Last month G8 leaders met at the exclusive Lough Erne golf resort in Northern Ireland, United Kingdom. Yet, what were the practical implications for those living in extreme poverty around the world or -- for that matter -- the 99 percent of people living in the G8 countries? Were concrete actions taken?
Before the summit, I wrote a piece about measurable actions the G8 should take that would bring meaningful change to people around the world. So, how did they do?
A week prior to the summit, governments, businesses, foundations, and NGOs came together to pledge more than $4 billon to improve nutrition. This is an impressive achievement, which included a pledge of $750 million in private funds from U.S. international NGOs coordinated by InterAction, an NGO alliance that I work for.
The economic focus of the summit was the power of the "three Ts": trade, tax, and transparency. NGOs -- like mine -- were urging G8 leaders to take this opportunity to stop tax dodgers and money launderers. The G8 produced a number of impressive statements urging G8 countries and others to fight tax evasion, prevent countries from shifting profits to avoid taxes, register the actual owners of companies and trusts (called beneficial ownership), strengthen tax collection in developing countries, and make land transactions transparent.
If these recommendations were adopted by developed and developing countries, companies would pay their fair share of taxes to the countries where the profits originated. This would provide additional resources for developing countries to improve their education and health care systems; terrorists would have fewer means to secretly transfer funds around the world; and it would be more difficult for land to be stolen from poor peasants.Below are five of the actual pledges from the G8:
- Tax authorities across the world should automatically share information to fight the scourge of tax evasion.
- Countries should change rules that let companies shift their profits across borders to avoid taxes, and multinationals should report to tax authorities what tax they pay where.
- Companies should know who really owns them and tax collectors and law enforcers should be able to obtain this information easily.
- Developing countries should have the information and capacity to collect the taxes owed them - and other countries have a duty to help them.
- Land transactions should be transparent, respecting the property rights of local communities.
These are laudatory statements except for the use of one word: "should." As The Economist notes, "should" is not "will."
There are no commitments in these statements that the G8 countries can be held accountable to, no deadlines. This list just acknowledges these are actions countries should take; what actions countries will take remains to be seen.
NGOs, like InterAction, welcome that G8 leaders discussed the issues of profits and wealth hidden in tax shelters, the scourge of secrete companies, and other financial corruption issues. I am glad that the G8 recognized the benefit of tackling corruption. More money flows out of Africa through illicit financial flows than the continent receives in official development assistance. However, discussing the burgeoning crisis of financial corruption but failing to take concrete steps to correct the situation demonstrates a lack of collective political will.
Civil society organizations should exert pressure on the G8 -- as well as the other G20 countries -- to take more concrete steps to address financial corruption, which is robbing both developing and developed countries of essential tax income. With a strong push from civil society, G8 and G20 countries can make changes that will improve the lives of people throughout the developing world and of the 99 percent in developed countries.