Global Economic Crises and Conditions

Statement to G24, 19 April 2022

STATEMENT BY DR. CARLOS CORREA, EXECUTIVE DIRECTOR OF THE SOUTH CENTRE, TO THE MINISTERS AND GOVERNORS MEETING OF THE INTERGOVERNMENTAL GROUP OF TWENTY-FOUR (G24)

April 2022, Virtual Meeting

The lingering COVID-19 pandemic, monetary tightening and increasing geopolitical tension have slowed down the global economic recovery. Projections for the 2022 global GDP growth have been slashed by about one percentage point by major international institutions. Together with inflation, especially spikes in food and fuel prices, and ongoing supply chain disruptions, uncertainty and fragility are looming over the two-speed world economic recovery. This has dimmed the hope to halt or reverse the trend of the rapidly increasing number of people falling into extreme poverty and suffering from hunger. While the COVID-19 virus continues to mutate, the access to vaccination continues to be a major world concern. Developing countries’ supply and financing constraints for vaccines and critical medical products must be addressed.

In view of the multiple challenges faced by developing countries, the efforts of G24 in helping to coordinate the positions of developing countries on international monetary and development finance issues remain critical. The South Centre will continue to support those efforts.

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Statement, October 2021

STATEMENT BY DR. CARLOS CORREA, EXECUTIVE DIRECTOR OF THE SOUTH CENTRE, TO THE MINISTERS AND GOVERNORS MEETING OF THE INTERGOVERNMENTAL GROUP OF TWENTY-FOUR (G24)

The world economy is showing signs of recovery, yet very uneven, and is facing a multitude of challenges including rising inequality within and among countries, vaccine nationalism in the face of raging COVID-19 variants, escalated debt burden for many developing countries, ravages of climate change and weakening multilateralism.

Now, we are at a pivotal moment to mend and fix the global systemic problems so that we can recover better, greener, more inclusively, and more resiliently. It is time to address root causes of the fragility, instability, divergence and asymmetries of the global economy.

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SC Webinar, 18 October 2021

Exploring synergies in multilateralism and human rights for a just, fair & equitable recovery from COVID-19

18 October 2021

15:30-17:00 CEST

Facilitated by the South Centre, this webinar is an opportunity for participants to exchange views and discuss how the Legally Binding Instrument on Transitional Corporations and Other Business Enterprises can support States’ efforts in other areas of the multilateral system towards enabling a just, fair, and equitable recovery after the COVID-19 pandemic.

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SouthViews No. 227, 29 September 2021

Ending Extreme Poverty by Ending Global Tax Avoidance                                            

by Abdul Muheet Chowdhary

The world is estimated to lose around USD 500-600 billion in revenues from corporate tax avoidance each year. Ensuring that governments can collect this revenue through ending global tax avoidance will play a major role in ending extreme poverty. Overseas aid provided to developing countries focused on eliminating extreme poverty must therefore incorporate addressing tax avoidance, especially by Multinational Enterprises, as a core component of their efforts.

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Statement, October 2020

South Centre Statement to the Ministers and Governors Meeting of The Intergovernmental Group of Twenty-Four (G24)

At the G-24 spring meeting, an important part of the discussion was about how COVID-19 could result in a setback to the fragile recovery of the world economy from the global financial crisis. Six months later, the current international discussions are about how long the pandemic will remain unchecked and how deep the world economic recession will be. Developing countries are licking their wounds and alarmed at the big financing gap between their plummeted fiscal revenue and skyrocketing financing needs for the pandemic response. The situation is dire. The world has passed the tragic milestone of losing one million lives to the pandemic. Some of the hard-won achievements made in implementing the Millenium Development Goals (MDGs) and Sustainable Development Goals (SDGs) have been reversed. Poverty and hunger will increase for the first time since the 1990s, the number of people facing starvation may double, gender and income inequality has been further widened as a result of the pandemic.

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SouthViews No. 201, 23 June 2020

The Weakness of Economic Multilateralism

By José Antonio Ocampo

The weakness of multilateral cooperation was evident at the meetings of the Group of 20 and the Bretton Woods institutions in Washington. The limited international cooperation contrasts with the ambitious domestic policies adopted by some developed countries, and in particular the United States, to manage their crisis. The big losers will be the emerging countries, for whom cooperation has so far been minimal.

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Statement, April 2020

South Centre Statement to the Ministers and Governors Meeting of The Intergovernmental Group of Twenty-Four (G24)

The COVID-19 pandemic is not only a major health calamity with mounting humanitarian costs but also the biggest economic crisis since the Second World War. Immediate debt relief is needed for poor countries with unsustainable debt. The global pandemic requires a global solution and solidarity.

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SouthViews No. 189, 17 January 2020

Enabling and Benefitting from Tax Avoidance: The Case of Canada in Africa’s Extractive Sector

By Alexander Ezenagu, PhD

The treatment of multinational entities as separate entities for tax purposes is incompatible with economic reality. As such, multinational entities are able to erode tax bases and shift profits to low tax jurisdictions. Due to the base erosion and profit shifting activities of multinational entities, African countries struggle to achieve the Sustainable Development Goals (SDGs) – to eradicate poverty, invest adequately in infrastructure and its industries, significantly reduce illicit financial flows and strengthen domestic resource mobilization – as they rely heavily on corporate taxation for a large part of their public revenue.

If African countries are to achieve their SDGs, there is an urgent need for a new international tax system that aligns where economic activities occur with where profits are taxed. A practical alternative is the unitary taxation of multinational entities. Unitary taxation treats multinational companies as a single entity, allocating the global profit to the jurisdictions where economic activities occur and value is created.

This article calls for the purposeful study of the unitary taxation approach to income allocation and serious consideration of its merits by the relevant supranational bodies. (more…)

SouthViews No. 184, 19 July 2019

Understanding global inequality in the 21st century

By Jayati Ghosh

Inequality has increased since it caught the attention of the international community. The claims that global inequality has decreased because of the faster rise in per capita incomes in populous countries like China and India must be tempered by several considerations. National policies are crucial in this worsening state of affairs and the international economic architecture and associated patterns of trade and capital flows encourage such policies. More national policy space is required for governments, especially in developing countries, to pursue policies that would move towards more sustainable and equitable development which in turn requires significant changes in the global architecture. None of this can be done without some international coordination, and there is a need to revive a progressive and acceptable form of multilateralism that supports the working people across the world, rather than the interests of large capital. (more…)

SouthViews No. 181, 25 June 2019

UN tax committee gets a boost through new working methods

By Abdul Muheet Chowdhary

The UN in May published a document titled ‘Practices and Working Methods for the Committee Of Experts On International Cooperation In Tax Matters’. For those who believe that the UN should play a stronger role in the governance of international tax, this is a welcome development. The document further deepens the institutionalisation of the UN Committee of Experts on International Cooperation in Tax Matters (henceforth UN tax committee) by developing new working methods and making several clarifications. Some of these are welcome while others are problematic. Overall, it is clarified that the working methods must be read in conjunction with the rules of procedure of the United Nations Economic and Social Council (ECOSOC) and in the case of inconsistency, the ECOSOC rules are to prevail. (more…)

Policy Brief 60, May 2019

Exploding Public and Private Debt, Declining ODA and FDI, Lower World GDP and Trade Growth—Developing Countries Facing a Conundrum

By Yuefen LI

Recently international institutions repeatedly cut the projections for world gross domestic product (GDP) growth of 2019, revealed further worsened accumulation of debt, reported declining official development assistance (ODA), highlighted consecutive drops of foreign direct investment (FDI) flows and showed decelerated international trade and intensified trade tension. A closer examination of the performance of developing countries in these datasets shows clearly the economic conundrum that developing countries are facing. The most dangerous sign is the rising levels of public and private debt, and debt sustainability challenges for developing countries. It is worrisome that over 40 percent of low income countries are facing a high risk of debt distress or are in debt distress. The cloudy patches over the world economy are gathering together and getting darker. It seems a storm is coming soon for those developing countries which are facing a combination of weak economic fundamentals. Yet, there seems to be limited room for policy makers to take actions as downward pressure is coming from different directions at the same time and creating constraints which would make policy measures ineffective or feeble. In some cases, policy tools used to limit negative effects of one problem could trigger negative impact on other problem(s) in hand.

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SouthViews No. 177, 13 March 2019

Preserving Special & Differential Treatment in WTO: statement by Ambassador Zhang Xiangchen of China at the General Council Meeting

There remain significant gaps between developing and developed WTO Members in terms of economic and social development, and developing Members still face tremendous capacity constraints in participating in the multilateral trading system. The fundamentals for the application of special and differential treatment in favor of developing Members remain unchanged. US Communications WT/GC/W/757/REV.1 and WT/GC/W/764 neglect this. Below is the statement by H.E. Mr. Zhang Xiangchen, Permanent Representative of China to the World Trade Organization (WTO), at the General Council Meeting on Communications of Development on 28 February 2019. (more…)

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