A committee of UN-appointed independent rights experts has warned that the finance industry’s thirst for new sources of capital around the world to please investors is having a major negative impact on the enjoyment of human rights.
The right to safe drinking water and sanitation, food, suitable housing, development, and a healthy and sustainable environment is among the rights at stake when hedge funds and other investment firms increase their speculation in financial markets.
The independent Special Rapporteurs and other experts underlined their worry in a statement about financial speculators’ creeping expansion into new areas of the economy, putting human rights at risk.
They emphasized the importance of trade in areas critical to the enjoyment of human rights by marginalized peoples, indigenous peoples, Afro-descendant and peasant groups, people with disabilities, people living with Albinism, and people living in conflict zones.
The experts also pointed out that so-called financialization – the rise in new financial instruments managed by new financial services since the 1980s – has a disproportionate impact on women and girls’ enjoyment of their rights, who are routinely discriminated against. The effect on the old was also discussed.
According to a former Special Rapporteur on adequate housing, vast sums of global capital have been invested in housing as a commodity, security for financial instruments sold on global markets, and a way to accumulate wealth in recent years.
When the global financial crisis of 2008 hit, many homes lost a significant portion of their value, leaving individuals and families homeless overnight.
In the Global South, informal settlements in Southern cities are often razed for luxury housing and commercial development aimed at the wealthiest segments of the population, according to the expert.
According to the expert, the process of financialization of assets has only been accelerated during the COVID-19 pandemic.
Experts described how, in agricultural markets, the same big international banks that caused the global financial crisis invested billions of dollars in food futures, causing prices of raw materials like wheat, corn, and soybeans to double or even triple in a matter of months, resulting in a new speculative food bubble.
According to the World Bank, an additional 130 to 150 million people were driven into extreme poverty and hunger, primarily in low-income nations that rely on food imports to feed their populations.
The experts pointed out how the financialization of housing and food has worsened disparities and exclusion, disproportionately affecting deeply indebted households and those with low incomes.
They claim that using speculative logic in these areas undermines people in poverty’s human rights, exacerbates gender inequity, and exacerbates the vulnerability of marginalized communities.
Experts also underlined the growing monetization and commodification of ecosystem services such as carbon storage.
They warned that it jeopardizes ecosystem sustainability, marginalizes natural and cultural values that have no obvious commercial worth, and reduces indigenous peoples’ and local communities’ authority over their lands.
They claim that the right to pollute and destroy nature is increasingly legitimizing and commercializing.
They also noted that responding to the climate emergency frequently overlooks both the impacts on impoverished people and the human rights and livelihoods of the poorest.
One example was the displacement of indigenous peoples from forests or the replacement of complex old-growth forests with monocultures of fast-growing non-native tree species.
Treating housing, food, or the environment as assets to be traded in financial derivatives markets by hedge funds and other financial actors is a direct attack on people’s ability to exercise and enjoy human rights such as the right to housing, food, a healthy environment, or safe drinking water and sanitation, according to the experts.