Thursday, September 19, 2013

Concord: EU failing treaty obligations to developing countries as $100bn tax loss shows

From Concord, the European non-governmental confederation for Relief and Development:
Concord applauds the EU for being the only region in the world to date to have taken on a binding obligation to be accountable for how all its policies affect the world’s poorest.
. . .
Unfortunately, European decision-makers have not yet demonstrated the political courage needed to make fair policies a reality.
More specifically:
  • At least $859bn was lost from developing countries in 2010 alone through illicit financial flows. This is 13 times the amount the EU spent on development aid in 2012.
  • In tax revenue alone, at least $100bn was lost from developing countries through insufficient international tax policies.
  • The EU is not respecting its commitment to Policy Coherence for Development, a Lisbon Treaty obligation that aims to make sure EU policies do not undermine development objectives.
This report presents a series of personal stories illustrating the devastating repercussions that incoherent political choices made in Europe have on citizens of developing countries and their communities.

It makes a number of recommendations to the EU institutions for what they can do, concretely, to help these people and to ensure the proper implementation of the EU’s commitments to policy coherence.
"Financing for development, as agreed in the Monterrey Consensus, covers many different flows: domestic financial resources, international resources such as development as- sistance, innovative sources of financing, foreign direct in- vestment and other private flows, external debt, etc. For developing and developed countries alike, domestic resources, such as taxation, are by far the largest source of revenue for financing economic and social development, including public services. Furthermore, public sources of financing in general (including official development assistance (ODA), government borrowing and tax revenues) tend to be more predictable and stable. Most importantly, however, public resources have the potential to be more “pro-poor” by targeting the poorest and most vulnerable in society in a way that private flows cannot, and taxation has proved to be crucial for reaching the Millennium Development Goals: for example, a higher tax-to-GDP ratio allows for the provision of free primary education. In addition, the mobilisation of domestic resources also represents a step forward in implementing the country ownership principle.
Read the report in English here, and in French here.

Update: for background and resources on Inequality & Democracy, see here.


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