Who will defend tax dodging?

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2015 has started off as a tough year for tax dodgers. In Zambia, the new President appears to have confirmed the fears that multinational mining corporations expressed during the election campaign, by saying he expects companies to pay their tax. At the African Union meeting in Addis Ababa, the continent’s Heads of State have unanimously accepted in full the recommendations of the High Level Panel on Illicit Financial Flows headed by Thabo Mbeki – and Mbeki has been outspoken in declaring multinational corporations as the big offenders. In Luxembourg, leaks exposing tax avoidance have created new pressure on the government and have even forced European Commission President Juncker, former PM of the country, to pledge European action to tackle it. In Britain the head of the National Crime Agency has declared war on the “hundreds of billions of pounds of criminal money laundered through UK banks.” A UK NGO coalition campaign for action against tax dodging has been welcomed by leaders across the political spectrum. In the US, President Obama has promised to tackle “corporate deserters” and to close the loopholes that enable the rich to avoid paying their fair share of tax.  And newspaper stories of companies from Google to Glencore have created a worldwide drumbeat of shame.

With this new public and political mainstream, most corporations are going out of their way to distance themselves from the label of “tax dodger”. They stress their respect for the law, their recognition of the importance of taxation – they talk about their diligence and their contribution. Their social license to operate seems to demand that they promise that they are on the side of the public on this one.

So will no one defend the tax dodgers?

In this context, the Adam Smith Institute’s outspoken support for tax avoidance is a valuable reminder that we do have an opponent, that progress on tackling tax avoidance is difficult not only, or even primarily, because it is technically complex, but because some people think tax avoidance is just fine. In the words of the Adam Smith Institute, which once played a very influential role on economic policy, “advising people on how to avoid certain corporate taxes in poorer African countries” shows “public spiritedness” and is “a bloody good idea”. “If you’ve advised people to dodge that corporate taxation,” they add, “you’ve just raised the wages of some of the poorest people in the world.”  With all due respect to the Adam Smith Institute for not hiding their teeth on this one, and with somewhat less respect for their mis-remembering of the historical Adam Smith, they are not our prime opponent.

Our prime opponents are much sneakier, much cleverer, than the outspoken ideologues who publicly declare tax dodging is good. The people we have to fear operate not in the light but in the shadows. They say that they support reforms to tackle tax dodging, just not the ones we propose, or they say they support the ones we propose, and then flood Washington, Brussels, London and the world’s poorest countries with lobbyists hired to undermine progress. Of course most of what the big corporations do to avoid tax is legal. They spend a fortune on lobbying to ensure it stays that way.

We’ve won the argument on tax. But that’s just phase one in the long struggle for tax justice. Our opponents are hugely rich, frightening powerful and totally unscrupulous, and are not used to losing. Goliath has been shamed, but he’s still massive.

We have not reached the end of the war on tax dodging. We’ve not even reached the beginning of the end. But thanks to the tenacity of activists across the world, we have, at least, reached the end of the beginning.

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Has securitising Ebola paid off?

UN officials are expressing cautious optimism that the tide has been turned in the Ebola outbreak in West Africa which has now claimed more than 8,600 lives.

The World Health Organisation, WHO, announced last week that the number of new cases of Ebola in the three countries most affected Liberia, Sierra Leone and Guinea, is falling and declared Mali to be Ebola-free. In addition, the most seriously affected country, Sierra Leone, said it is to reopen its schools after an 8-month closure.

While saying the epidemic has reached a turning point, WHO officials are also warning there is always a risk of resurgence. There is a particular focus on western Sierra Leone which remains the most seriously affected part of the region.

To underline the need to maintain the anti-Ebola momentum, the UN launched an appeal at the World Economic Forum in Davos for an extra $1 billion (£660 million) to deal with Ebola and its impact on the region over the next six months.

The appeal was made jointly by David Nabarro, the UN Special Envoy on Ebola, and the UN’s Emergency Relief Coordinator, Valerie Amos, who cautioned “complacency would be our worst enemy.”

The apparent success of the UN-led fight against Ebola followed what the Director General of the WHO, Dr Margaret Chan, herself has acknowledged was an earlier failure by the world health body.

An internal WHO report, leaked to the media last October, says it failed to respond in time to warnings the disease was spreading and Dr Chan, told Bloomberg last October she was not aware of the scope of the epidemic until she received a memo in June, three months after WHO officials in West Africa had first reported cases of the disease.

The leading medical NGO, MSF, had been warning since April the outbreak in Guinea was unprecedented and accused the WHO of taking the epidemic much too lightly.

The international effort to help the West African countries tackle Ebola only really got going in September after the UN elevated it from an international public health emergency to a threat to international peace and security.

The UN Security Council was convened for the first time ever over a public health crisis in September and passed the resolution establishing of UNMEER – the UN Mission for Emergency Ebola Response – to lead and coordinate the efforts to eradicate the outbreak by the three countries, UN agencies and member states, and NGOs.

The three worst affected countries, Liberia, Sierra Leone and Guinea are among the world’s poorest and have rudimentary health care systems. In order to kick start the UN’s anti-Ebola efforts, the United States pledged $1 billion (£660 million) and deployed 3,000 troops to Liberia to build field hospitals. Britain pledged £230 million and took the lead in its former colony Sierra Leone, deploying 750 military personnel to build five treatment centres and France sent troops to its former colony Guinea to build a field hospital there.

In the US particularly there was criticism of the use of the military against Ebola. One retired army officer, Lt General William Boykin, said it was a misuse of the army arguing it was inappropriate because soldiers are trained to fight wars not disease.

So why did Ebola come to be seen as a security threat meriting a Security Council resolution and the deployment of troops? Continue reading

What can be done about women’s economic inequality?

Alongside last week’s Davos meeting has been a welcome focus on global economic inequality – but much less on gender inequality. Everyone agrees that women’s economic inequality is important, especially in developing countries, but change is agonisingly slow. The proportion of women working globally has fallen slightly since 1990. Just 2 per cent of bilateral aid is directed towards women’s economic empowerment, and that figure has barely increased since 2007.

You know that women’s economic inequality is a problem, but do you know how bad it is? (I didn’t). Only half of women participate in the labour market, compared with 80 per cent of men. More than half of all employed women are in informal vulnerable employment. Women still earn between 10 and 30 per cent less than men. All this adds up to a staggering US$9 trillion annual cost to women in developing countries due to their lower pay and lesser access to paid jobs than men. That’s more than the GDP of Britain, France and Germany combined. It’s that bad. Learn more here.

The ray of hope here is to think outside the box. Women need equal pay, equal opportunities and development finance for gender equality. But there are also other avenues.

A number one reason for women’s economic inequality is the vastly greater amount of caring that they do. They look after children, cook and clean, and care for anyone in the family who is ill or infirm. Women in developing countries devote up to three daily hours more to housework than men, and spend up to 10 times as long as men looking after others.

While we wait for the time when women and men all over the world share this kind of domestic work equally, other policies can support progress. Decent public services make a vast different to women’s care responsibilities. Hospital and clinics, schools childcare services and social care all play their part. Where these are absent, the work of making up for them falls – you guessed it – on women. Where public services are functional, women have a much greater chance of holding down decent jobs. The far more comprehensive public services provision in developed countries is one of the reasons why the gender care gap, while still real and present, is proportionately much smaller.

So to close the gender gap, an area not generally considered to be about gender may prove vitally important. Decent public services for all – and sufficient taxes to pay for them – could provide a big part of the solution.

Why the Green surge is an opportunity for Labour as well as a threat

What a week for the Greens: first they sail past both UKIP and the Liberal Democrats on membership numbers; then they secure a place in the televised leaders’ debates during the election campaign.

I suspect I’m not the only Labour member who feels a bit conflicted by all this. On one hand, it’s pretty clear that the ‘Green surge’ spells nothing good for progressive politics in electoral arithmetic terms.

The Greens have no real chance of winning any seats outside of their existing stronghold in Brighton, after all – but they could do real damage to Labour’s prospects in a host of other places. Ipsos Mori’s Ben Page estimates that the Greens’ current 9% vote share would cost Labour 17 marginal Coalition seats, the majority of them Conservative-held. (For a detailed analysis of whom the Greens appeal to and where, this post by LSE’s Ian Warren is excellent, as is this more recent piece by Manchester’s Robert Ford.)

It’s no wonder Labour created a special unit headed by Sadiq Khan to counter the Green threat a few months back: it’s all starting to feel uncomfortably reminiscent of the US election in 2000, when Ralph Nader drew votes away from the Democrats and allowed George W Bush into office for the first time.

But on the other hand, what a relief to have to have a progressive party pushing genuinely visionary ideas on inequality, environment, and internationalism. As Mary Riddell put it in the Telegraph last week,

The difficulty is that many young voters are immune to conventional blandishments. While the aspirationalists among them may put their own best interests first, idealists of all ages want something more … Many voters are now listing towards the Greens because they feel that Labour is still not sufficiently valiant in the defence of human rights and civil liberties, still too effete a crusader on climate change and still draped in the tattered mantle of failed politics.

I think she’s right on all those counts, and would add a few others too: actually doing something about the fact that the top 1% now own more than the rest of us put together, facing up to the fact that all the war on drugs has achieved is to criminalise huge numbers of young people while adding narco-barons to the threats facing fragile states, or getting serious about regulating the financial sector to prevent a repeat of 2008 to name just three.

To be sure, I don’t think the Greens’ ‘mini-manifesto‘ adds up to a serious programme on all these issues, any more than Russell Brand’s book does; and as they start to get more airtime, some of the lacunae in their policy platform will come more to the fore, just as has happened with UKIP.

But I think the Green surge still points to a real hunger among a section of the electorate for genuinely visionary, transformational politics – just like the post-referendum SNP surge in Scotland. (As the FT’s Janan Ganesh tweeted last week, “[I] genuinely think there is unmet demand for politicians who push back against us a bit. We’re done with them reaching out and feeling our pain.”)

And to meet that hunger, it’s not enough for Labour to make some tweaks to its comms strategy (Sadiq Khan’s new unit is apparently focusing on “a toolkit of local campaign materials for constituencies to use and … a national media strategy to combat the Greens”). Instead, as Peter Hain observed last week, Labour needs to think about actual policy.

So imagine a dream scenario in which Ed Miliband – or, for that matter, Nick Clegg or David Cameron – decided that there were votes in being visionary; in a politics of a larger us, a longer future, and a different good life. What are the policies we might wish for in their manifestos? I’ll set out a few starters for ten in a couple of days’ time.

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Saying the unsayable in 2015

It’s 2015, a year where global debate on development will be loud and active, with the new global sustainable development goals, the conference on how to finance them, and the important climate summit. However, having now been part of development debates for longer than I like to remember, I wonder whether these will be as broad and open as in the past, or whether they will be restricted to the issues more palatable to those who hold power, with a whole range of areas where the powerful also constrain development rendered unsayable.

2015 is also the 30th anniversary of Live Aid, the massive concert-fundraiser that placed a lasting spotlight on global poverty. A popular event not a policy prescription, the development of the Live Aid phenomenon perhaps mirrors the wider world.

The original Live Aid in 1985 responded to the famine in Ethiopia by raising money. It did not set out to look at the local or global causes of the famine – the musicians that heralded Live Aid were even called ‘Band Aid’, a brand of sticking plaster. Live Aid was much criticised for this (although my personal story is that it succeeded in propelling me from my teens onto a lifelong road of campaigning for global justice).

In 2005, opened with Paul McCartney singing “It was twenty years ago today…” came the even bigger follow up, Live Eight. By now things were different. The star-studded concert was explicitly not about raising funds – it was about putting public and political pressure on the forthcoming G8 meeting in Scotland to act on global poverty. The focus was not only on the role of developed countries in contributing aid, but also on how they could remove barriers to development, for example by cancelling unsustainable debts and by making trade rules fairer. It was about tackling problems underlying underdevelopment, rather than sticking a band aid over them.

And then, in 2014, came the Ebola epidemic – and a re-release of the original Band Aid track from 1985. The massive emergency response to Ebola is literally vital, of course. But there has so far been surprisingly little spotlight either on the reasons why the preventable Ebola epidemic happened, or on ensuring the same never happens again.

There is a similar trend in the wider development discussions. It is now generally assumed that developing countries must be in the driving seat of their own development, which represents enormous progress from the hung-over colonial mindset of the past. But we hear much less about the ways that the more powerful actors – whisper it – can sometimes get in the way of this development. Tax treaties that neuter poor countries’ potential to their fair share of revenue from investors are frequently agreed. Capital enters and leaves fragile countries on a whim. Harmful conditions are still attached to aid. Powerful countries still protect their own markets and block poor countries’ access to technology. Lenders are again allowing dangerous levels of debt to build. The kinds of dramatic actions needed to stem climate change are not even on the table.

These types of issues are barely present in the 2015 debates, let alone meaningful ways to ensure they are put into action. If 2015 is to bring the transformational change that everyone agrees they want, we need to rapidly rebalance the debate, and bring the unsayable back into the conversation.

It’s time for development experts to admit that poverty is a #firstworldproblem too

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“Starbucks wifi not working on my iPhone #firstworldproblems” – if your twitter timeline is full of such stories, you are probably following a few too many Northern development experts. Though minor inconveniences still trouble their lives of unexotic comfort in London, New York, or academia, they signal self-awareness that these are nothing compared with what they know of Africa, Asia, or Latin America.

To be fair, some of the stories of #firstworldproblems are thoughtful and funny. But these declarations of self-awareness highlight a troubling blindspot, these celebrations of intended irony highlight an unintended one. It springs from the same mindset as the one that argues that the Sustainable Development Goals now being negotiated at the UN needn’t oblige the North to address its domestic inequality and poverty as that would be a “distraction” from “real”, Southern, poverty. The mindset that says poverty is another country. And that mindset threatens the achievement of social justice in the North and South.

When the worldview of the dominant is that becoming first world means an end to poverty, the most vital determinants for overcoming poverty are ignored. There is no teleological inevitability about overcoming poverty – social justice is not a train journey from being Southern to being Northern. It is always a struggle, it is always about values and about power. When this truth is forgotten, or deliberately obscured, poverty gets worse. That is why we have seen the return to mass poverty in the global North. And the forgetting of that lesson also encourages failures to address poverty in the South.

In Mediterranean Europe the EU and the IMF have imposed brutal reductions on living standards that saw massive pauperisation and social dislocation. The IMF has responded to critics by saying that they couldn’t sympathise with Greeks as real poverty was in Africa. But African civil society organisations have responded with more empathy and more insight by pointing out that poverty in Mediterranean Europe has been getting so bad because the same structural adjustment once foisted on Africans has now been getting foisted on Spaniards and Greeks. The protections and the moderation of inequality brought in across the global North with the postwar consensus have been ruptured. 91 year old RAF veteran Harry Smith, recalling his experience of the Great Depression of the 1930s and now seeing Britain’s increasing “payday loan sharks, food banks, [and] housing shortages” writes “it’s not shock I feel but a sense of recognition.” In the US, all of the growth since the crash has accrued to the richest 10%. Actually, more than all of it – the rest is worse off. We cannot exempt the global North from discussions of poverty any more. The willful blindness to Northern poverty is hurting too many people in the North. And the deceit is also hurting people in the South.

Southern Governments like Brazil and Bolivia that have focused on redistribution have successfully reduced poverty at a fast pace. In contrast, while Zambia has moved from officially poor to officially middle income, the number of poor people has actually increased. Britain’s Secretary of State for International Development is not alone in saying of the relationship between growth and poverty reduction: “It really is that simple.” But it isn’t. India’s drive to become an economic powerhouse has become a alternative to addressing the real reasons why it’s child malnutrition rates are twice as bad as Sub-Saharan Africa and why its human development performance is much worse than poor Bangladesh. South Africa’s ANC won plaudits for economic responsibility by abandoning the redistributive calls of the Freedom Charter – and now the gap between rich and poor is worse than it was at the end of Apartheid.

Meanwhile, in the Global North, the norm of security and decent living standards has been replaced by widescale insecurity, and the kind of poverty that we had thought a thing of the past is now back.

One contribution that Northern development analysts can bring to development is to help tell the true story of the North. For example, they can highlight the similarities between way that Glencore avoids paying fair tax in Zambia and the way that Amazon and Google avoid paying their fair share to countries in Europe. Or how austerity is bringing back in the North medical conditions like rickets that we once thought consigned to the history books. Yet like the anthropologists of old they are most reluctant to observe such matters at home. Poverty is treated as a tropical disease rather than as a consequence of inequality. But until we unexempt the North from discussions of poverty we fail not just the poor the North but those in the South too, by helping to perpetuate an assumption that is untrue – that when a country passes a particular economic stage its people are freed from poverty. They are not. It’s time for development experts to admit that poverty is a #firstworldproblem too.

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