November 29, 2022

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G20 Summit, a Missed Opportunity to Address the Global Cost of Living Crisis – Global Issues

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title=Statement by Matti Kohonen (London)Friday 18 November 2022Inter Press Service

The motto of the G20 was “Recovering Together, Recovering Stronger,” but the Joint Statement offered no alternatives to the wave of austerity that was sweeping the world. It ignored the ability to collect enough tax revenue from big corporations, tax the wealthy and tackle illicit financial flows and tax abuse, which alone account for over $200 billion a year in tax revenue from profit shifting in the Global South.

For one, the summit blocked any progress toward negotiations on a UN tax convention that would address the problems of corporate tax abuse and illicit financial flows, an open letter from the Asian People’s Movement for Debt and Development (APMDD) denounced.

In an open letter denouncing this inaction in tackling corporate tax abuse and IFFs and delivered to the embassies of Indonesia, India and Brazil, Lidy Nacpil of the Asian People’s Debt and Development Movement (APMDD) said the summit would “take any progress stalled toward negotiations for a UN tax treaty that would deal with corporate tax abuse and illicit financial flows,” but there was no response.

To make matters worse, the Organization for Economic Co-operation and Development (OECD) failed to fulfill its mandate to release country-by-country reports ahead of the summit. This would have made it possible to monitor the performance of mechanisms to prevent, for example, multinational companies from shifting profits to tax havens and avoiding paying taxes.

The data was not released until November 17, a day after the summit, which was too late to hold G20 leaders accountable. According to Alex Cobham, Director of the Tax Justice Network, “Without the transparency data, neither the Tax Justice Network nor other independent research institutes can assess how much each government is losing from multinational corporations’ abuses of corporate taxes, or progress made in reducing tax losses in the last years.”

But that’s not all, as the summit didn’t address the issue of hidden offshore wealth and kleptocracy. Transparency International’s Maira Martini said that G20 members “have struggled in recent years, failing to agree on key actions and failing to implement even those to which they had already committed. Meanwhile, the corrupt have consolidated wealth and power, allowing them to attack everything from sustainable development to global security to democracy.”

In an open letter published in the run-up to the Bali summit, Transparency International representatives from all G20 countries called on their governments to take immediate action against cross-border corruption. The joint statement reiterates its support for implementing the Financial Action Task Force (FATF) recommendations to improve financial transparency, but does not say that beneficial ownership registers should be public, a crucial element to enable stakeholders and public authorities enable to uncover hidden assets.

The declaration also included regional efforts related to the signing of the Asia Initiative Declaration in July 2022 on tax and financial transparency in Asia. However, it was not specified whether this initiative would create a stronger standard than the current OECD transparency standard or simply implement an OECD standard in the Asian regional context.

On the positive side, the Bali Joint Statement made a link between increasing information on beneficial ownership and combating crime against natural resources, but made no concrete proposals to solve this problem. Indonesia loses an estimated $4 billion in illicit financial flows (IFFs) each year from illegal, unregulated and unreported (IUU) fishing alone, while Africa loses an estimated $11.5 billion from these illicit activities. It would be crucial that beneficial ownership information of all vessels and fishing companies be recorded in a public register in order to hold those responsible for illegal fishing activities to account.

According to the United Nations, between 75 and 95 million people are expected to be plunged into extreme poverty this year due to the pandemic and the impact of rising inflation and war in Ukraine. Many others are struggling to make a living and support themselves while governments around the world impose painful austerity measures.

The G20 had the opportunity to offer solutions to these crises and a lifeline for struggling nations. Unfortunately for all of us, they failed.

Matti Kohonen is Executive Director of the Financial Transparency Coalition.

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© Inter Press Service (2022) — All rights reservedOriginal source: Inter Press Service

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G20 Summit, a Missed Opportunity to Tackle Global Cost of Living Crisis, Inter Press Service, Friday, November 18, 2022 (posted by Global Issues)

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