Value Addition or Trade Misinvoicing: Coal Trading in the Asia-Pacific
By Manuel F. Montes and Peter Lunenborg
Statistics on coal trade between India, Singapore and Indonesia suggest that trade misinvoicing is used as a vehicle for illicit financial flows. At present this practice is not well addressed by the Organisation for Economic Co-operation and Development’s tax standards. Asia-Pacific countries should intensify cooperation on this issue. Other international organizations with a mandate in this area could also play a role, for instance the World Trade Organization. Ultimately, increased cooperation would help to achieve Sustainable Development Goal 16.4 which inter alia aims, by 2030, to significantly reduce illicit financial flows.
COVID-19, Future Pandemics and the Africa Care Economy Index
By Salimah Valiani
In Africa, the care economy has long been unrecognised. At least since the last major pandemic in Africa, HIV-AIDS, caring work has been severely undervalued in the continent, and the redistribution of caring work, from females in the home and communities, is next to nonexistent. Undoing this structural inequality is crucial to improve health and wellbeing of girls and women in Africa, to be prepared for future pandemics, and to realise Africa’s demographic dividend for the benefit of the majority. To achieve this, the Africa Care Economy Index is offered as a policy, advocacy, and accountability tool.
Implementing wealth tax and wealth redistribution in Sub-Saharan Africa
By Khanyisa Mbalati
Sub-Saharan Africa is one of the most unequal places in the world, with significant levels of social, gender, and income inequality. Several countries in the region have a tax structure that is heavily weighted towards consumption taxes, which can be regressive and inflict a significant burden on those with low and middle incomes. Implementing progressive tax systems, whereby those with higher earnings pay a larger share in taxes, is one way through which governments might optimize the impact of tax revenue on reducing inequality. The adoption of a wealth tax may facilitate wealth redistribution in Sub-Saharan African nations and could help bridge the inequality gap in the region. High statutory wealth tax rates of between 5-8% are needed in order to have an effective tax rate of 3-5%.
The United Nations Intergovernmental Process – An Opportunity for a Paradigm Shift
By Kuldeep Sharma and Raunicka Sharma
Efforts are underway to strengthen the inclusiveness and effectiveness of international tax cooperation so that the current tax structures consider the equitable interests of developing countries. This is necessitated as a section of developing countries has lost confidence in the OECD and there is a lingering doubt whether OECD has developing countries’ best and equitable interests in mind. As a result, the United Nations General Assembly has launched intergovernmental talks to enhance international tax cooperation and draft a UN Tax Convention that aims to establish inclusive norms for transparency and tax cooperation, that leads to development of an acceptable and frictionless worldwide tax policy.
UN Model Tax Convention Article 26: Inequitable Exchange of Information Regime – Questionable Efficacy in Asymmetrical Bilateral Settings
By Muhammad Ashfaq Ahmed
The United Nations Model Tax Convention between Developed and Developing Countries (UN MTC) Article 26 charts out an exchange of information (EOI) regime “between developed and developing countries,” feigning that it is more favorable to the latter set of nations. Contrarily, the Organisation for Economic Cooperation and Development (OECD) MTC Article 26 is professedly geared to protect and promote interests of OECD members – “the club of the rich.” Even a cursory comparative look at the two MTCs intriguingly reveals lack of dissimilarities, and irresistibly leads to the conclusion that materially both provisions are identical. The situation gives rise to a paradox whereby developing countries that are completely at different levels of development have broken governance structures, convoluted fiscal and criminal justice systems and struggling tax administrations, have been yoked into a multilayered EOI regime, which stemmed from an intra-OECD statecraft imperative and is pre-dominantly beneficial to developed countries. The new normal contributes towards enhancement and deepening of the embedded inequities in the neocolonial economic order. The paper seminally dissects the strains generated by absence of dissimilarities between the two MTCs vis-à-vis Article 26, and posits that, in fact, this fundamentally being a developed country project, developing countries have been exploited as ‘beasts of burden’ merely to promote economic interests of dominant partners in the relationship, and by doing so, sheds light on and galvanizes the unjustness latent in the international taxes system – an inherently unequal and lopsided affair. It also delves deeper into an axiological normative evaluation of the extant EOI regime, and finding it untenable, urges a larger paradigm shift. In fact, the UN’s meek convergence with the OECD on EOI regime, ditching developing countries and leaving them to fend for themselves in this critical area of international taxation, is the scarlet thread of the paper.
Preserving Regulatory Space for Sustainable Development in Africa
By Roslyn Ng’eno
Investment has an important role for achieving sustainable development in developing countries. Although international investment agreements (IIAs) can serve as instruments to promote such objective, protection oriented IIAs have undermined the ability of States to regulate in the benefit of the community. Likewise large financial reparations imposed by arbitral tribunals have increased the threat of regulatory chill in the face of major global challenges. Strengthening the right to regulate of States and addressing regulatory chill are key matters to consider in the reform of IIAs and the international investment regime.
The WTO faces an existential crisis, despite a reasonable outcome at the Twelfth Ministerial Conference. The one way by which the WTO can resuscitate itself is to make sure that the negotiating agenda is anchored in the SDGs rather than in the narrow interests of its most powerful members. The changing role of the State must also be factored in by the WTO.
Graduating from the LDC Group: Challenges Facing Bangladesh
by Mustafizur Rahman
A significant number of LDCs will be graduating in the near term future. On graduation these countries will face formidable challenges as they will lose the benefits accruing from LDC-specific international support measures. Bangladesh is the first major LDC which is slated for graduation, to take place in November 2026. This article examines the various graduation challenges facing Bangladesh, and articulates some of the strategies that the country needs to pursue in order to graduate with momentum and make graduation sustainable.
International Clean Technology Diffusion: Pathways and Prospects
By Wenting Cheng
International clean technology diffusion is essential to mitigate and adapt to climate change, while fast and optimal diffusion can be prevented by the paywall of patents. This article examines three pathways to foster international clean technology diffusion: through restriction of intellectual property, including imposing external restraints in environmental law; striking an internal balance in maximizing TRIPS flexibilities; and keeping the status quo. It finds that the first two treaty-based pathways may not work, and an operable pathway to promote clean technology diffusion is to maximize and consolidate TRIPS flexibilities in national laws. This option challenges the popular proposal of a “Doha-like” declaration on TRIPS and climate change due to the paralysed multilateral trade mechanism, asymmetrical negotiation power of developing countries, prolonged negotiation process, and categorization problem in treaty negotiations.
A Proposal for a New Approach to Restructuring African Eurobonds: The DOVE Fund and Principles
By Daniel Bradlow
This article argues that the current arrangements for restructuring sovereign bonds do not meet Africa’s needs. African states and their supporters should create a DOVE (Debts of Vulnerable Economies) Fund that can purchase the bonds of African sovereign debtors in distress and commit to restructure them in accordance with the DOVE Fund Principles. This Fund can help interrupt inter-creditor dynamics and push the bondholders to be more open to innovative approaches to debt restructuring. This article, after briefly considering some of the problems with the current process for restructuring sovereign bonds, discusses the DOVE Fund and the DOVE Fund Principles.
The South’s Role and Responsibilities in the Next Phase of Multilateralism
By Elizabeth Sidiropoulos and Luanda Mpungose
The global erosion of trust in the global institutions is the direct result of non-delivery on the most crucial challenges that face humanity such as inequality, poverty, and climate change. South-South Cooperation can play a vital role in reinvigorating multilateralism. Beyond its horizontal engagements it has already begun supporting and enriching processes, institutions and norms-building at the global level. However, changing the superstructures that have discriminated against many developing countries will require a strategy that involves prioritising, coalition-building and coordination.
Competition Law and Intellectual Property: A Study Drawing from The Eli Lilly Case on ‘Sham Litigation’ in Brazil
By Pablo Leurquin
Competition authorities may be the best equipped institutions to penalize certain illicit practices that involve intellectual property rights. This article analyzes the decision by the Brazilian Administrative Council for Economic Defense (Conselho Administrativo de Defesa Econômica – CADE) in the Eli Lilly case, in which the company was convicted for abusive use of the right to petition (sham litigation) with anti-competitive effects. It examines general aspects of technological dependence in the Brazilian pharmaceutical industry, presents the legal premises necessary for the understanding of the decision made by the competition authority, and analyzes the legal grounds for the sanction imposed on Eli Lilly.
