Not many people would be familiar with the name Mohammed Bouazizi. But he can be considered the catalyst that set off the demonstrations in Tunisia that led to the end of President Ben Ali’s 23-year dictatorship.
Bouazizi, an ordinary food vendor, set himself on fire in protest against police extortion and government ambivalence. The movement spread throughout the Arab world, creating what is now known as the Arab Spring.
In Egypt, Hosni Mubarak’s 30-year reign was ended. And in Libya, a civil war resulted in the death of Muammar Gaddafi, ending his 42-year rule.
Protests demanding change have spread around the world. Yemen, Algeria, Syria, Morocco, Spain, the United Kingdom and, more recently, Russia have experienced them.
The scale, and consequences, of these protests have led to Time magazine selecting “the protester” as its Person of the Year. The Occupy movement, which includes Occupy Wall Street, was very much part of the wave of demonstrations and protests across the globe in 2011.
The political slogan “We are the 99 per cent” has been popularised by the movement, which is campaigning against social and economic inequality, high unemployment, greed, corruption and unethical corporate behaviour. Banks have been a particular target.
With what has been termed three acute and overlapping financial crises, climaxing with the Great Recession of 2008, the movement is demanding more equal distribution of wealth, a tightening of bank regulations, a reduction in the influence of corporations on politics and the arrest and prosecution of financial fraudsters responsible for the 2008 crisis.
Occupy protests have encompassed nearly 100 cities in 82 countries. It’s a global movement, and it is viral.
The movement has highlighted the increasing concern that investors may be losing confidence in the financial system and the markets, the primary source of capital for corporations.
This is fundamentally putting the capitalist ideology at risk.
The unending cycle of corporate scandals, centring on greed, deception and fraud, are creating an impression that governments and regulators lack the capacity to combat the problem. Despite the high-profile cases of the 1980s, including Drexel Burnham Lambert, and the ’90s, including Barings Bank and LTCM, and last decade, including Enron, Worldcom, Tyco, Bear Sterns and Bernie Madoff, two major corporate scandals have emerged over the past three months, intensifying the spirit of the movement and providing merit, and further justification, for financial reform and more robust financial regulation.
MF Global, an international financial derivatives broker, is in liquidation, with an estimated US$1.2 billion in customer funds missing.
The company bet wrongly on the direction of European sovereign debt, using more than 30 times leverage, and is thought to have used customer money to cover margin calls and maintain liquidity.
MF Global's chief executive at the time was Jon Corzine, a former CEO of Goldman Sachs and a former state governor and US senator.
In his recent testimony before a congressional panel, Corizne said it had not been his intention to violate any corporate rules.
Also in October, Japan’s Olympus Corporation was embroiled in a scandal when its newly appointed CEO was ousted after he exposed the longest, most significant loss-hiding arrangements in Japanese corporate history.
The protesters are increasing in numbers, the movement is gaining traction, and the evidence that change is needed is building.
The very survival of the financial system may depend on whether anyone is listening, and is willing to act on the urgent need for reform.
Anthony Galliano is chief executive of Cambodian Investment Management. [email protected]