St Petersburg, Russia — G20 leaders returning to their countries can point to some achievements at the 2013 G20 Summit, but also to a lot that was left undone.
On the positive side, G20 leaders committed to a global deal to share tax information automatically, and set a deadline for G20 countries to implement this by the end of 2015. The G20 also endorsed the OECD’s action plan to stop profit shifting by international companies. This matters because for too long, multinational tax evasion has entrenched poverty and weakened developing country economies. However, G20 leaders did not announce details of when developing countries will be part of this automatic exchange of information deal — or commit to any way for developing countries to engage in the process of negotiating new tax rules — which means that it is not clear when they will start to benefit from this new system.
Developing countries lose an estimated $100bn to $160bn annually to corporate tax dodging, and African nations lose nearly 2 per cent of their gross domestic product (GDP) as a result of companies fiddling the books through ‘trade mispricing,’ which is one type of corporate tax dodging. This huge tax loss is equivalent to more than half the amount that governments spend on health in Sub Saharan Africa.
So the G20 have put their first nail in the coffin of corporate tax dodging, but they’ve given no guarantees how or when the rip-off of the poorest countries will stop. Developing countries have had warm words from the richest countries before, so this time must be different. They deserve a seat at the table when global tax rules are rewritten, because it is their citizens whose lives are on the line.
Meanwhile, in the sidelines of the G20 summit several countries, including Canada, announced increased humanitarian aid for the Syria crisis response. This is welcome news and the funding needs to be released immediately. With 2 million refugees, 4 million people displaced inside Syria, and according to the UNHCR one person fleeing Syria every 15 seconds, aid is desperately needed to provide life-saving assistance. Given the increasingly protracted nature of the Syria conflict, G20 donors must also give long-term support to countries neighboring Syria who are hosting large numbers of refugees.
Despite the announcements on aid, G20 leaders squandered the chance presented by the Summit to make progress towards a political solution to the crisis in Syria. The humanitarian suffering caused by the crisis is staggering. More than 100,000 lives have been lost. Instead of debating military action, which will only make the situation worse, leaders need to put aside their differences and intensify efforts to stop the bloodshed, before Syria is destroyed and the region further destabilized.
The G20 also failed to take action to reduce inequality. Oxfam has calculated that the income of the top hundred billionaires globally is enough to end extreme poverty four times over. The G20 needs to track the growing inequality gap between the richest and poorest, pursue further policies to crack down on tax dodging, and promote increased public spending on health, education and social protection. Rich companies and individuals are getting ever wealthier whilst ordinary families struggle: if the G20 don’t tackle this issue head-on, they will fail to set the economic agenda the world needs.
As they return home today, if they are to live up to the global leadership role that they have determined for themselves, the G20 leaders have much work to do before they next meet in Brisbane, Australia, in November 2014.
Steve Price-Thomas is Oxfam’s G20/BRICSAM Strategy Manager. Oxfam is an international confederation of 17 organizations networked together in more than 90 countries, as part of a global movement for change, to build a future free from the injustice of poverty.