Fiscal space in developing countries: it is about revenues!
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- Written by Alexander Pick, OECD
- Category: Articles
Fiscal space is big right now. It was an important part of the OECD’s policy prescriptions in last year’s Economic Outlook and was high on the World Bank President’s agenda at this year’s Spring Meetings in Washington. It also featured in discussions at the 2017 Forum on Financing for Development in May. Yet the term has a different meaning depending on whether it is applied to a developed or a developing country, and it doesn’t appear to resonate with policy makers at a national level.
So what does fiscal space mean for developed economies? The OECD and IMF view the concept in terms of long-term debt sustainability. By this approach, fiscal space is interpreted as the distance between actual debt levels and a theoretical higher level of debt that is nonetheless safe. Fiscal space suggests how much wiggle-room national governments have to increase growth-enhancing spending, such as infrastructure investment, without raising taxes. This is important in the current context of a sluggish global economy where monetary policy has done all it can to support growth and the pressure is thus on fiscal policy and structural reform to propel the recovery.
Read more: Fiscal space in developing countries: it is about revenues!
Poverty in Industrialized countries: a priority for G7 and G20
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- Written by Samir Abir
- Category: Articles
The development of Africa has once again been subject of discussions of the G7 and G20 summits this year in Italy as well as in Germany. In their minds they are occupied with the question of how to address the “root causes of irregular migration” of tens of thousands of Africans to Europe. For both Italy and Germany, it is a question of facilitating investments by their business companies in Africa to create jobs with the illusion of being able to guarantee decent work to the 350 million young people aged 15 to 24 who populate the continent. Ironically, it was the same governments who, through the international financial institutions (IMF and World Bank) and through their Club of Creditor Countries (Club de Paris), pushed African countries to austerity programs called “adjustment” which have hitherto impeded the creation of viable jobs for African youth. It is hard to believe in the good faith of these new saviors of Africa who struggle to find a solution to the unemployment of theirs in Europe.
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ITUC Global Rights Index: Viiolence and Repression of Workers on the Rise
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- Written by ITUC
- Category: Articles
The number of countries experiencing physical violence and threats against workers has risen by 10 percent in just one year, according to the annual ITUC Global Rights Index. Attacks on union members have been documented in fifty-nine countries, fuelling growing anxiety about jobs and wages.
The report shows that corporate interests are being put ahead of the interests of working people in the global economy, with 60 per cent of countries excluding whole categories of workers from labour law.
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Transnational Companies: European Parliament demands Tax Transparency against Resistance from EU Member States
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- Written by Sven Giegold, MEP
- Category: Articles
This Monday, the committee on economic and monetary affairs (ECON) as well as the legal affairs committee (JURI) of the European Parliament voted on new tax transparency rules for transnational companies. The Commission suggested that transnational companies are required to publish key tax data on a country-by-country basis for the EU-28 as well as for countries blacklisted as tax havens. Data for other third countries should only be reported on an aggregated level. The text adopted today significantly improves the Commission proposal and brings more transparency (1). The Greens/EFA group would have favoured stricter rules than adopted in committee today. Therefore, we insisted on a plenary vote on the negotiation mandate of the European Parliament for the upcoming trialogue. MEP Sven Giegold, financial and economic policy spokesperson of the Greens/EFA group commented:
G20 Compact with Africa: neocolonialism or an opportunity for growth?
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- Written by Pride Nkomo
- Category: Articles
On Monday-Tuesday next week, Berlin will host the G20 finance ministers’ negotiations with African elites led by a South African, Malusi Gigaba. Is this the next neo-colonial defeat for the continent, harking back to another process 132 years ago?
From November 1884 to March 1885, fourteen European powers met in Berlin to discuss the division of European imperial interests on the African continent. The outcome of this negotiation process by the European powers was the General Act of the Berlin Conference. This provided an international legal framework for the formal annexation of African territories in furtherance of European capitalist interest.
Through European imperial control, the ruling oligarchs and elites were able, as Walter Rodney observed, “to underdevelop Africa.” Their work led to extreme fragmentation that makes it difficult to solve durable problems including climate change, acute poverty, economic dependency, violent conflict, chronic hunger and general lack of basic social services such as education, health and social infrastructure.
Now, 132 years after Berlin, the leaders of the Group of Twenty (G20), 19 leading economic countries plus the European Union, meet at another German City, Hamburg on 7-8 July 2017, following next week’s Berlin meeting of financial officials. Key on the agenda of the G20 leaders is its partnership with Africa as contained in a blueprint titled, Compact with Africa (CWA).
Read more: G20 Compact with Africa: neocolonialism or an opportunity for growth?
Global South Calls for International Body to Fight Tax Havens
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- Written by Tharanga Yakupitiyage / South Center
- Category: Articles
Tax havens are “one of the worst enemies of our democracies,” said state representatives during a meeting at the United Nations.
Due to concerns over the impacts of illicit financial flows, the Missions of Ecuador, South Africa, and India convened an informal workshop to discuss the issue and potential solutions.
“Tax revenues are said to be the lifeblood of a state. With integration of economies in a globalized world, actions taken on taxation in one country affect practically everybody within borders and across borders,” said Permanent Representative of India to the UN Syed Akbaruddin, adding that the trends in illicit financial flows are alarming.
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Inequality has been a Choice
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- Written by Claudio Schuftan
- Category: Articles
INEQUALITY HAS BEEN A CHOICE. GLOBALIZATION THRIVES ON EXISTING INEQUALITIES. (Joseph Stiglitz)
-Bernie Sanders put it best: “We not only have massive wealth and income inequality, but a power structure that protects that inequality”.
-The main driver of inequality is corporate-driven globalization.
-Better machines, better technologies do not produce better wo/men. We cannot become a society in which a knowledge aristocracy will dominate an every-day-less-informed-social-mass. This will only deepen economic inequality. (Rosa Luxemburg)
-Difference Yes, Inequality No! Plurality is the essence of life. (Slogan of the recent 12th Congresso de la Redeunida, held in Campo Grande, Mato Grosso do Sul, Brasil)
UN Financing for Development Forum: private sector eats cake while developing countries fight for crumbs
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- Written by Bodo Ellmers
- Category: Articles
Last week’s United Nations’ Financing for Development Forum in New York was notable for being the first major event to admit in a formal outcome document that at the current pace, the Sustainable Development Goals will not be reached. The Forum - which deals with all aspects of finance and the financial architecture that regulates finance - planned to push reforms that would make finance work for development. Progress was meagre however, as political blockages still need to be overcome.
The outcome document of the 2017 Financing for Development (FfD) Forum paints an alarming picture: “The current global trajectory will not deliver the goal of eradicating poverty in all its forms and dimensions by 2030”. A key reason is the lack of adequate funding for the SDGs. While there is no lack of ‘hot money’ inflating asset prices and speculative bubbles across the globe, there's a failure to transform that money into development finance, not least because governments are failing to reform the financial system. The 2017 FfD Forum pledged to take “immediate action … to implement the Addis Ababa Action Agenda” (the commitments made at the last International Conference on Financing for Development two years ago), but it’s unclear exactly what the substance of that action will be.
Fiscal Space for Social Protection and the SDGs
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- Written by Isabel Ortiz et al. / ILO / UNICEF / UN Women
- Category: Articles
Second edition of an interesting research of Isabel Ortiz and colleagues: Options to Expand Social Investments in 187 Countries
World Bank Report on Inequality Brings no Solutions
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- Written by Jomo Kwame Sundaram
- Category: Articles
The 17 Sustainable Development Goals (SDGs) – collectively drafted and then officially agreed to, at the highest level, by all member states of the UN in September 2015 – involves specific targets to be achieved mainly by 2030. The agenda seeks to “leave no-one behind” and claims roots in universal human rights. Thus, addressing inequalities and discrimination is central to the SDGs. Poverty and Shared Prosperity 2016: Taking on Inequality is the World Bank’s first annual report tracking progress towards the two key SDGs on poverty and inequality.
Annual reporting on poverty, inequality
This particular report evaluates progress towards reducing extreme poverty to 3% of the global population and sustaining per capita income growth of the bottom 40% of the population faster than the national average. According to the bank, with global economic growth slowing, reduction of income inequality will be necessary to ending poverty and enhancing shared prosperity.
Read more: World Bank Report on Inequality Brings no Solutions
Non-Aligned Movement at World Health Organisation
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- Written by NAM / South Center
- Category: Articles
Through the NAM’s annual ministerial meetings on health, the NAM has served as a valuable vehicle through which developing countries are able to coordinate their positions in pursuing their efforts to strengthen coordinated global action on global health issues and to enhance the ability of the World Health Organization to deliver on and be more responsive to the needs of developing countries in the health arena.
The South Centre, as the intergovernmental thinktank of developing countries, fully supports the NAM in this endeavour.
Read more: Non-Aligned Movement at World Health Organisation
