Business Leaders Gather at U.N.

AP ^ | June 25, 2004

[sarcasm]

UNITED NATIONS (AP) -- Brazilian President Luiz Inacio Lula da Silva urged the largest-ever gathering of business leaders at the United Nations to help fight global poverty by fighting the ``scandalous subsidies'' rich countries give their farmers.

Declaring that poverty is ``morally and ethically unacceptable,'' Lula said business must join governments and civic groups to ensure that millions do not go to bed and wake up hungry. They must change a world in which 24,000 people die everyday because they have nothing to eat, he said.

``I would like to see you engaged in a campaign to free all human beings from hunger,'' the Brazilian leader told about 500 business leaders, policy-makers and activists committed to improving business ethics and standards around the world.

Silva outlined several other ideas Thursday that could help reduce poverty including a tax on trade in certain weapons and imposing a small tax in current tax havens.

He lamented that the goals adopted at the U.N. Millennium Summit in 2000 -- including cutting in half the number of people living in poverty by 2015 -- won't be reached ``until the middle of the 22nd century'' unless major changes are made to close the gap between rich and poor nations.

Brazil is ``fighting unceasingly against scandalous subsidies that rich countries give their farmers,'' he said.

Last week, the World Trade Organization ruled in a landmark decision that cotton subsidies for U.S. farmers are unfair to producers in Brazil. The decision, which the United States is appealing, could prompt developing countries to mount new trade cases against agricultural subsidies for other crops.

Silva praised the WTO decision as a first step toward the elimination of payouts for American farmers that give them a competitive edge not only in cotton, but also for grain and sugar produced more cheaply in developing countries.

He told business leaders at Thursday's conference that they could make ``an important contribution'' in the ``hard struggle'' against subsidies.

``It's very important that each business leader and entrepreneur be able to call their government's attention to the serious distortions and injustice provoked by protectionism,'' he said.

``With a third of the $300 billion spent on subsidies every year, we would reach the millennium goals on time, as promised,'' he stressed.

Silva said Brazil, Chile, France, Spain and Secretary-General Kofi Annan have created a technical group ``to study how to raise funds worldwide'' to combat hunger and poverty. Its conclusions will be presented to world leaders on Sept. 20, the eve of this year's ministerial meeting of the U.N. General Assembly, he said.

Among the alternatives, he said, are a tax on trade in certain kinds of weapons which he didn't specify that could generate income of over US$20 billion per year.

``We're also analyzing a tax on financial transactions,'' he said.

A minimum tax of 0.01 percent on transactions in tax havens around the world would provide $17 billion annually, which would be ``an extraordinary contribution'' to fight poverty, Silva said.

The technical group is also considering a British proposal for an International Finance Facility through which donors from the richer countries would raise funds on the international markets, he said. Britain says this could double aid to developing countries from $91 billion to $182 billion.

Silva also urged entrepreneurs to take ``socially responsible actions'' such as committing their companies to give a percentage of corporate turnover to fight hunger, similar to the 0.7 percent that governments are supposed to earmark for development aid.

The daylong meeting was aimed at generating new support for the Global Compact, a voluntary agreement established in 2000 by the United Nations to promote human rights, good labor practices, environmental protection and, starting this year, anti-corruption standards.

The Brazilian president told the participants that they have a duty ``to fight for a fairer world,'' and he stressed that ``a society with more skilled workers and higher income consumers is not just fairer, it's more rational in economic terms.''