Third ECONOMICSThird World ECONOMICS No. 730, 1-15 September 2021 World Trends and Analysis

No.730 1-15 September 2021 e-ISSN : 27165388

Difficult road to MC12 for developing countries

In the face of developed-country opposition, developing countries face the challenging task of trying to steer discussions at the WTO towards a successful outcome on issues of interest to them at the trade body’s forthcoming 12th Ministerial Conference (MC12). l South faces moment of truth on development issues in run- up to MC12 – p2

...... Also in this issue ......

Latin American and Caribbean economies need to boost their resilience amid commodity price hike

Privatized health services worsen pandemic

Who is really at the table when global tax rules get decided?

1 THIRD WORLD CurRent Reports I WTOThird World ECONOMICS No. 730, 1-15 September 2021 Economics Tren d s & A n a l y s i s South faces moment of truth on 131 Jalan Macalister 10400 Penang, Malaysia development issues in run-up to Tel: (60-4) 2266728/2266159 Fax: (60-4) 2264505 MC12 Email: [email protected] Website: https://twn.my Unless they forge a common front around issues of interest to them, developing countries could see these subjects sidelined from the WTO agenda leading up to the organization’s 12th Ministerial Conference C O N T E N T S this November. by D. Ravi Kanth CURRENT REPORTS

South faces moment of truth on development issues in run-up to GENEVA: The developing countries and 10) the developmental and inclusive MC12 — p2 least-developed countries (LDCs) could agenda on reforming the WTO. face a moment of truth at the World Trade Major developed countries such as Organization when their representatives the United States, the European Union, LAC economies need to boost their return from their summer recess at the Japan, Canada (which coordinates the resilience amid commodity price beginning of September. Ottawa Group of some 13 countries), hike — p5 Due to fierce opposition from a Australia, Norway and Switzerland seem handful of developed countries and to be coalescing around their own issues some developing countries, a successful that risk turning the multilateral trading OPINION outcome on the developmental issues system, particularly the WTO, into an “us raised by many developing and least- and them” plurilateral organization. Privatized health services worsen developed countries over the past four Unless many developing and least- pandemic — p8 years seems unlikely at the WTO’s 12th developed countries forge a common front Ministerial Conference (MC12), which on their issues and thwart the continued Analysis is scheduled to begin on 28 November attempts by the industrialized countries in Geneva, said people familiar with the to divide them, there is little likelihood Who is really at the table when global developments. of any progress on the 10 developmental tax rules get decided? — p10 The developing and least-developed issues above, said people familiar with the countries have consistently raised around developments. 10 developmental issues in the run-up to The “us and them” divide on the MC12: 10 issues was starkly witnessed at the 1) a temporary TRIPS waiver to combat WTO General Council (GC) meeting the COVID-19 pandemic; on 27-28 July before the summer break. 2) a permanent solution for public Among others, one outstanding issue stockholding programmes for food that has been on the table for more than security purposes in developing 20 years, namely, the 1998 multilateral countries; work programme on e-commerce, faced 3) the multilateral work programme on a frosty response at the GC from the so- electronic commerce; called “us” group led by the EU, Canada, THIRD WORLD ECONOMICS 4) the WTO’s response to the COVID- Australia and the US. is published fortnightly by the Third 19 pandemic; World Network (TWN), an independent 5) trade-related challenges of the E-commerce work programme non-profit international research and LDCs; advocacy organization involved in 6) core developmental concerns in During the GC meeting, India and bringing about a greater articulation of the proposed fisheries subsidies South Africa underscored the need the needs, aspirations and rights of the agreement; to review the current moratorium on peoples in the South and in promoting 7) the G90’s 10 agreement-specific imposing customs duties on electronic just, equitable and ecological proposals for making special and transmissions on account of several development. differential treatment (S&DT) simple developments that have taken place over Editor: Chakravarthi Raghavan and effective; the past 22 years. (8) the legal status of the plurilateral India said that while digital Editorial Assistants: Lean Ka-Min, T. Rajamoorthy, Chee Yoke Heong Joint Statement Initiatives (JSIs); infrastructure plays a significant (9) strengthening the multilateral role during the ongoing COVID-19 Visit our website at https://twn.my/ character of the WTO; and pandemic, there is also a widening digital

2 CurRent Reports I WTO Third World ECONOMICS No. 730, 1-15 September 2021 divide among countries. Further, the WTO bodies – the Council for Trade definition and scope, be clarified to WTO members are yet to comprehend in Goods, the Council for Trade in enable a common understanding on the implications of e-commerce on Services, the Committee on Trade and e-commerce. “competition and market structures; Development, and the TRIPS Council. It is regrettable, said South Africa, issues related to transfer of technology; South Africa emphasized the to see lack of commitment to the data storage; automation and its impact on need for structured discussions in the developmental aspects of the WTO- traditional jobs; and gaps in e-commerce GC on: (1) developmental aspects of mandated work, and “we are concerned policy and regulatory frameworks in e-commerce; (2) scope, definition and that this is increasingly contributing to developing countries, including LDCs”. impact of the moratorium on customs lack of progress in the WTO.” India said it is time to review the duties on electronic transmissions; (3) It cautioned against attempts to 1998 decision to have the moratorium examination of the challenges experienced expand the definition of electronic on customs duties on e-commerce, as the by developing countries and LDCs in transmissions, which will have significant decision was taken without consensus on relation to e-commerce; and (4) exploring revenue and industrialization implications the scope of the moratorium and without ways of enhancing the participation of for developing countries. any understanding of the unfolding developing countries in e-commerce. A UN Conference on Trade and digital revolution. Development (UNCTAD) paper Since then, the moratorium has been (UNCTAD Research Paper No. 47, June extended on the commitment that the 2020) estimated that total imports of 1998 work programme on e-commerce India said the services via Mode 1 amounted to $705 “will be reinvigorated, to achieve clarity billion in 2017 while total imports of on various issues, including the scope developing digitizable products were around $80 of the moratorium and its impact on billion. The paper also estimated the members’ policy space and revenues,” countries and LDCs potential losses from the moratorium India said. However, there has been little to be up to $10 billion per annum for progress in the discussions on the work are bearing the developing countries and $289 million programme. for advanced economies. These forgone India said that during the coming brunt of the impact revenues to developing countries are set to few months before MC12, members need exponentially increase with the increasing to engage constructively on various issues of the moratorium digitization of goods, including advances under the work programme. in 3D printing technologies. It is important to have “a clear by “extending At the GC meeting, South Africa understanding on the scope of the alluded to the narrative being advanced moratorium, to enable us to make an duty-free, quota- by the developed countries that such informed decision on extension or revenue losses can be evened out by otherwise of the moratorium in the free market internal taxes or compensated for by upcoming Ministerial Conference,” India dynamic gains. This narrative, it said, stated. access, largely for ignores the principal purpose of customs A reconsideration of the moratorium duties as an industrial policy tool that is critical for developing countries to the developed can and indeed should also be deployed preserve their “policy space to regulate to foster the development of local digital imports, generate revenue through countries.” economies. a simple and direct instrument such The WTO’s e-commerce work as customs duties and achieve digital programme is designed to adopt a industrialization,” India said. It said that the pandemic has comprehensive and holistic approach to It called on the proponents of the highlighted the enormous gap in access e-commerce to ensure equitable benefits moratorium to provide specific evidence to digital technologies, laying bare the for all, South Africa said, arguing that the of benefits, including with regard to problems of the digital divide both between reinvigoration of the work programme development of the digital economy. and within countries. Emphasizing the is critical to securing the development India said the developing countries critical role played by technology in dimension of the longstanding area of and LDCs are bearing the brunt of the achieving the United Nations Sustainable work in the multilateral framework of the impact of the moratorium by “extending Development Goals (SDGs), it argued WTO, including digital industrialization duty-free, quota-free market access, that to harness its potential, rapid action and the need to address the digital largely for the developed countries. We, is needed to close the digital divide and divide. therefore, need further discussions on promote inclusion. The African Group of countries, the this issue.” Therefore, the issues raised in the African, Caribbean and Pacific (ACP) India also called for maintaining e-commerce work programme remain Group, and many other countries strongly the e-commerce work programme as critical to achieve this objective, South supported the call for reinvigorating a standing item on the agenda of the Africa said. It underscored that only the work programme in order to have GC meetings before MC12. It said it is through a truly multilateral process can a clear idea about the impact of the important to reinvigorate work on the issues identified by members under the moratorium. work programme in all the four related work programme, such as classification, In contrast, the US, the EU, Australia,

3 CurRent Reports I WTO Third World ECONOMICS No. 730, 1-15 September 2021

Singapore and other members of the implications of the moratorium”, without divide that is contributing to growing plurilateral JSI on digital trade opposed however citing these studies. inequalities, particularly during the any change in the current moratorium. The EU said that while members COVID-19 pandemic. Digital monopolies The US apparently said that it wants had decided to extend the moratorium such as Google, Amazon, Facebook, a permanent moratorium on customs until MC12, it hopes that they “will be in Apple and Microsoft, which have made duties on electronic transmissions while a position to consider a longer-term – if billions in profits during the pandemic opposing the retention of the 1998 work not permanent – extension at the next but paid little tax, must be subjected to programme as a standing item on the GC Ministerial Conference.” customs duties to level the playing field agenda, according to people present at In short, the developed countries with the exporters of physical goods, said the GC meeting. seem determined to stymie any progress the analysts. The EU said that the moratorium on the issues of scope and definition In conclusion, it appears clear that “provides the predictability and security of electronic transmissions as well as unless there is unity of purpose among that our consumers and businesses – in addressing the revenue implications of the many developing countries and LDCs in both developed and developing countries moratorium, said people who preferred the next three months leading to MC12, – need when engaging or planning to anonymity. these countries could face the prospect engage in e-commerce.” It maintained According to analysts, the developing of having their interests being squashed that several studies “provided solid countries need to advance their digital permanently, said analysts who asked not new evidence on the positive economic industrialization in the face of the digital to be quoted. (SUNS9407)

TWN Environment & Development Series No. 21 “Nature-based Solutions” and the Biodiversity and Climate Crises

By Doreen Stabinsky

“Nature-based solutions” (NbS) have been defined as “actions to protect, sustainably manage and restore natural or modified ecosystems that address societal challenges...”. The societal challenge to which NbS are most commonly applied at present is the mitigation of climate change.

In this context, emissions of the greenhouse gases that cause global warming, such as carbon dioxide, are sought to be offset by safeguarding forest, soil and other ecosystems which can remove and store atmospheric carbon. While this approach has attracted corporate interest and spawned a huge market for carbon offset credits, the mitigation potential of nature is limited. To effectively counter climate change, there is thus no avoiding the need to reduce emissions to as close to zero as possible.

Despite their shortcomings, carbon markets and the NbS model have also been held out as a means of financing conservation of biological diversity. Appropriating forests and lands to serve such NbS strategies, however, threatens to dispossess the indigenous peoples and local communities who are the true stewards of the planet’s biodiversity.

In light of the dangers and drawbacks of turning to “nature-based Available at https://twn.my/title/end/pdf/ solutions”, this paper poses the question: Whose nature is being asked end21.pdf to solve which problems?

4 CurRent Reports I Commodities Third World ECONOMICS No. 730, 1-15 September 2021

monetary, macro-prudential and social LAC economies need to boost their policies and their associated institutions) with a view to increasing the resilience of resilience amid commodity price LAC economies to the impacts of future exogenous shocks, such as commodity price fluctuations, capital flow volatility hike and others.

While the recent rise in commodity prices may benefit commodity- Commodity price movements exporting countries in Latin America and the Caribbean, it also highlights the importance of enhancing these economies’ resilience The study noted that in recent in the face of future price swings, says a UN development agency. months, commodity prices across the board have increased significantly. This is an important development for the LAC by Kanaga Raja countries since commodity sectors play a vital role for many economies in the region, it said. According to UNCTAD, a country is export commodity-dependent when GENEVA: The recent commodity price in the commodity-dependent developing commodities account for 60% or more hikes and the high level of uncertainty countries (CDDCs) of the region will of its total merchandise export revenue. regarding future commodity market also be heterogeneous, said the study. Under this criterion, all countries in developments underscore the need to This is compounded by differences in South America as well as Jamaica and boost the resilience of economies in terms of public indebtedness, domestic Belize can be classified as commodity- Latin America and the Caribbean (LAC) policy environments and other socio- dependent developing countries. to the impacts of future shocks, such as political-economic factors impacting on This means that 14 out of 33 countries commodity price fluctuations and capital macroeconomic variables. (42%) in the LAC region are commodity- flow volatility. “Also, for countries in the LAC dependent. Additionally, seven countries This is one of the main conclusions region that import substantial amounts of in the region do not meet the 60% highlighted by the UN Conference on basic commodities such as food and fuels, threshold but have a commodity share Trade and Development (UNCTAD) in a persistently high commodity price levels of 50-60% so that the commodity sectors new study titled “The Recent Commodity could cause additional issues such as cost play a major role in their economies. Price Surge: A Boon for Latin America pressures on prices and a rise in poverty For the 14 CDDCs in the LAC region, and the Caribbean?”. and food insecurity.” said UNCTAD, the average (median) According to the study, commodity The study said that volatility is likely share of the leading commodity group prices as a group have increased from to remain a challenge for CDDCs in the in total merchandise exports was 27.0% the start of the COVID-19 pandemic LAC region. It noted that commodity price (24.2%) in the period 2015-19. in December 2019, and especially with swings are accompanied by movements The 14 LAC CDDCs cited by the respect to the floors attained by several of key macroeconomic indicators such study are Argentina, Belize, Bolivia, individual commodities in the first half as GDP growth, trade balances, debt Brazil, Chile, Colombia, Ecuador, Guyana, of 2020. However, there has been a wide positions and exchange rates. Also, LAC Jamaica, Paraguay, Peru, Suriname, heterogeneity across groups and especially countries that import key commodities Uruguay and Venezuela. individual products. such as food and energy are prone to Highlighting the impact of the It said that while many different shocks and volatility transmitted via COVID-19 pandemic on the different supply and demand factors are behind global commodity markets. commodity prices, the study said firstly, the recent commodity price increases, “Unquestionably, the near-term Energy was the only commodity group the roles of two key drivers are worth priority for LAC countries is to rebuild that suffered a severe decline in early highlighting. First, the recovery in world their economies after the shock of the 2020 following the onset of the pandemic, economic activity as countries advanced in COVID-19 pandemic,” said UNCTAD. with a price decline of 61.5% in real terms their vaccination efforts and subsequently In this context, it said high commodity in the four months from January-April removed a number of movement prices, if they are persistent, may provide 2020. Minerals and Metals experienced a restrictions. Second, the improvement a welcome boost for commodity exporters much smaller decline (14.7%) during the in investor and consumer expectations in the region. However, the study pointed same period, and prices of the Food and also contributed to commodity price out, the recent commodity price hikes and Beverage groups were little affected. The increases, in particular for energy, and the high level of uncertainty regarding prices of commodities like soybeans and mineral and metal commodities. future commodity market developments arabica coffee were not affected except for The different degrees of commodity are a reminder that, over the medium an increase in short-term volatility. dependence across the LAC region and longer term, it is also important to These developments reflect the indicate that the impacts of commodity strengthen domestic institutions and impact of the movement restrictions that price increases on trade and GDP growth policy frameworks (including fiscal, were imposed around the world in 2020

5 CurRent Reports I Commodities Third World ECONOMICS No. 730, 1-15 September 2021 to slow the spread of COVID-19, which iron ore and aluminium experienced some commodity futures markets. More affected in particular energy prices, and significant price increases, with iron ore recently, policy announcements such as the increase in uncertainty that brought showing the largest increases. on the United States and European Union about a slowdown in investment, which Among food commodities, there were COVID-19 stimulus packages worth $1.9 affected the prices of minerals and metals, large price increases for maize, soybeans trillion and €750 billion, respectively, may said the study. and products of the latter (soybean oil have also supported a favourable outlook “Second, what is extraordinary about and soybean meal), which drove the price among investors and consumers on near- the drop in energy prices was not only increase of the Food commodities group. term recovery and growth. its size but also its speed: the 61.5% real In the Beverages group, coffee UNCTAD said in light of price decline in four months was identical experienced moderate price increases recovering world economic activity, in terms of percentage and speed (but (from a relatively low base) caused by positive expectations and expansive smaller in terms of price declines, due to supply issues during the period and macroeconomic policies, including fiscal base differences) to the hitherto largest increasing demand. For cocoa, the stimulus, packages relaxing monetary and fastest fall in energy prices, which combination of supply-side developments policy and a number of supply-side occurred between August and December like bumper crops in West Africa with factors, it is no surprise that commodities 2008 as a result of the global financial reduced grindings in key markets during linked to construction and infrastructure, crisis,” said UNCTAD. the pandemic, resulted in prices in June like iron ore, coal and copper, have been Third, recent price increases for the 2021 that were 7.8% less in real terms among the most dynamic commodities in Minerals and Metals, Food and Energy than prices at the start of the pandemic in terms of price increases. groups resulted in real price levels in June December 2019. It also noted that longer-term trends 2021 previously not seen since September such as the rapid growth of the market 2011, June 2014 and October 2018, Factors affecting commodity price for low-carbon energy technologies and respectively. For Minerals and Metals, hike electric vehicles are starting to impact commodity group prices in June 2021 the demand for minerals. For instance, were 22.5% below the peak levels attained According to the study, a number of battery production is already the largest in March 2008 before the global financial broad-based factors played a role in the end use for cobalt and lithium and is crisis. Similarly, for the Food commodity recent increase in commodity prices. absorbing increasing shares of the market group, prices in June 2021 were 25% below It said the acceleration of world for class-I nickel. The global electric car the peak prices reached in June 2008. economic activity has boosted the demand stock increased by 43% in 2020 and is However, Energy prices are at present far for energy and metal commodities. The expected to increase more than 10-fold below the levels registered pre-financial spread of the pandemic was accompanied through 2030. Furthermore, the share of crisis, in part due to expanding supply of by severe restrictions of contacts and renewables in the global energy mix has gas and petroleum during the last decade, movements around the globe, leading to increased from 27% in 2019 to 29% in including due to fracking. a decline in economic activity. Pointing 2020. While prices of all commodity groups to the beginning of a recovery in world UNCTAD also observed that the increased with respect to the beginning economic activity starting in the second recent increases in food prices are due of the COVID-19 emergency, there was quarter of 2020 and accelerating in the first to a number of factors affecting market significant heterogeneity in terms of quarter of 2021 as vaccination campaigns fundamentals, as well as production costs the magnitude of price increases across took off around the world, the study noted around the world. different commodity groups. that the growth in economic activity has First, rising energy prices contribute On the one hand, prices of Minerals been backstopped by expansive monetary to higher agricultural production costs and Metals increased by 53.3% since the and fiscal policies across the board and both directly, through fuel price increases, start of the COVID-19 pandemic and the progressive lifting of restrictions of and indirectly, through the rise in fertilizer prices of Food increased 27%. On the movement and activities. prices. In the same vein, higher energy other hand, prices of Beverages and Raw For steel production, the recovery of prices have driven up transportation Materials only increased 4.7% and 4.5%, the Chinese economy played a key role costs, which have added to the upward respectively. as the country accounted for 56.7% of pressure on food commodity prices. Energy prices have increased by the global production of crude steel and Second, supply uncertainties have 15.6% since the start of the pandemic and 56.2% of the global consumption of steel contributed to increasing prices of certain doubled with respect to the minimum products in 2020. agricultural commodities. For example, levels registered in April 2020. In parallel to the increase in world drought conditions have led to downward Prices of commodities in the Precious economic activity, there has been an revisions of the maize production Metals group increased continuously improvement in investor expectations as forecast for the 2020/21 growing season during the pandemic, buoyed by investor indicated by the reduction in the volatility in Brazil, one of the world’s largest maize demand as a safe asset in the face of in international financial markets. The exporters. expansive monetary policies around the study said that reduced volatility and Third, rising global demand has world and the increase in uncertainty due improved investor expectations have caused the supply-demand balance to to the pandemic. also led to increased attractiveness of tighten for a number of food commodities. Within the Minerals and Metals commodities as an asset class, pushing up For instance, global utilization of soybeans group, three key commodities like copper, the number of transactions and prices in and maize is expected to outweigh global

6 CurRent Reports I Commodities Third World ECONOMICS No. 730, 1-15 September 2021 production in the 2020/21 marketing increase in uncertainty. stagnant or (in some cases) even falling season, leading to a reduction of global The study observed that commodity export volumes. For instance, Brazil’s Free stocks. price movements impact the fiscal balance On Board export revenue from oilseeds The study noted that the increase not only through their effects on the in the first six months of 2021 was 24.3% in commodity prices took place despite economic cycle but also through their link higher than in the same period of 2020 the appreciation of the US dollar with fiscal revenue both directly (when although exported volumes were slightly against other currencies like the euro or exports are taxed or public firms engage lower in the first half of 2021 with respect renminbi, starting in the second quarter in commodity export) and indirectly (e.g., to the same period in 2020. Similarly, of 2020. However, further appreciation via income taxes on exporting firms). Chile’s export revenue from copper ores of the US dollar, for example, as a result and concentrates was 48.8% higher in the of tightening of interest rates to contain first half of 2021 than in the first half of inflationary pressures, may dampen 2020, while exported volumes had only further commodity price increases. increased by 4.4%. Overall, given the persisting Given the persisting On the other hand, said the study, uncertainty regarding the evolution of commodity price increases have a the pandemic, in particular regarding uncertainty negative effect on the trade balances of the impact of the new virus variants, it net commodity importers in the LAC can be expected that commodity prices regarding the region, such as those importing energy will remain volatile in the near future, the and food commodities. For example, study underlined. evolution of the Costa Rica’s Cost Insurance and Freight cereal import bill during the first five Possible impact on LAC economies pandemic, it can months of 2021 was 34.8% higher than during the same period of 2020, while According to the study, most if not be expected that import volumes only increased by 5%. all countries in the LAC region rely on the Other countries in the LAC region such as production and export of commodities commodity prices El Salvador and Honduras also saw their as a source of economic growth through import bills for basic food commodities different channels. will remain volatile increase disproportionately with respect One channel operates through to imported volumes in the first half of investment in commodity sectors. In in the near future. 2021. particular, mining and energy are very Finally, commodity price movements capital-intensive sectors where foreign also result in changes in the nominal and direct investment plays a key role. real effective exchange rates of CDDCs Another channel operates via capital in the region, in particular for those inflows, which are often positively It noted that several studies have countries that are most closely integrated correlated with the commodity price found evidence of pro-cyclicality of fiscal with international capital markets and cycle. policy at different periods in different which follow more flexible exchange rate Also, public and private income and countries in the LAC region. For instance, regimes, said UNCTAD. In the past, there expenditure tend to follow commodity several CDDCs in the region experienced has been a close correlation between the cycles. As a result, the evolution of GDP falling debt-to-GDP ratios during the last evolution of nominal exchange rates of growth in LAC is correlated with the commodity price boom and rising debt- the domestic currencies of those countries observed evolution of commodity prices. to-GDP ratios thereafter. There exist large vis-a-vis the US dollar and the evolution For example, the (Pearson) correlation differences in debt-to-GDP ratio levels of the commodity prices of key export coefficient between changes in the between different countries of the region. commodities in each country. UNCTAD commodity prices index and UNCTAD said the recent commodity For example, the (Pearson) correlation the weighted average GDP growth of price increases can be expected to between the nominal monthly exchange CDDCs in LAC in the period 2000-20 have a positive impact on GDP growth rates of Chile, Peru and Colombia and indicates a linear correlation of 70% and public revenue in CDDCs in the the monthly real price index of Minerals between both variables and is statistically LAC region, which could contribute to and Metals (for Chile and Peru) and of significant with a 99% confidence managing public expenditure needs in Energy (for Colombia) for the period interval. the wake of the COVID-19 pandemic. January 2000-June 2021 was 63.7%, 64.4% The recent increase in commodity Another key impact of the recent and 68.9%, respectively, and in all three prices can be expected to strengthen the commodity price increases on CDDCs in cases, significant with a 99% confidence post-pandemic recovery of CDDCs in the the LAC region will be through the trade interval. LAC region, said UNCTAD. It said that a balance, said the study. This indicates that a commodity key risk factor to this positive outlook is For many commodity exporters price increase (decrease) of the relevant the emergence of new variants of SARS- in LAC, price increases have led to commodities for each country is CoV-2 and their potential to disrupt significant increases in commodity export closely associated with an appreciation economic activity in the region and revenues in the first half of 2021, relative (depreciation) of the nominal exchange across the globe, either directly or via an to the same period of 2020 and in spite of rate. (SUNS9407)

7 OPINION I Public health Third World ECONOMICS No. 730, 1-15 September 2021

partnerships, as urged by the World Privatized health services worsen Bank. The pandemic has exposed the results as grossly inadequate, ill-suited and vulnerable. pandemic Profitable private services remain parallel to and separate from the public Subjected to spending cuts and privatization, public health systems system. The reforms have not only are ill-equipped to respond to new health challenges, as COVID-19 undermined public health systems but has exposed to devastating effect. also weakened governments’ ability to cope. Even in rich countries, about 40% by Anis Chowdhury and Jomo Kwame Sundaram of health spending is now for private services. Neither privatization nor commodification has improved the quality of care, equity and efficiency Decades of public health cuts have quietly Clinton proudly declared the “era of big of public services. Thus, deregulation, taken a huge human toll, now even more government is over”. privatization and liberalization have pronounced with the pandemic. Austerity This “politics of small government” squeezed health access, raising morbidity programmes, by the International legitimized privatization of public and mortality. Monetary Fund (IMF) and World Bank, assets and services. Authorities have Meanwhile, donors have been have forced countries to cut public tripped over one another to privatize diverting aid from governments to non- spending, including health provisioning. potentially lucrative public sector duties governmental organizations (NGOs), and activities, while reducing taxes and especially “international” ones. But “Government is the problem” expenditure. patchworks of foreign-run NGOs are no COVID-19 has revealed the nature substitute for integrated national public “India’s COVID crisis: A deadly and purpose of neoliberal health spending healthcare systems. example of government failure”. reforms. New policies have included “Government failures still hamper [UK] privatization and contracting out public Austerity kills COVID-19 response”. Such headlines services. Social spending has not only have become commonplace as the been cut but also been used to pay private Analyses of economic shocks pandemic rages on, with no sign of suppliers. around the world, from the 1930s’ ending soon. Their godparents deserve Health system failures highlighted Great Depression to the 2008-09 Great due recognition. by the pandemic have been long in the Recession, show fiscal austerity kills. In UK Prime Minister Margaret Thatcher making. Four decades of neoliberal England since 2010, austerity has been claimed, “No government can do anything policies – including marketization, or linked to 120,000 more deaths and over [good] … people look to themselves first commodification of healthcare – have 30,000 suicide attempts. … There is no such thing as society … greatly increased private provisioning. Despite declining alcohol abuse the quality of our lives will depend upon Private healthcare provisioning and smoking, and without counting flu how much each of us is prepared to take in low- and middle-income countries and other epidemic fatalities, 100 “early responsibility for ourselves and each of us (LMICs) took off in the 1990s. It gathered deaths” daily were expected in the UK, prepared to turn round and help by our pace after the 2008-09 global financial even before the pandemic. Social security own efforts those who are unfortunate.” crisis with more hedge fund and other cuts have also been devastating. US President Ronald Reagan declared, investments in hospitals and allied health Despite growing patient demand and “Government is not the solution to our services. rising healthcare costs, during 2010-20, problem; government is the problem.” Such provisioning now accounts for the UK National Health Service suffered Inspired by them, government capacities most health services in many LMICs, the “largest sustained fall in … spending and public sectors have been decimated catering mainly to medical tourists as a share of GDP in any period” since its in recent decades, ostensibly to liberate and patients with means. Thus, profit creation after the Second World War. entrepreneurship and progress. considerations and financial markets have Earlier, Greece’s 2010 austerity Four decades of defunding, remade LMICs’ national health systems. package required cutting its national delegitimization and demoralization of Increasingly privatized and health budget by 40%. Infant mortality governments and their personnel since outsourced, public health systems rose 40% after some 35,000 doctors, Thatcher and Reagan have taken their in developing countries have been nurses and other health workers lost their toll. Unsurprisingly, most governments underfunded, undermined and jobs. have failed to respond more adequately to understaffed. Fractured health systems, As Greeks avoided routine primary the pandemic. with poor governance and regulation, healthcare due to long waits and rising To justify social spending cuts, have become even less able to respond drug costs, hospital admissions soared. politicians of various hues the world well to new challenges. Meanwhile, mosquito eradication over have been parroting mantras Such changes have been promoted programme cuts led to a resurgence of that government is too big and bad. by new aid-sponsored financial malaria. “New Democrat” US President Bill arrangements, such as public-private Austerity also worsened Ebola in West

8 OPINION I Public health Third World ECONOMICS No. 730, 1-15 September 2021

Africa. Cutting public health spending Government not main problem and fiscal capacities in the Global from 1990, Guinea, Liberia and Sierra South limited, the pandemic will drag Leone further weakened their already Health threats posed by the on, further setting back progress and poor health systems, undermining their pandemic have not been well addressed worsening inequalities. ability to cope with emergencies. Thus, by the reforms of recent decades. Some Meanwhile, Thatcher and Reagan in the year before the Ebola outbreak, have been made worse, with LMICs still haunt us all until the world exorcises Guinea spent more on debt repayment particularly hard hit by COVID-19. their ghosts forever. (IPS) than public health. Unsurprisingly, confidence and trust in Meanwhile, austerity-driven funding governments everywhere have dipped. Anis Chowdhury, Adjunct Professor at cuts to the World Health Organization In fact, public health investments Western Sydney University (Australia), held (WHO) by the US, the UK and European before the pandemic were projected to senior United Nations positions in New York governments critically delayed responses yield three times as much in economic and Bangkok. Jomo Kwame Sundaram, to the Ebola outbreak, worsening it. growth. Thus, such spending would have a former economics professor, was UN Funding shortages also set back needed not only saved lives but also accelerated Assistant Secretary-General for Economic WHO efforts to respond to future global economic expansion. Development, and received the Wassily health crises. With COVID-19 endemic, and most Leontief Prize for Advancing the Frontiers of government pandemic containment Economic Thought in 2007.

Rethinking Global Economic Policy Proposals on Resilience, Rights and Equity for the Global South

By Kinda Mohamadieh, Bhumika in developing countries and, Muchhala, Ranja Sengupta, Celine beyond this, an overhaul of the Tan and Vicente Paolo Yu unjust structures underpinning the global economy. This report The COVID-19 crisis has thrown surveys a myriad of areas – into stark relief the inequities from trade, debt and public and iniquities of an international finance to investment and economic order that consigns the intellectual property rights – Global South to the development where fundamental reform and margins while augmenting the rethink of international policy power of rich countries and firms. regimes is urgently required for Available at https://twn. Redressing this demands a bold the developing world to emerge my/title2/books/pdf/ multilateralism to support public stronger and more resilient from Rethinking%20Global%20 health and economic recovery the present turmoil. Economic%20Policy.pdf

9 Analysis I Taxation Third World ECONOMICS No. 730, 1-15 September 2021

Who is really at the table when global tax rules get decided? International tax negotiations lack inclusive participation, with the likely outcome being global tax standards that are designed by and in the interests of the richest countries. by Tove Maria Ryding

In 2016, the Organisation for Economic Co-operation and Inclusive Framework is 122, the total number of members is Development (OECD) established a so-called Inclusive 139.13 The explanation for this difference is that over 10% of Framework, which was mooted as a place where all countries the Inclusive Framework members are jurisdictions rather than could join discussions on international tax rules. This was to countries.14 These include, for example, 10 overseas territories spearhead the implementation of the package on Base Erosion and crown dependencies of the United Kingdom, such as and Profit Shifting (BEPS), which had just been agreed by the Cayman Islands, Bermuda, Jersey and the British Virgin the OECD and the Group of 20 (G20), and it was to be the Islands. forum where any further changes to global tax rules would be negotiated.1 This forum is now a central part of the discussion Global agreement? about rules in response to the digital economy. However, there are reasons to question whether the forum is as inclusive as its In discussing the inclusiveness of global tax decision- name suggests, and whether the forum really is the place where making, it is vital to consider not only how many countries have the rules are being negotiated. agreed to a specific decision, but also how many have not. In this context, the fact that the Inclusive Framework membership Inclusive Framework? includes jurisdictions that are not countries gives rise to some confusion. In July 2021, following the issuance of an Inclusive The Inclusive Framework allows interested countries to Framework statement regarding the future of the global tax become members, but not without conditions. In particular, the system, the Secretary of the Treasury of the United States, Janet countries have to commit to following the OECD/G20 BEPS Yellen, sent out an announcement stressing that the Inclusive agreements from 2015.2 This package of agreements, which Framework statement was an “agreement by 130 countries”.15 runs to almost 2,000 pages, was negotiated through a process However, while still a significant number, the agreement was in from which over 100 developing countries were excluded.3 fact by less than 120 countries, since out of the 122 countries Each member of the Inclusive Framework must also commit to that are members of the Inclusive Framework, several, including paying a yearly membership fee of around €20,000 to the OECD large African countries such as Kenya and Nigeria, chose not to secretariat, which leads the process.4 The OECD, which is also support the agreement.16 known as the “rich countries’ club”, has a membership of 38 Even in the case where all Inclusive Framework members primarily developed countries,5 and it is not uncontroversial that do reach an agreement, and despite the fact that the framework it is this body that hosts the Inclusive Framework. includes a high number of countries, it is important to keep As of July 2021, 122 countries have chosen to become bearing in mind that over one-third of the world’s countries members of the Inclusive Framework.6 In comparison, the are not participating in the negotiations. It is also vital to note United Nations (UN), which is considered a near-universal body, that developing countries are strongly overrepresented among has a membership of 193 countries as well as two permanent the countries that are absent from the Inclusive Framework observers.7 In other words, more than one-third of the world’s negotiations, and that approximately half of the absent countries countries are not at the table in the Inclusive Framework.8 fall in the category of least-developed countries.17 Therefore, The differences become more extreme when looking at it would be incorrect to consider decisions by the Inclusive specific sub-groupings of countries. For example, out of the 54 Framework to be “global agreements”, as for example the countries in Africa, less than half are members of the Inclusive countries in the Group of 7 (G7) seem to do.18 Framework.9 For the group of least-developed countries (LDCs), 36 out of 46, meaning over 75%, are not members.10 Meanwhile, Rule makers and rule takers for both of these groups, 100% are members of the UN. Furthermore, through their many years of engagement with the In 2016, when the Inclusive Framework was set up by the G20 UN, they are now established with permanent representatives, and OECD, it was stressed that all members should participate and organized in their respective negotiating groups – the “on an equal footing”.19 The reality of this was questionable from African Group11 and the LDC Group.12 These groups play a key the onset, since no country would be able to become a member role in strengthening the capacity and collective impact of their unless it signed up to implementing the OECD/G20 BEPS members in UN intergovernmental negotiations. package.20 Since this package was so central to the overall agenda While the number of countries that are members of the and outline for the Inclusive Framework,21 it could be argued

10 Analysis I Taxation Third World ECONOMICS No. 730, 1-15 September 2021 that the members were – from the very beginning – divided into The alternative – a UN-led intergovernmental process those that had made the rules, and those that had accepted to and convention take the rules as they were. In the negotiations on new global tax rules in response to There is an obvious alternative to the current international the digital economy, inequalities in the roles of countries have governance on global tax issues, and that is to let the UN also appeared. Firstly, the entire negotiating process was, as in be the forum where global tax standards are set. Leading the case of the BEPS negotiations, mandated by the G20 and intergovernmental negotiations on global issues is a key part led by the secretariat of the OECD.22 While all members of the of the UN mandate,31 and is the role that the body plays on framework are, at least on paper, equal, this puts more political numerous other issues, including on climate change, human power in the hands of the members of those two bodies. rights, gender equality and sustainable development goals. Especially in the first half of 2021, the G7 also emerged as a For over a decade, the Group of 77 (G77), which is a forum where a small group of rich countries can make decisions coalition of over 130 developing countries,32 has raised concerns ahead of the Inclusive Framework meetings, which then seem about the lack of an inclusive intergovernmental forum for tax to be passed on to be tweaked and slightly adjusted, but not cooperation and called for an intergovernmental UN tax body fundamentally altered. The key example of this is the decisions to be established.33 that were made by G7 finance ministers and leaders in June In 2011, the Secretary-General of the UN published 2021,23 which seemed to have exerted a strong sway over the a report outlining options for strengthening international outcome of the Inclusive Framework meeting in July 2021.24 tax cooperation. This included several proposals on how an Ninety percent of the world’s countries are not members of intergovernmental UN tax body could be designed with the the G20, and even fewer are members of the G7. Therefore, the aim of creating a “global, all-inclusive body for international tax vast majority of the world’s countries are not at the table when cooperation, which would further this cooperation in a fair and these bodies make decisions. Within the G7, it is also clear that balanced way by offering the developing countries a full ‘seat at the US has a very powerful role, and the G7 outcome from June the table’, and working with others active in this area”. The report 2021 had a very significant overlap with the proposals launched also stressed that “Because of its universal membership and by the US government in Spring 2021.25 legitimacy, the United Nations is the most appropriate forum In theory, the Inclusive Framework operates by consensus, to host this body.”34 In 2015, as part of his Synthesis Report and each member should therefore be able to reject a proposal on the Post-2015 Agenda, the Secretary-General stressed that for a decision. This was, however, brought into question when “Member States should consider … the establishment of an Pascal Saint-Amans, Director of the OECD’s Center for Tax intergovernmental committee on tax cooperation, under the Policy and Administration, gave an interview where, among auspices of the United Nations.”35 other things, he described the decision-making process at The key reason why such a body has not yet been established the Inclusive Framework in the following way: “Now, we are is resistance from OECD countries. During the Financing for pragmatic. If you have all the big guys and a significant chunk Development Summit in Addis Ababa in 2015, the G77 made of the small guys saying ‘yes we [should] do it,’ then the thing the call for a UN intergovernmental tax body a key demand, but happens. Everyone must be involved, though.”26 In this context, it was once again rejected by OECD countries.36 it is also worth noting again that the July 2021 statement by the The resistance from some OECD countries has, however, Inclusive Framework was not agreed to by all members.27 not made the discussion go away, and in fact, some countries An approach where smaller clubs of rich and powerful have expanded the proposal to include a UN Convention on Tax. countries steer the outcome of Inclusive Framework negotiations During a UN high-level meeting on combating illicit financial raises some specific concerns. Especially for smaller and less flows in May 2019, Senegal, speaking on behalf of the African rich and powerful countries that are members of the Inclusive Group, called for “the upgrading of the existing committee of Framework but not of the powerful decision-making clubs, it experts in tax matters to a universal intergovernmental body brings the risk that they will be pressured into agreements that under the auspices of the UN with a mandate to deal with all do not reflect their views and interests. It also brings the risk of aspects of [illicit financial flows].” In the statement, Senegal also generating outcomes of the Inclusive Framework negotiations highlighted that the African Group believes existing UN tools do that are biased in favour of a particular group of countries. “not sufficiently cover illicit flows emanating from tax avoidance, Civil society organizations (CSOs) have previously raised trade misinvoicing, profit shifting and other illegal commercial concerns that inputs from developing countries were not given activities, especially those by multinational enterprises,” proper consideration nor reflected in the negotiating texts and added, “We therefore call for a separate international developed by the OECD secretariat as inputs to the Inclusive convention on tax. We believe that such a convention will serve Framework.28 At the same time, CSOs have flagged that when it as the backbone for our envisioned upgraded international comes to the question of which countries will have the right to tax committee, and will assist in tackling all aspects of [illicit tax the profits of multinational corporations, the new rules that financial flows].”37 are being sketched out by the G7 and the Inclusive Framework In 2020, the African Group reiterated this call on several include biases that favour the interests of richer and larger occasions, and in September 2020, the idea of setting up an countries, whereas in particular smaller developing countries intergovernmental UN tax body and negotiating a UN tax will be disadvantaged.29 This has led to several civil society convention was included in a “menu of options” produced under coalitions raising strong concerns, and some, especially from the leadership of the UN to consider how the international the Global South, calling for a rejection of the proposals put community could respond to the COVID-19 crisis.38 forward by the G7, OECD and its Inclusive Framework.30 In February 2021, the High Level Panel on International

11 Analysis I Taxation Third World ECONOMICS No. 730, 1-15 September 2021

Financial Accountability, Transparency and Integrity for system that works for everyone. The report reflects the views of Achieving the 2030 Agenda (the FACTI Panel), which had Eurodad and is not intended to represent the positions of other been set up by the Presidents of the UN General Assembly (at members of the FTC. the time Nigeria) and the UN Economic and Social Council (at the time Norway), issued its final report.39 Among its key Notes recommendations were: l Recommendation 2 (on Legitimacy): International tax 1 OECD, “Inclusive Framework on BEPS Progress Report norms, particularly tax-transparency standards, should be July 2016 – June 2017”, 2017, https://www.oecd.org/tax/ established through an open and inclusive legal instrument BEPS/inclusive-framework-on-BEPS-progress-report-july- with universal participation; to that end, the international 2016-june-2017.pdf community should initiate a process for a UN Tax 2 See OECD, “OECD/G20 Inclusive Framework on BEPS”, Convention. June 2018, https://www.oecd.org/tax/flyer-inclusive- l Recommendation 4A (on Fairness): Taxpayers, especially framework-on-beps.pdf multinational corporations, should pay their fair share of taxes. The UN Tax Convention should provide for 3 OECD, “OECD Secretary-General Report to the G20 effective capital gains taxation. Taxation must be equitably Finance Ministers and Central Bank Governors”, 2015, applied on services delivered digitally. This requires taxing http://www.oecd.org/g20/topics/taxation/oecd-secretary- multinational corporations based on group global profit. general-tax-report-to-g20-FMCBG-september-2015.pdf, The FACTI Panel’s report also stressed that “The international page 11. community must ensure that the norms they develop have broad 4 See OECD, “OECD/G20 Inclusive Framework on BEPS”, legitimacy by making sure that they are framed and negotiated in June 2018, https://www.oecd.org/tax/flyer-inclusive- an inclusive manner. That has not been the case for international framework-on-beps.pdf tax norms” and that “Proposed new rules on digital economy taxation at the OECD are excessively complex and not adapted 5 See https://www.oecd.org/about/members-and-partners/ to developing countries’ needs”. 6 OECD, “Members of the OECD/G20 Inclusive Framework on BEPS”, updated February 2021, accessed 15 July 2021, Conclusion https://www.oecd.org/tax/beps/inclusive-framework-on- beps-composition.pdf Non-inclusiveness and illegitimacy continue to be key concerns in relation to the negotiation of global tax rules. Despite 7 As of July 2021, 195 sovereign states are recognized by the name of the forum, over one-third of the world’s countries are the UN, of which 193 are UN member states and two are not members of the OECD-led Inclusive Framework. Developing permanent observers to the UN. See UN, “Member States”, countries are strongly overrepresented among the countries that https://www.un.org/en/member-states/; UN, “Non-member are not at the table, and approximately half of those that are absent States”, https://www.un.org/en/sections/member-states/ fall in the category of least-developed countries. Meanwhile, the non-member-states/index.html role of the G7 in global decision-making has become prominent, 8 Eurodad analysis of the list of members of the Inclusive and there are strong concerns about the fact that the new global Framework and the United Nations. See OECD, “Members tax rules, which are currently being negotiated at the Inclusive of the OECD/G20 Inclusive Framework on BEPS”, updated Framework, seem to be biased towards the interests of the richest February 2021, accessed 15 July 2021, https://www.oecd. and most powerful countries. org/tax/beps/inclusive-framework-on-beps-composition. The issue of lack of legitimacy and biases in international pdf; UN, “Member States”, https://www.un.org/en/member- tax rule-making is a very central part of the crisis of the global states/; and UN, “Non-member States”, https://www.un.org/ tax system. Global standards written by clubs with limited en/sections/member-states/non-member-states/index.html membership face great challenges when it comes to global implementation, and face a higher risk of individual countries, 9 Eurodad analysis of the list of members of the Inclusive or groups of countries, introducing rules that are not in line with Framework and the United Nations. See OECD, “Members the standards. This undermines the chances of achieving a stable, of the OECD/G20 Inclusive Framework on BEPS”, updated effective and coherent global tax system. Furthermore, global February 2021, accessed 15 July 2021, https://www.oecd. tax rules that are primarily designed by, and in the interests of, org/tax/beps/inclusive-framework-on-beps-composition. the richest countries will fail to deliver on the demand for a fair pdf; UN, “Member States”, https://www.un.org/en/member- global tax system, and thus continue to be subject to instability states/; and UN, “Non-member States”, https://www.un.org/ and calls for fundamental reforms. en/sections/member-states/non-member-states/index.html 10 Eurodad analysis of the list of members of the Inclusive Tove Maria Ryding is Policy and Advocacy Manager – Tax Justice Framework, the list of members of the United Nations and at Eurodad (European Network on Debt and Development). The the list of least-developed countries. See OECD, “Members above, reproduced from the Eurodad website (www.eurodad.org), of the OECD/G20 Inclusive Framework on BEPS”, updated was published as a report produced through Eurodad’s membership February 2021, accessed 15 July 2021, https://www.oecd. of the Financial Transparency Coalition (FTC), a global civil society org/tax/beps/inclusive-framework-on-beps-composition. network working to curtail illicit financial flows through the pdf; UN, “Member States”, https://www.un.org/en/member- promotion of a transparent, accountable and sustainable financial states/; UN, “Non-member States”, https://www.un.org/en/

12 Analysis I Taxation Third World ECONOMICS No. 730, 1-15 September 2021

sections/member-states/non-member-states/index.html; 21 See the descriptions of the Inclusive Framework as outlined and UN, “List of Least Developed Countries (as of 21 by the G20, “G20 Leaders’ Communiqué. Antalya Summit, February 2021)”, https://www.un.org/development/desa/ 15-16 November 2015”, https://www.consilium.europa.eu/ dpad/wp-content/uploads/sites/45/publication/ldc_list.pdf media/23729/g20-antalya-leaders-summit-communique. 11 See https://www.africanunion-un.org/africangroup pdf; and OECD, “Inclusive Framework on BEPS Progress Report July 2016 – June 2017”, 2017, https://www.oecd.org/ 12 See https://www.un.org/ohrlls/content/ldc-group-and- tax/BEPS/inclusive-framework-on-BEPS-progress-report- bureau july-2016-june-2017.pdf 13 OECD, “Members of the OECD/G20 Inclusive Framework 22 OECD, “Addressing the tax challenges of the digitalisation on BEPS”, updated February 2021, accessed 15 July 2021, of the economy”, Policy Note, approved by the Inclusive https://www.oecd.org/tax/beps/inclusive-framework-on- Framework on BEPS on 23 January 2019, https://www. beps-composition.pdf oecd.org/tax/beps/policy-note-beps-inclusive-framework- 14 Eurodad analysis of the list of members of the Inclusive addressing-tax-challenges-digitalisation.pdf Framework. See OECD, “Members of the OECD/G20 23 See G7, “G7 Finance Ministers and Central Bank Inclusive Framework on BEPS”, updated February 2021, Governors Communiqué”, 5 June 2021, https://www.gov.uk/ accessed 15 July 2021, https://www.oecd.org/tax/beps/ government/publications/g7-finance-ministers-meeting- inclusive-framework-on-beps-composition.pdf june-2021-communique/g7-finance-ministers-and-central- 15 US Department of the Treasury, “Statement from Secretary bank-governors-communique; and G7, “Carbis Bay G7 of the Treasury Janet L. Yellen on Today’s Agreement of Summit Communiqué. Our Shared Agenda for Global 130 Countries to Support a Global Minimum Tax for the Action to Build Back Better”, June 2021, https://www.g7uk. World’s Largest Corporations”, 1 July 2021, https://home. org/wp-content/uploads/2021/06/Carbis-Bay-G7-Summit- treasury.gov/news/press-releases/jy0255 Communique-PDF-430KB-25-pages-3-1.pdf 16 Forbes, “The Beginning of the End? An Update on the OECD 24 OECD, “Statement on a Two-Pillar Solution to Address Tax Reform Plan”, 27 July 2021, https://www.forbes.com/ the Tax Challenges Arising from the Digitalisation of the sites/taxnotes/2021/07/27/the-beginning-of-the-end-an- Economy”, July 2021, https://www.oecd.org/tax/beps/ update-on-the-oecd-tax-reform-plan/?sh=138a9fbd1e08 statement-on-a-two-pillar-solution-to-address-the- tax-challenges-arising-from-the-digitalisation-of-the- 17 Eurodad analysis of the list of members of the Inclusive economy-july-2021.pdf Framework, the list of members of the United Nations and the list of least-developed countries. See OECD, “Members 25 James Politi, Aime Williams and Chris Giles, “US offers new of the OECD/G20 Inclusive Framework on BEPS”, updated plan in global corporate tax talks”, Financial Times, 8 April February 2021, accessed 15 July 2021, https://www.oecd. 2021, https://www.ft.com/content/847c5f77-f0af-4787- org/tax/beps/inclusive-framework-on-beps-composition. 8c8e-070ac6a7c74f pdf; UN, “Member States”, https://www.un.org/en/member- 26 Julie Martin, “Unanimity not required to update global rules states/; UN, “Non-member States”, https://www.un.org/en/ for taxing multinational groups, OECD’s Saint-Amans says”, sections/member-states/non-member-states/index.html; MNE Tax, 18 October 2019, https://mnetax.com/unanimity- and UN, “List of Least Developed Countries (as of 21 not-required-to-update-rules-for-taxing-multinational- February 2021)”, https://www.un.org/development/desa/ groups-oecds-saint-amans-says-36188 dpad/wp-content/uploads/sites/45/publication/ldc_list.pdf 27 OECD, “Statement on a Two-Pillar Solution to Address 18 See paragraph 22 of the Communiqué of the 2021 G7 the Tax Challenges Arising from the Digitalisation of the Summit, in which the G7 countries outline their intention Economy”, July 2021, https://www.oecd.org/tax/beps/ to pursue a “global agreement … through the G20/ statement-on-a-two-pillar-solution-to-address-the- OECD inclusive framework”. G7, “Carbis Bay G7 Summit tax-challenges-arising-from-the-digitalisation-of-the- Communiqué. Our Shared Agenda for Global Action economy-july-2021.pdf to Build Back Better”, June 2021, https://www.g7uk.org/ wp-content/uploads/2021/06/Carbis-Bay-G7-Summit- 28 Joint CSO coalition, “Submission to the Public Consultation Communique-PDF-430KB-25-pages-3-1.pdf on the Reports on the Pillar One and Pillar Two Blueprints”, 14 December 2020, https://d3n8a8pro7vhmx.cloudfront.net/ 19 See G20, “G20 Leaders’ Communiqué. Antalya Summit, eurodad/pages/1939/attachments/original/1608200467/ 15-16 November 2015”, https://www.consilium.europa.eu/ Submission_to_the_Public_Consultation_on_the_ media/23729/g20-antalya-leaders-summit-communique. Reports_on_the_Pillar_1_and_Pillar_2_Blueprints. pdf; and OECD, “Inclusive Framework on BEPS Progress pdf?1608200467 Report July 2016 – June 2017”, 2017, https://www.oecd.org/ tax/BEPS/inclusive-framework-on-BEPS-progress-report- 29 See, for example, Alex Cobham, “Is today a turning july-2016-june-2017.pdf point against corporate tax abuse?”, 4 June 2021, https:// taxjustice.net/2021/06/04/is-today-a-turning-point- 20 See OECD, “OECD/G20 Inclusive Framework on BEPS”, against-corporate-tax-abuse/; and Oxfam, “OECD Inclusive June 2018, https://www.oecd.org/tax/flyer-inclusive- Framework agrees two-pronged tax reform and 15 percent framework-on-beps.pdf global minimum tax: Oxfam reaction”, 1 July 2021,

13 Analysis I Taxation Third World ECONOMICS No. 730, 1-15 September 2021

https://www.oxfam.org/en/press-releases/oecd-inclusive- development/desa/financing/document/report-secretary- framework-agrees-two-pronged-tax-reform-and-15- general-strengthening-institutional-arrangements- percent-global-minimum promote-international 30 See Tax Justice Network Africa, “African Civil Society 35 United Nations, “Synthesis Report of the Secretary-General Organizations Call for Rejection of G7 Global Tax Deal”, 6 on the Post-2015 Agenda”, 7 January 2015, https://www. July 2021, https://taxjusticeafrica.net/african-civil-society- un.org/en/development/desa/publications/synthesis- organizations-call-for-rejection-of-g7-global-tax-deal/; and report.html APMDD, “Statement: Asian Civil Society Organizations 36 Cécile Barbière, “Addis Ababa development financing Call to Reject the OECD/G20 Global Tax Deal”, 21 July 2021, conference stumbles on tax evasion”, EURACTIV, 17 July https://www.apmdd.org/programs/development-finance/ 2015, https://www.euractiv.com/section/development- tj/asian-civil-society-organizations-call-to-reject-the-oecd- policy/news/addis-ababa-development-financing- g20-global-tax-deal conference-stumbles-on-tax-evasion/ 31 United Nations, “United Nations Charter”, June 1945, 37 Senegal, speaking on behalf of the African Group at the UN https://www.un.org/en/about-us/un-charter/full-text high-level meeting on International Cooperation to Combat 32 See the website of the Group of 77 at the United Nations, Illicit Financial Flows and Strengthen Good Practices on https://www.g77.org/doc/members.html Asset Returns, 16 May 2019, New York. The full statement can be found here: http://webtv.un.org/watch/part-1-high- 33 See, for example, G77, “Statement of behalf of the Group of level-meeting-on-international-cooperation-to-combat- 77 and China by H.E. Minister Dr. Riyad Mansour (State of illicit-financial-flows-and-strengthen-good-practices-on- Palestine), Chair of the Group of 77, at the 2019 ECOSOC assets-return/6037733391001 (starting at 2:49:30). Forum on Financing for Development Follow-up”, 15 April 2019, https://www.g77.org/statement/getstatement. 38 United Nations, “Financing for Development in the Era php?id=190415c; and G77, “Statement on Behalf of the of COVID-19 and Beyond. Menu of Options for the Group of 77 and China by Mr. Waheed Al-Shami, Second Consideration of Heads of State and Government Part II”, Secretary, Permanent Mission of Yemen to the United September 2020, page 124, https://www.un.org/sites/un2. Nations, Following the Adoption of the Resolution on the un.org/files/financing_for_development_covid19_part_ii_ Committee of Experts on International Cooperation in Tax hosg.pdf Matters, at the 2010 Substantive Session of the Economic 39 United Nations, “Financial Integrity for Sustainable and Social Council”, 23 July 2010, https://www.g77.org/ Development. Report of the High Level Panel on statement/getstatement.php?id=100723 International Financial Accountability, Transparency and 34 United Nations, “Report of the Secretary-General on Integrity for Achieving the 2030 Agenda”, February 2021, ‘Strengthening of institutional arrangements to promote https://uploads-ssl.webflow.com/5e0bd9edab846816e263 international cooperation in tax matters, including the d633/602e91032a209d0601ed4a2c_FACTI_Panel_Report. Committee of Experts on International Cooperation in Tax pdf Matters’ (E2011//76)”, 18 March 2011, https://www.un.org/

Connect to https://twn.my/

Third World Network’s website for the latest on • International Relations • Environment • Agriculture • Science • Economics • Trade • Health • Education • Communications • Development • Indigenous Peoples • Medicine • Forestry

@3rdworldnetwork

14