! » and in a few years' time, we will be proud
of what we did this evening. »
evaluation undertaken by the administrative services of the National
Assembly. Thus, at a rate of 0.1% (maximum hypothesis), taking into
account the current volume of monetary transactions at the Paris stock
exchange, the return would be 50m Euros per day, or 12.5 billion Euros
per year if the volume of transactions remained the same. Even if the
tax was only 0.01%, the return would still be, despite the foreseen
exclusions, 1.25 billion Euros per year for this stock exchange alone
where only 4% of exchange operations in the world are carried out
(according to the Bank of International Settlements).
Parliamentary ATTAC Committee
Groupe.assemblee.nationale@attac.org
Terrie Templeton WTO Watch Qld gumbus@powerup.com.au