The Robin Hood Tax is the UK version of the Tobin Tax which was at the beginning of ATTAC in France ten years ago.

As an anti-poverty campaign, it is more pragmatic than the economic theories of Tobin Tax definitions or the political demands of the Attac network.

Supported by a coalition of 48 organisations, the Robin Hood Tax campaign spells out what the income should be spent on.

And in the spirit of our times, it uses Twitter and YouTube.

The video is set to private until the launch which is set to 0.05am in parallel with the 0.05% tax that Robin Hood wants to take.

However, Mervyn King, the Governor of the Bank of England, dismissed the idea of a Tobin Tax only recently, according to the FT.

Of course, this tax doesn’t get to the root of all evils, but at least it’s bound to capture people’s imagination!

Updates here.

This article is a review that took place at the launch of the Bangladesh Microfinance Statistics for 2007.

A Global Marshall Plan for Micro-Credits
as part of a Global Pact for Sustainability

Entry into a new quality of a global eco-social market economy

In the present crisis of the global economy the fate of the world community will be decided primarily by the degree, in which we are successful in finally securing a convincing, sustainable development for the benefit of all citizens of this earth. To this aim the consultations on systems for an improved global control of the world financial institutions are a valuable, but still far from a sufficient response.

Especially important at this time are great-hearted measures, which offer the weakest in the global community and therewith those, who are the most strongly affected by the worldwide economic crisis, direct support and perspectives. Therefore we recommend two concrete actions:

• Global Marshall Plan for worldwide, comprehensive micro-credit systems
The G20-nations should raise a joint fund, into which 10 billion US dollars be paid per year for the next three years. This money should be used exclusively to establish micro-credit organizations area-wide in all poor regions of the world, where they are not yet sufficiently available. According to the experience of the Grameen Bank and other similar institutions, 3 million US dollars are enough to establish a new micro-credit system in one region, which, as a rule, can finance itself after three years. With 30 billion US dollars 10,000 new micro-credit systems could be started in the next three years. Thus, within just three years time, it could be guaranteed that the poorest people all over the world would have access to micro-credits. In this way a perspective, which has already been field proven more than 130 million times, could be jointly created as a solution for the poverty trap.

• 10 percent earmarking for investments in social business
Presently more and more enterprises and joint ventures are being established worldwide, whose mission lies exclusively in the solution of the most pressing social problems, such as generating sustainable energy, access to clean water etc. Muhammad Yunus calls this “social business” and requested at the World Economic Forum 2009 in Davos, that at least 10 percent of all the special measures in the context of the present worldwide economic crisis should be earmarked for investments in such social businesses. We emphatically agree with this recommendation. More and more social businesses are now being established in the ecological sector, for example Grameen Shakti. Up to now they have installed 160,000 solar units in poor households in Bangladesh and by 2012 the number is to grow to 7 million. Thus social business is also an extremely attractive approach for the urgently necessary ecological shift.

These two actions also take the following situation into account: An economic recovery after the present collapse can gain a powerful and sustainable perspective far better in the backlog development of those, who have not yet gotten their fair share, than in the increase in the abundance of a minority of very rich persons. The systematic development of those two-thirds of mankind, who up to now live in poverty, is not only morally overdue, but it is, also from an economic point of view, what is necessary now. What is special about the two recommended measures: besides their immediate humanitarian effects, they are at the same time also perhaps the most intelligent and effective global promotion of the economy.

Trusting in your foresight,

First Signees: Dr. Franz Alt, Publisher;
Frithjof Finkbeiner, Head Global Marshall Plan Foundation;
Dr. Franz Fischler, former Commissioner of the European Union for Agriculture; Prof. Dr. Ashok Gangadean, Director World Commission on Global Consciousness;
Dr. Heiner Geißler, former Minister of Germany;
Celso Grecco, Founder Social Stock Exchange at BOVESPA, Brazil;
Prof. Dr. Prabhu Guptara, Head Wolfsberg Institute;
Prof. Dr. Hazel Henderson, world renowned Economist and Futurist;
Dr. Ashok Khosla, Chairman Development Alternatives and President Club of Rome;
Prof. Dr. Dr. Ervin Laszlo, President Club of Budapest;
Dr. Rupert Neudeck, Founder Cap Anamur and Grünhelme;
Dr. Christian Neugebauer, Editor-in-chief “Glocalist”;
Wolfgang Pekny, platform footprint;
Prof. Dr. Dr. Franz Josef Radermacher, Member Club of Rome and President Global Economic Network;
Peter Spiegel, Head Genisis Institute for Social Business and Impact Strategies,
Prof. Dr. Dr. Ernst U. von Weizsäcker, Co-Chair International Panel on Sustainable Resource Management

After having had a meeting with Federal Reserve chairman Ben Bernanke, he asks “who is creditworthy?” in a new light.

The introducer of the IMF said that they share Dr. Yunus’ vision of a world with less poverty…

Grameen America, started by a Bangladeshi in New York, has now 500 women clients and is seeking a license to set up Credit Unions – eventually in any state.

He advocated to turn the crisis into the opportunity of creating an inclusive system with a new point of normalcy, not just a club for the rich.

Dr. Yunus’ presence and talks were thus a ‘call of conscience that cannot be trivialised’…

As usual, Dr. Yunus advocates social business rather than call explicitly upon the financial elite.

The German Ministry for Economic Cooperation and Development has now asked the Development Bank KfW to provide a fund of $m 130 to alleviate shortfalls for microcredit institutions.

The Minister for Development said: “We have to make sure that those who contributed least to the crisis, don’t suffer from it the most.”

World turmoil may spur Islamic finance
Afp, Doha  – The  Daily  Star  Dhaka
Wednesday,  October 29, 2008

The fast growing Sharia financial system may receive a further boost as an alternative to capitalism amid the credit crunch and banking crisis, Islamic academics and clerics believe.

Already said to be worth 300 billion dollars and expanding at 15 percent a year, the Islamic system forbids the levying or payment of interest, preferring shared ownership and splitting of profits.

The global economic meltdown shows “the need for a radical and structural reform of the global financial system. The system based on the principles of Islam offers an alternative which could reduce risks,” Hatem al-Naqrashawi, head of theological studies at Doha University, told AFP.

“Islamic banks don’t buy credit but manage concrete assets… which shelters them from the difficulties that American and European banks are experiencing,” explained Abdel Bassat al-Shibi, managing director of Qatar International Islamic Bank.

Islamic finance is different from capitalism in two main ways. It bans interest-bearing loans, seen as usury, a practice forbidden by Islam, and also forbids speculation. Instead, it favours sharing risks and profits between a bank and a client.

Sharia compliant products include Ijara, a way of buying a house through a lease and subsequent ownership, rather than through a mortgage. Others are Musharaka, the sharing of profits and losses, and Murabaha, under which the seller declares the profit margin being made on the sale of a commodity.

Murabaha is seen as a way of enabling a buyer to avoid taking an interest-bearing loan, though some Islamic scholars say it is too similar to the charging of ‘riba’, or interest.

In the past three decades, the number of Islamic financial institutions has risen above 300, spread among 75 countries. Their total assets are more than 300 billion dollars and are growing an at average rate of 15 percent a year, according to studies.

“The collapse of capitalism based on usury and paper and not on the trading of goods on the market is proof that it is in crisis and shows the Islamic economic philosophy is holding up,” prominent Egyptian-born Qatar-based cleric Sheikh Yussef al-Qaradawi told a recent conference in Doha .

“We have all the wealth… the Islamic nation has all or nearly all the oil and we have an economic philosophy which no one else has,” he said, referring to the fact that Islamic countries, headed by Saudi Arabia, hold a large part of the world’s proven crude oil reserves.

Suleiman al-Audah, an influential Saudi cleric, called for an “international Islamic summit to define the framework and the stages of an Islamic economic alternative.”

Some Islamists admit, however, that this alternative is not yet operational.

“Theoretically, the Islamic economic system offers a complete and solid mechanism… but in practice, the Islamic banking experience is not yet mature, because it offers limited products like ‘Murabaha’,” Audah, a moderate Islamist, told AFP.

His caution is shared by Egyptian Islamist intellectual Fahmi Howaidi, for whom the Islamic system “could bring solutions to certain banking problems but cannot be a magic wand” to end the financial upheaval which is shaking the world.

As I write this article, the storm in the financial markets continues — stock markets in Asia, Europe and the US all are going through roller coaster rides, people fear bank runs and governments are pulling together trillion dollars worth of rescue packages. In this sadly crazy historic moment, when every current option is looking bleak and governments are busy cleaning up the private sector mess, perhaps it is a good time to look some distance into the future toward a gleam of hope for a kinder and gentler form of capitalism. My suggestion for that is to put together effective regional ‘social stock exchanges’ in each continent that can spearhead social good through capital markets. I believe Asia is ripe to take the lead in meeting this challenge.

What is a social stock exchange? It is a stock market where investors who care about social and economic returns buy stocks and bonds of companies that have strong economic and social returns. Interestingly, in a social stock exchange both not-for-profit and for-profit companies can participate. For-profit entities can either issue shares representing ownership in their companies or issue bonds. Meanwhile not-for-profit companies can utilise the stock exchange to issue bonds an action in itself that can bring operational accountability to the not-for-profit sector (as opposed to carte blanch donations from foundations).

Although Professor Muhammad Yunus discusses the idea of a social stock exchange in his latest book, Creating a World Without Poverty, and has been promoting it in lecture circles, the concept is not a new one. There are already several Social Stock Exchanges in operation or in the works, albeit each uniquely different from one another.

BOVESPA in Brazil was the first social stock exchange in the world. It was launched in 2003 with the objective of bringing together non-profit organisations and the social investors who are willing to support their programmes and projects. For BOVESPA investors, the return is solely in ‘social profit,’ where the investment brings about a more just society with opportunities for the poor and neglected. By providing capital for the non-profit organisations that list on this exchange and the providing social value for the investors who participate in this exchange, BOVESPA aims to change the labeling of non-profit organisations to ‘Social Profit Organisations’. So far about 43 Social Profit Organisations have raised capital through this exchange. However, trading of stock in this exchange is still a distant goal.

Europe’s answer to social investing is the FTSE4Good. Set up by FT Stock Exchange in London, FTSE4Good is an index for socially responsible investment. The definition of ‘socially responsible’ for this index is very broad and covers topics such as: working towards environmental sustainability, developing positive relationships with stakeholders, and upholding and supporting universal human rights. There are about 25 companies in this index. Given FTSE financial requirements, these companies are large for-profit entities which in many cases have very tangential effects on positive social change. Their ‘social mission’ often springs from the defensive posture of CSR rather than from a genuine effort to make positive social impact.

In North America, Green Stock Exchange (GREENSX) is attempting to become the Social Stock Exchange for that continent (and Europe). This Canada-based social stock exchange is aiming to launch by end of the year to trade shares in social businesses. GREENSX’s definition of social business is a business that makes a profit but benefits society as well delivering a triple bottom line return (economic, social and environmental return). GREENSX’s goal is to provide small green issuers access to public equity capital efficiently while ensuring liquidity for the investors. The success of GREENSX remains to be seen.

There is obviously a budding global interest in the notion of social stock exchange. Recently, Rockefeller Foundation donated $500,000 to the UK government to pay for a feasibility study for a social stock exchange. The Foundation picked UK as the site for the feasibility study because of the UK government’s support for social enterprises. Existing UK government initiatives include legal reforms for separate incorporation for social businesses and plans for a social investment bank funded with unclaimed assets held by financial institutions.

All this is encouraging in a global perspective; now, how about Asia and, in particular, Bangladesh? Bangladesh is a country that continues to produce remarkable social enterprises, and given the state of the country and the world, it can be expected to keep the pipeline of social innovation flowing. The limiting factor is, of course, capital. Let us move a few degrees east in longitude, and there is a country, which — though a small dot on the map — is wealthy, is a player in the financial markets and is itching to make a mark in social business. This country is, of course, Singapore. Singapore is ready, able and perfectly positioned to be the home of Asia’s first Social Stock Exchange. Bangladesh is ready, able and perfectly positioned to pepper that exchange with very effective social businesses. This is a match made in financial heaven.

Now, what’s the next step? It is very simply for the Bangladesh government to have the vision and desire to initiate a ground-breaking discussion with the Singapore government. Bangladesh is well positioned to make its mark in the next economic revolution of conscious capitalism. It can take its rock star social entrepreneurs Yunus and Abed — and get them to perform the ground-breaking concert for the social stock exchange for its potential partner Singapore.

Thus, my request to the Bangladesh finance ministry use this opportune moment — initiate the courtship and get Bangladesh on the global financial map. We are all waiting.
The writer is the regional managing director of Asia City Publishing Group and adjunct associate professor at Lee Kuan Yew School of Public Policy at National University of Singapore.