New social contract

Beyond vested interests: Reforming international co-operation post COVID-19

Development Matters Covid-19, Development in Transition, New social contract, Reviving international co-operation , , , ,

By Imme Scholz, Deputy Director of the German Development Institute / Deutsches Institut für Entwicklungspolitik (DIE) and Deputy Chair of the German Council for Sustainable Development[i]

This blog is part of a series on tackling COVID-19 in developing countries. Visit the OECD dedicated page to access the OECD’s data, analysis and recommendations on the health, economic, financial and societal impacts of COVID-19 worldwide.

The world is now in the eighth month of the COVID-19 pandemic. When this was written, the highest daily infection rates were recorded in India, the US and Brazil, while the highest death rates (per 100,000 inhabitants) were registered in Europe and the Americas. Africa so far has not turned into a hotspot of the disease – good news that is attributed to effective public health workers and Africa’s young population. The COVID-19 pandemic has laid bare weaknesses and blind spots in societies, economies and policies worldwide. Notably that public services the world over take too long to understand their new responsibilities under changed circumstances and as a result act too slowly, at the expense of the most vulnerable. For example, infection and death rates are high in OECD countries despite good health care systems. And insufficient digital infrastructure and access in public administrations, schools and households, exacerbated by social inequalities, affect access to education in Germany or in Latin American countries alike.

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COVID-19 has pushed extreme poverty numbers in Africa to over half a billion

Development Matters Africa, Covid-19, New social contract , ,

By Baldwin Tong, PhD candidate, MODUL University Vienna, Department of Sustainability, Governance, and Methods

This blog is part of a series on tackling COVID-19 in developing countries. Visit the OECD dedicated page to access the OECD’s data, analysis and recommendations on the health, economic, financial and societal impacts of COVID-19 worldwide.

The global economic fallout of the COVID-19 pandemic has resulted in a large setback of the international community’s goal to achieve SDG 1 of “no poverty” by 2030. Extreme poverty around the world is increasing, the first time that has happened this century after decades of global poverty reduction. Over 700 million people worldwide are currently estimated to be living in extreme poverty. Global poverty headline numbers have therefore returned to approximately 2015 levels meaning that the world has lost almost 5 years in its effort to end extreme poverty due in large part to COVID-19. The following analysis is based on data from the World Poverty Clock.

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Tax Inspectors Without Borders: ready to assist developing countries recover from COVID-19

Development Matters Covid-19, New social contract , ,

By Pascal Saint-Amans, Director of the Centre for Tax Policy and Administration

This blog is part of a series on tackling COVID-19 in developing countries. Visit the OECD dedicated page to access the OECD’s data, analysis and recommendations on the health, economic, financial and societal impacts of COVID-19 worldwide.

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In the aftermath of the 2008 financial crisis, governments came together to fight for tax transparency and begin the battle against base erosion and profit shifting. It was that crisis that also inspired Tax Inspectors Without Borders (TIWB), which became a joint initiative of the OECD and UNDP at the Addis Finance for Development conference. The initiative helps developing countries to collect the taxes due from multinational enterprises, with countries coming together to assist each other in building tax audit capacity.

We now face an even greater global health and economic crisis, with profound implications for lives and livelihoods. The sharp decline in global and domestic trade and commerce is leading to a commensurate drop in tax revenues, hitting poorer countries hardest due to their reliance on corporate income taxes. Those that depend heavily on tourism, hospitality and remittances from their diaspora may suffer the worst.

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We need a more globalised response to pandemics for immigrant integration

Development Matters Covid-19, Migration, New social contract , ,

By Tahseen Shams, Assistant Professor of Sociology at the University of Toronto

This blog is part of a series on tackling COVID-19 in developing countries. Visit the OECD dedicated page to access the OECD’s data, analysis and recommendations on the health, economic, financial and societal impacts of COVID-19 worldwide.

The COVID-19 pandemic has shown that what happens in a faraway land does not stop at its borders but can produce domino effects forceful enough to lock down the entire world. How have we as a globalised society responded to this moment with regards to immigrant integration?

Not well. Immigrants, long singled-out as disease carriers, are again being blamed for the world’s epidemic. Because the Coronavirus originated in China, xenophobia has now turned its gaze on those perceived as Asian immigrants. Pre-existing anti-Chinese racism, for instance, has spiked in the United States even though the virus that led to the outbreak in New York, which has the largest U.S. death toll, came from Europe. Anti-immigrant xenophobia has risen in general despite immigrants comprising the bulk of our essential workforce. Right-wing advocates, based on what could only be described as poorly disguised racism, are using the pandemic as evidence of the dangers of immigration. Their fearmongering taps into the public’s fears and suspicion towards “foreigners”—a label that never seems to detach itself from immigrants and their descendants. Social media, fake news, and political discourse are also helping to depict immigrants as foreigners who bring dangers from faraway lands into our country.

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Migration et travail en Suisse: pour une gouvernance partagée entre le public et le privé

Development Matters Employment, Français, Migration, New social contract, Private Sector , , , ,

Par Marco Taddei, Union patronale Suisse

Dans la période difficile que nous traversons, un défi majeur se présente à nous : l’impact de la crise du COVID-19 sur les entreprises. Le Coronavirus marque le retour des frontières dans le monde. La tentation du repli national est forte. Et la Suisse n’y échappe pas. Pendant plusieurs semaines, nos frontières, terrestres et aériennes, ont été fermées. Cependant, avec plus de 30 000 frontaliers français travaillant dans le domaine de la santé en Suisse, il s’agit justement de l’ouverture de notre marché du travail qui s’est révélée être un atout précieux. En cette période de crise sanitaire, que feraient nos hôpitaux et nos cliniques sans cette main-d’œuvre?

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Côte d’Ivoire and Morocco: tax reforms for sustainable health financing

Development Matters Africa, Covid-19, New social contract, Policy , , , , ,

By Céline Colin, Tax Economist, and Bert Brys, Senior Tax Economist, Centre for Tax Policy and Administration, OECD

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The COVID-19 pandemic has demonstrated that weaknesses in one country’s health sector can rapidly become a health challenge for other countries. Additionally, as countries around the world, including Côte d’Ivoire and Morocco, face the current economic and health crisis, the sense of urgency to mobilise domestic resources has increased. The crisis has put spending and tax revenues under severe pressure while at the same time requiring increased funding for the health sector. Moreover, the post-COVID-19 period might lead to particular challenges to financing for other ongoing health threats like AIDS, tuberculosis and malaria, as health budgets might be re-prioritised and budget increases might not be allocated to those three particular diseases.

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Une taxe climat européenne pourrait bénéficier aux pays exportateurs de pétrole

Development Matters Covid-19, Français, Natural Resources, New social contract , , , ,

Par Håvard Halland, Economiste au Centre de développement de l’OCDE

Ce blog fait partie d’une série sur la lutte contre le COVID-19 dans les pays en voie de développement. Visitez la page dédiée de l’OCDE pour accéder aux données, analyses et recommandations de l’OCDE sur les impacts sanitaires, économiques, financiers et sociétaux de COVID-19 dans le monde.

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Pour relancer nos économies d’une manière durable dans le sillage de la crise due au Covid-19, l’instauration d’une tarification effective du carbone à l’échelle mondiale reste plus importante que jamais. Cependant, tant que les Etats ne parviendront pas à s’entendre sur la gravité des risques induits par le changement climatique, la mise en place d’un système mondial de taxation des gaz à effet de serre restera une perspective lointaine.

Le mécanisme d’« ajustement carbone aux frontières » envisagé par l’Union européenne (UE) pourrait toutefois être un premier pas vers une réallocation des investissements internationaux dans le sens souhaité. Ambitieux, les nouveaux objectifs climatiques de l’UE exigeront des réductions des émissions non seulement dans le secteur de l’énergie, mais aussi dans les secteurs à forte intensité énergétique comme les industries lourdes, la métallurgie, la pétrochimie, le ciment, les engrais.

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Ongoing debt restructuring must involve Africa’s new creditors

Development Matters Africa, Covid-19, New social contract , , ,

By Arthur Minsat, OECD Development Centre and Yeo Dossina, African Union Commission[i]

This blog is part of a series on tackling COVID-19 in developing countries. Visit the OECD dedicated page to access the OECD’s data, analysis and recommendations on the health, economic, financial and societal impacts of COVID-19 worldwide. This blog is also a part of a thread looking more specifically at the impacts of the COVID-19 crisis in terms of capital flows and debt in developing countries.

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The global recession caused by the COVID-19 pandemic calls for a cancellation or restructuring of African countries’ debt. The crisis has triggered a double fiscal shock of soaring government expenditure and slumping revenues. Restoring African borrowing capacity is essential to fighting a loss of fiscal space.

Prior to the shock, Africa had already shown signs of vulnerability. Although the African continent boasted the world’s second highest economic growth rate at 4.6% on average between 2000 and 2018, it had started to slow down from a peak of 6.8% in 2012 to 3.2% in 2019. In 2020, Africa’s growth is likely to fall between -2.1% and -4.9%, significantly reducing the fiscal space of all countries. Overall, financing for development has dropped since 2010 in per capita terms. For both domestic revenues and external financial inflows, the amount of financing per capita has decreased by 18% and 5% respectively throughout 2010-2018. A less favourable global economy and persistently high demographic growth in most African countries have driven this downward trend.

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Resetting the state for the post-COVID digital age

Development Matters Covid-19, New social contract , , ,

By Carlos Santiso, Director for Digital Innovation in Government of the Development Bank of Latin America and Member of the Global Future Council on Transparency and Anticorruption of the World Economic Forum

This blog is part of a series on tackling COVID-19 in developing countries. Visit the OECD dedicated page to access the OECD’s data, analysis and recommendations on the health, economic, financial and societal impacts of COVID-19 worldwide.

glob-digital-colorsIn Brazil and elsewhere, the coronavirus crisis is accelerating the digital transformation of governments and govtech start-ups are becoming unexpected allies in the race to digital resilience.

Press reset and fast forward

The COVID-19 crisis is putting our global digital resilience to the test. It has revealed the importance of a country’s digital infrastructure as the backbone of the economy, not just as an enabler of the tech economy. Digitally advanced governments, such as Estonia, have been able to put their entire bureaucracies in remote mode in a matter of days, without major disruption. And some early evidence even suggests that their productivity increased during lockdown.

With the crisis, the costs of not going digital have largely surpassed the risks of doing so. Countries and cities lagging behind have realised the necessity to boost their digital resilience and accelerate their digital transformation. Spain, for example, adopted an ambitious plan to inject 70 billion euro into in its digital transformation over the next five years, with a Digital Spain 2025 agenda comprising 10 priorities and 48 measures. In the case of Brazil, the country was already taking steps towards the digital transformation of its public sector before the COVID-19 crisis hit. The crisis is accelerating this transformation.  Continue reading →

Exchange of tax information: a butterfly effect on domestic resource mobilisation

Development Matters Covid-19, New social contract ,

By Zayda Manatta, Head of the Secretariat of the Global Forum on Transparency and Exchange of Information for Tax Purposes

shutterstock_1685161738One small change can make a big difference in the fight against illicit financial flows.

Illicit financial flows (IFFs) deprive developing countries and regions of much-needed resources to finance and achieve their development agendas (e.g. the African Union’s Agenda 2063) and the global Sustainable Development Goals. They prevent countries from raising legitimate revenues essential for financing basic services such as social, educational and healthcare systems, and spurring economic development.

The ongoing COVID-19 pandemic has underlined how vital it is for countries to have well-financed medical infrastructure and efficient healthcare systems. The economic crisis resulting from the health crisis is undermining public finances the world over. While preserving a business climate favourable to economic recovery, long-term post-crisis strategies will likely have to encompass increased domestic revenues. Improving domestic resource mobilisation and advancing the fight against illicit financial flows needs to be at the forefront of developing countries’ political agendas. Continue reading →