'Speculation in food prices is a scandal which seriously compromises access to food on the part of the poorest members'
Financial
markets are ruthless. Merciless speculators go to any extent to
profiteer from speculation in futures trading and forward contracts
in stock and commodity markets. This worrying trend has come under
the scanner of Vatican.
Vatican
says it's “increasingly intolerable” that financial markets are
shaping the destiny of peoples rather than serving their needs, or
that the “few derive immense wealth from financial speculation”
while the many are deeply “burdened by the consequences”.
In
a discourse to participants of a two-day Symposium “Investing for
the Poor” in the Vatican, Pope Francis said that speculation on
food prices is a scandal and he called on Governments throughout the
world to develop an international framework that promotes a market of
high impact investments, and thus “combat an economy which excludes
and discards”. Futures trading in agricultural commodities is a
multi-billion dollar business in many countries. In fact, there were
allegations that forward trading in agri items was a major reason for
the spiralling prices of food items in many countries.
Take any financial market -- from Wall Street to London, Hong Kong, Mumbai or Paris. Malpractices like insider trading, rigging of prices, front running in stocks and excessive speculation are rampant. You can see at least one major scam surfacing in one of these markets every year.
Vatican's
observation on market speculation is a continuation of Pope's
comments in Evangelii Gaudium. “While the earnings of a minority
are growing exponentially, so too is the gap separating the majority
from the prosperity enjoyed by those happy few. This imbalance is the
result of ideologies which defend the absolute autonomy of the
marketplace and financial speculation,” it says.
How can one tackle this? The
symposium, jointly sponsored by the Pontifical Council of Justice and
Peace headed by Cardinal Peter Turkson, Catholic Relief Services and
the Mendoza College of Business from the University of Notre Dame, is
examining “impact” investing and how it can serve the poor. It
aims to explore core concepts of impact investing, to discuss how it
aligns with Church mission and to discern how the Church might use or
promote impact investing to serve the poor.
Impact
investors are those who are conscious of the existence of serious
unjust situations, instances of profound social inequality and
unacceptable conditions of poverty affecting communities and entire
peoples. These investors turn to financial institutes which will use
their resources to promote the economic and social development of
these groups through investment funds aimed at satisfying basic needs
associated with agriculture, access to water, adequate housing and
reasonable prices, as well as with primary health care and
educational services.
“Investments
of this sort are meant to have positive social repercussions on local
communities, such as the creation of jobs, access to energy, training
and increased agricultural productivity. The financial return for
investors tends to be more moderate than in other types of
investment,” Pope said.
It
is important that ethics once again play its due part in the world of
finance and that markets serve the interests of peoples and the
common good of humanity, he said.
Meanwhile,
the excluded are still waiting. "To sustain a lifestyle which
excludes others, or to sustain enthusiasm for that selfish ideal, a
globalization of indifference has developed. Almost without being
aware of it, we end up being incapable of feeling compassion at the
outcry of the poor, weeping for other people’s pain, and feeling a
need to help them, as though all this were someone else’s
responsibility and not our own,” Pope's Evangelii Gaudium says.
