Brazil's finance minister proposed a global tax on the super-rich at a G20 meeting in Sao Paulo, emphasizing the need for international cooperation to tackle tax evasion and reduce inequalities. The proposal aims to address the estimated $4.8 trillion in lost tax revenue due to tax havens and the effective tax rates of billionaires. This initiative aligns with growing global consensus, including a UN resolution, for stronger international tax cooperation, although challenges remain in reaching a common document.
Brazil's finance minister called for a "new globalization" focused on addressing poverty and climate change at the G20 meeting, but conflicts in Ukraine and Gaza threatened to overshadow the agenda. The G7 discussed seizing frozen Russian assets to aid Ukraine, while Brazil aims to prioritize fighting poverty and climate change, alleviating debt burdens, and increasing taxes on corporations and the super-rich. The meeting also addressed the urgent need for financial assistance for Ukraine and the potential economic risks of the conflict in Gaza.
Oxfam International warns that the world is entering a "decade of division" as the wealth of the five richest men has doubled since 2020, while nearly 5 billion people have become poorer, exacerbated by the pandemic and geopolitical events. The organization predicts the possibility of a trillionaire within a decade, highlighting the urgent need for measures to address global inequalities, including permanent taxation of the wealthiest, effective taxation of big corporations, and a renewed drive against tax avoidance.
China's growing role as a lender of last resort to developing countries is causing tension with the US and its Western allies, who are pressing China to provide more debt relief. China's approach to lending is more transactional and less risk-averse, leading to unsustainable debt in many countries. The conflict highlights a potential fault line in the global economic order, as China challenges the Western model of providing assistance and negotiating debt relief. The issue will be a significant area of conflict at the IMF and World Bank's spring meetings.
