Leaders from Canada, France, Germany, Italy, Japan, Russia, USA and the UK met at Lough Erne in Northern Ireland for the G8 Summit 2013.The G8 brings together eight global leaders to address international issues and tackle challenges faced globally such as tax compliance, transparency and trade.
Taxation was at the top of the agenda for this year’s summit, after leaders had declared their commitment to work together on tax accountability and transparency. In late 2008, global trade saw its steepest fall since the Great Depression – more than four years on and trade has still not fully recovered. Trade growth fell to 2% in 2012 which is well below the 20-year average of over 5% per year. It is estimated that if G8 countries complete all of their current and proposed trade deals, it could boost the income of the whole world by more than 1,000 billion dollars. UK has agreed to support free trade on a global scale through the World Trade Organisation in Bali and support ambitious trade agreements.
Britain will further support the aim of African countries to cut crossing times at border posts and double intra-African trade by 2022 and ensure that countries in all stages of development can benefit from the relaxation of trade restrictions. The G8 will be working with partners from industry, civil society and national governments in addition to working with the Deauville Partnership to cut trade and investment barriers, as well as developing market solutions for Arab countries in transition. With the ever increasing problem of tax evasion and avoidance, which is regarded as illegal activity, and having witnessed aggressive examples of tax avoidance, the UK government believes we have reached a point where intervention is necessary to protect not only our services but our people. Through strengthening international standards, it will allow countries to collect the rightful tax, allowing the strengthening of public services such as health and education. It will protect public finances and improve confidence in the global economic system. In addition, the UK plans to explore what more can be done to support lower-income developing countries to collect tax revenues owed to them. Britain has already provided support to developing countries to provide fair and sustainable domestic taxation systems, and one example of this is having worked with the Ethiopian authorities to help with tax collection, resulting in the amount of tax collected having increased seven fold in the last decade alone. The UK should continue to demonstrate a determination to deal with challenges posed by shifting profits to low tax jurisdictions , ensure anti-money laundering and counter-terrorist financing regimes are effective, and improve the transparency of company ownership.
Transparency about the ownership of companies and land and where money flows from and to is critical for developing countries. In order for countries to develop and reduce poverty, the removal of conflict and corruption and increasing property rights is vital for positive progress. Corruption is a barrier thus stopping positive development. Partnerships plays a vital role in moving societies forward, hence UK needs to work constructively with developing countries, businesses and civil society to strengthen capacity in the extractives sector and support existing frameworks such as the African Mining Vision and African Mineral Development Centre. Land Transparency is crucial, a lack of which creates a barrier to responsible investment, whilst weakening livelihoods and ignoring the rights of local communities by creating space for corruption and money laundering.
Hence the UK should encourage sustainable investment in land and responsible management of land resources, which is essential for economic growth and food security in countries where people rely on agriculture as a source of income and nutrition. Some of the world’s poorest countries have some of the greatest supplies of oil, gas and minerals, but due to systemic corruption and a lack of transparency, these resources do not fully benefit the citizens, as profits are not being re-invested in the domestic economy. Hence as a country, we need to push for higher international extractives transparency standards through common global reporting rules and wider membership of the Extractive Industries Transparency Initiative (EITI).
The UK and France have already committed to joining the EITI. The G8 have committed to pushing for more data to be made available to citizens; clearly published on the internet and free of charge. Open data not only drives innovation and economic growth, but it is an educational element for citizens and increases accountability of national leaders and government. Due to the influence and power of the G8 to overcome social, political and economic challenges, and despite positive actions set in place, critics will always question the effectiveness of actions agreed by G8 leaders, and structural reform is yet needed if institutions such as WTO, UN, World Bank and IMF are to meet these challenges. Although it is no doubt that in past decades progress has been shown and we are on our way to tackling some of the key social and economic global challenges of this century.
Roxana Andrusca is Vice Chair for Hampshire and Isle of Wight Young Labour and UK Global Poverty Ambassador