Analysis

Paying for Climate Change with a Carbon VAT

Taxation is a form of insurance where the benefits are inverted.  The intention is that these transfers be investments allowing the poor to improve their prospects and, eventually, become tax-payers.  The reality is that, in most countries, the poor are not so mobile and cash transfers are not so much investments as entitlements.

As politicians incrementally shift the tax burden up the income brackets they include more people as net beneficiaries and fewer people as net payers.  The credit crisis hurt governments so badly because, not only were banks destabilised, but their employees are the high-net-worth individuals who form the bulk of the tax-base.  As banks crashed so did tax receipts.

Governments which demand to be the only investor can steal their citizens' savings

The world’s 300 largest pension funds have managed assets worth almost $9 trillion.  That’s a one with 12 zeros.  And they’re not all based entirely in the rich North.  South Africa’s Government Employees Fund is – with $96 billion – one of the 20 largest in the world.

Poverty and the capacity for technology to bring Change

"The capacity for technology to drive change is limited by two things: the will of the people who use that technology to demand change; and whether governments are willing to murder their own citizens in order to prevent change."

I was speaking as part of a panel at the IESE Doing Good and Doing Well conference in Barcelona.  Our topic was "Does Information Equal Power?"

Reducing risk for the poorest of the unbanked and uninsured

The range of interest rates applied to micro-credit loans can be chilling.  45% to 85% in Africa, 30% in India and a jaw-dropping 155% in Mexico.

“What should be the appropriate rate of interest?” thunders Jacques Toureille, general manager at the Aga Khan Agency for Microfinance.  The occasion is the Doing Good and Doing Well conference hosted by IESE Business School in Barcelona, Spain.