GENEVA (15 April 2020) – States must dramatically increase spending that targets inequalities and poverty caused by the COVID-19 crisis, and not just bail out corporations, banks and investors without human rights or social conditions attached, a UN expert said today.
In a letter to Governments and international financial institutions, the UN Independent Expert on debt and human rights said public investments should also aim at reaching small and mid-size enterprises, creating long-term sustainable employment, prioritising human rights and promoting a greener economy.
“Some stakeholders promote an approach consisting in ‘saving the economy’ at any costs, including by putting the health and lives of the majority of their populations at stake. This approach is often accompanied by a lack of serious efforts to reduce inequalities. In these terms, ‘saving the economy’ means prioritising the benefit of a certain elite,” the Expert stated.
Juan Pablo Bohoslavsky said private debt payments should be suspended for individuals financially crippled by the health crisis. During this period, these loans should not bear interest.
“Measures including unconditional cash transfers to maintain an adequate standard of living, provision of emergency shelters, a halt in evictions and cuts in the provision of electricity and water services must be considered immediately,” the expert said.
“Lessons learnt from the 2008-9 financial crisis give us a head-start for tackling current and future challenges. We know too well how this period saw a rise in world hunger, unemployment, a high increase in evictions, foreclosures, homelessness, entrenched inequalities and pushed too many into poverty.”
Bohoslavsky called for an immediate moratorium on sovereign debt repayment for the poorest and debt-distressed countries. “Debt restructuring and reliefs should be adopted by all creditors in order to ensure not only financial but also health and social sustainability of the debts. The case for state of necessity has never been so strong.”
States should also invest in nutrition, housing, education sectors and local small-scale environmentally sustainable farming and agricultural production. “This approach does not prevent governments from operating as payers of last resort to cover companies’ costs and pay salaries during the crisis, if needed. But this policy would only be justified if it is implemented to avoid retrogression in economic and social human rights.”
The independent expert said States could impose a one-off wealth tax but they should also undertake a more ambitious reform programme.
“This is the right time to seriously engage in structural reforms for redistributive justice including progressive taxation reforms, where millionaires and billionaires and large corporate conglomerates are requested to contribute to the society in a proportional measure to their fortunes,” Bohoslavsky said.