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The third of James Bond movie series, Goldfinger, released on 1963, portrays bullion dealer Auric Goldfinger who launches an operation aiming to bring western economy to a collapse. Thus, Mr. Goldfinger with the support of a Chinese agent aims to detonate a dirty bomb in Fort Knox, where US bullion depository is located. By concluding this operation, Auric Goldfinger aims to achieve two results, first to render US bullion reserves as useless because of the radiation for about half a century so western economy would collapse and eastern economy of communist states would prevail; and the second is to multiply the value of Goldfinger bullion reserves. The operation of Goldfinger would lead to a typical formula of public loss and private gain, exactly what happened with the outbreak of the financial crisis of 2008, which was mostly caused by monetary bubble  because of process of financial deregulation that has bred a spate of“innovative” financial instruments in the most sophisticated financial markets that are completely disconnected from productive activities in the real sector of the economy. Therefore, financial deregulation made it possible for investment banks and other financial entities to operate without any supervision or capital requirements which resulted with rise of credit leverage to very high levels and with the high risk in the same time.

The outbreak of the crisis brought into light two facts, that in nowadays globalised economy, any crisis in powerful economic countries would have a global effect; and the second one is the absence of an international framework to control deviation of the financial policies that would lead to a possible financial crisis and so to a global economic crisis. Such an idea to create an international framework that would control or suggest to some extent financial policies of the states sounds like very hard at the moment because of the absence of political will of the states to do so.

However, as far as we are concerned, this article aims beyond the problem of the financial policies of the states, and brings attention to effects of the crisis on human rights and negative impact on the process of economic growth and development of developing countries. Crisis consequently have affected global  trade because commodity prices have declined, thus export was the first to suffer the damages because of the lower demands in developed countries which decelerated growth of the world trade.

Economic growth in Africa was expected to decelerate to 4.1 per cent in 2009 from 5.1 per cent in 2008, in East Asia was expected to decline notably in 2009, as exports would decelerate significantly, and same was expected for other regions as well. According to the World Bank report at G20 Finance Ministers and Bank Governors Meeting on 2009, crisis was projected to increase poverty up to 46 million people only in 2009, and number of people suffering from malnutrition was up to 44 million in 2009 because of the food crisis, infant deaths will grow for 400 thousand per year than they would have been in absence of the crisis, and during period from 2008 to 2015, the number of infant deaths will be around 1.4 to 2.8 million as consequence of the economic crisis. Moreover, FAO stipulates that because of the crisis number of people affected by the world hunger could go up to 1.2 billion only in 2009 and worldwide unemployment could have been increased up to 40 million unemployed persons during 2009.

Therefore, effects of the crisis were cataclysmic, with severe impact in economic and social rights and other fundamental human rights, causing regress on economic growth and increase of national and global debt, with impact from the right to life and economic and social rights in one hand and to the environment and global warming in the other hand. Human rights and economic and social rights granted through international instruments have been affected because of the crisis; therefore states have failed to ensure realization of human rights.

With respect to deregulation, international law cannot dictate states how to regulate their domestic law, and this goes even further to the fulfillment of obligations that derive from treaties that states are party to. International law remains indifferent on how states comply with their obligation as long as those obligations are fulfilled. In this case, with respect to human rights, states have incorporated them into their domestic legal system, and they are obliged to respect, to protect and fulfill human rights according to international instruments. Furthermore, Human Rights are to be considered as jus cogens and respect for human rights is a must in all circumstances (see Art. 50).

Duty to respect requires the duty of states to prevent any violation of human rights by effects that could derive from certain state policies, and in the same time duty to protect obliges states to take positive action and to make sure that third parties will not affect realization of Human Rights. Thus, states, particularly United States in this case should have installed certain control and supervision over financial entities to prevent any action that could cause violation of human rights in harmony with its duty to protect.

This obligation is confirmed also by opinio juris (see: para 115) and is one of the three pillars of obligations that states have toward realization of human rights. (see also: Velásquez Rodríguez v. Honduras, para. 172; HRC, Delgado Paez v. Colombia, p. 140, para. 5.6). So after crisis have caused the damage, states should fulfill its duties to fulfill human right by taking positive steps through legislative and budgetary means on realization of human rights, to avoid such violation of human rights as happened with the crisis of 2008.

While human rights have extraterritorial application, states are obliged to respect and protect them not only as long as their jurisdiction lays down, but as well should take appropriate measures to prevent any action that would affect human rights beyond their jurisdiction. After 9/11, states increasingly are in a position to influence human rights beyond their jurisdiction, and as crisis revealed, even through their financial policies that may harm human rights also beyond their jurisdiction.Therefore human rights granted through Universal Declaration of Human Rights, including International Covenant on Economic, Social and Cultural Rights and the core of international human rights treaties are suffering negligence and absence of political will from states to respect, protect and fulfill them.

The obligation of states to respect, protect and fulfill human rights lies also in the UN Charter, recognized obligation to respect to human rights as a universal value of civilized world in its preamble, and reaffirmed at article 55 and establishing the obligation to fulfill human rights in article 56 of UN Charter. International community through international cooperation should include respect for human rights in the process of policy making, and every undertaken measure by international community or national states should take into account the influence of those policies in human rights. On the other hand, states should implement certain control over financial entities operating within their territory, and by doing so they make sure that human rights that are part of their domestic law deriving from international human rights treaties will not be negatively influenced.

A drastic re-regulation of financial market should be done by regulating pro-cyclicality, cross-border flows, establishing effective surveillance, reforming credit-rating agencies, and recourse from ideological approach such as liberalization of market, to effective scientific approach with regard to economy and financial markets.  While modern global reserve system does not rely only in a single national currency, global reserve system should be revisited, and in this spirit developed countries should increase aid to developing countries that have been mostly harmed by the crisis, and by doing so they will serve the right of development to individuals and peoples of developing countries.

In all this process, states and international community should make sure that human rights will have a decent position when they revisit their market policies, and human rights will also have a determinative role in the policy making process.

Image Source: Udo Kempen