Oxfam International Blogs - IMF http://l.blogs.oxfam/en/tags/imf imf en The IMF’s bold moves on inequality are still unconvincing http://l.blogs.oxfam/en/blogs/17-10-13-imfs-bold-moves-inequality-are-still-unconvincing <div class="field field-name-body"><h3>New Oxfam report finds the Fund’s new ‘inequality pilots’ fail to support inequality reduction.</h3><p><em>This blog post was co-written by Nick Galasso, Director of Research Oxfam America; Chiara Mariotti, Inequality Policy Manager Oxfam Great Britain; and Nadia Daar, Head of Oxfam International’s Washington, DC office.</em></p><p>For years, the&nbsp;International Monetary Fund (IMF) promoted policies to countries that worsened economic inequality. These increases, the Fund claimed, were an unfortunate trade-off to achieving greater economic growth.</p><p>Thankfully, the IMF now concedes the ‘equity/growth’ trade off is flawed. Indeed, the IMF has turned around sharply on inequality. These days it is claiming that tackling inequality is critical to its mandate of ensuring global economic stability and growth. The Fund arrived at this conclusion through its own research and analysis, and civil society’s longstanding critique of its policies. Yet, while the Fund is saying the right things on inequality, its policy advice fails to match its research and rhetoric.</p><p><strong>For Oxfam, it has been thrilling to watch</strong> the IMF’s research dispel many ‘inequality myths.’ For instance, IMF researchers put to bed the so-called trade-off between growth and equity with work finding that <a href="https://www.imf.org/external/pubs/ft/sdn/2011/sdn1108.pdf" rel="nofollow">inequality, in fact, harms growth</a>. And high levels of gender inequality in the economy make the damaging effects on growth even worse. Likewise, <a href="https://www.imf.org/external/pubs/ft/sdn/2014/sdn1402.pdf" rel="nofollow">redistribution</a> (once thought to be a drag on growth) has pretty benign effects; and since it reduces inequality, it is instead pro-growth.</p><p>Equally thrilling is Christine Lagarde’s regular <a href="https://www.imf.org/en/News/Articles/2015/09/28/04/53/sp102215" rel="nofollow">mention of Oxfam’s inequality research</a> in her public statements. Lagarde is an important champion for the IMF’s inequality agenda. Last week, <a href="http://www.imf.org/en/News/Articles/2017/10/04/sp100517-a-time-to-repair-the-roof" rel="nofollow">she reminded a Harvard audience</a> that excessive inequality hinders growth and hollows out a country’s economic foundation.</p><p>Of course, Oxfam believes there are many other reasons to address inequality beyond growth concerns. Inequality causes poverty to reduce more slowly. Through no fault of their own, poor kids face dismal opportunities in unequal societies. Also, inequality has a <a href="https://www.oxfam.org/en/research/working-few" rel="nofollow">toxic effect on democracy</a>.</p><p><strong>Given our broad concerns about inequality</strong>, what the IMF does and says matters a great deal to Oxfam. The IMF’s influence and reach extends to shaping the contours of the global economy. At the national level, its policy advice impacts who becomes economic winners and losers.</p><p>Since the Fund now claims inequality is crucial to its mandate, Oxfam set out to understand how inequality is becoming operationalized in its work.</p><p>The answer, so far, is a series of ‘<a href="https://www.imf.org/en/News/Articles/2017/02/16/vc02162016-Response-to-Article-The-IMF-is-Showing-Some-Hypocrisy-on-Inequality" rel="nofollow">inequality pilots</a>.’ These pilots integrate inequality into several of the Fund’s regular Article IV consultations – the Fund’s annual country surveillance exercises done in consultation with member countries and stakeholders. Intrigued, we decided to dig deeper and see what these pilots were about.</p><h3>Great Expectations?</h3><p>In a report launched this week called <a href="https://www.oxfam.org/sites/www.oxfam.org/files/file_attachments/bp-great-expectations-imf-inequality-101017-en.pdf" rel="nofollow">Great Expectations</a>, Oxfam assesses fifteen of the Article IV inequality pilots conducted by the IMF. We find that, <strong>despite some improvements, the IMF is still failing</strong> to provide policy advice to countries that can help reduce inequality.</p><p>In the pilots we examined, we did find some shifts in policy advice in certain areas. However, in none could we identify a systematic inclusion of inequality in policy advice to countries.</p><p>Here are our key findings:</p><ol><li><strong>The most significant shift is observed in tax policy advice, where direct and more progressive taxes are often recommended.</strong> In all countries examined, the IMF recommended safeguarding social spending; however without verifying whether this was compatible with its fiscal adjustment recommendations. On labor markets, the IMF is maintaining a conservative stance. We worry its advice could undermine economic and gender equality, such as the reduction in public wage bills.</li><li><strong>When IMF advice called for fiscal adjustment or monetary tightening, in none of the pilots were the inequality effects of these targets were assessed.</strong> Further, no policy alternatives to achieve these macro-economic targets – such as a slower reduction of the deficit or the inflation rate – were discussed. Instead, they focus on the distributional impact of one single structural reform (i.e., tweaking the value-added tax, cutting subsidies, deregulation).</li><li><strong>The pilots demonstrate the IMF isn’t taking its own concerns seriously about the economic threats of inequality.</strong> Throughout the pilots, we see the IMF recommend policies that will knowingly increase They then offer measures to compensate the losers of such policies – often the most vulnerable. If the IMF is serious about the macro-economic concerns inequality provokes, then they should begin with policies that attack inequality rather than mitigating harm caused by their advice.</li></ol><p>Overall, the pilots are a step toward integrating inequality in the IMF’s policy advice. But they are a small step, and fail to provide comprehensive advice to countries on how to tackle inequality.</p><p>This week, the International Monetary Fund put forward a new edition of its biannual <a href="https://actions.oxfam.org/international/humaneconomy/human-economy-action/" rel="nofollow">Fiscal Monitor</a>, in which it recommends countries to tax the rich more, increase public investment in health and education as a solution to inequality, and consider introducing a universal basic income. This is a welcome example of a high profile publication which can significantly contribute to shape the global debate on inequality. But it is time for the IMF to cast its influence well beyond words into policies and programs. A far more radical overhaul is needed in the way it does business. We urge the institution to take the bold steps which could concretely make a difference in the global fight against excessive inequality.</p><p><em>Posted on 13 October 2017.</em></p><h3>What you can do now</h3><p><strong><a href="https://actions.oxfam.org/international/humaneconomy/human-economy-action/" rel="nofollow">Join the movement to end extreme inequality</a><br></strong></p><p></p></div><div class="field field-name-title"><h2>The IMF’s bold moves on inequality are still unconvincing</h2></div> Fri, 13 Oct 2017 14:34:42 +0000 Guest Blogger 81246 at http://l.blogs.oxfam http://l.blogs.oxfam/en/blogs/17-10-13-imfs-bold-moves-inequality-are-still-unconvincing#comments My message to world leaders: To finance development you must tackle tax http://l.blogs.oxfam/en/blogs/15-05-05-my-message-world-leaders-finance-development-you-must-tackle-tax <div class="field field-name-body"><p><em>Last month Oxfam’s International Executive Director Winnie Byanyima was in Washington for the World Bank/IMF Spring Meetings, and then in New York for one of the drafting sessions ahead of the Financing for Development (FFD) Conference in Addis Ababa taking place in July.</em></p> <p>In Washington and New York last month I had a clear mission: Firstly, I wanted to raise the profile of the forthcoming <a href="http://www.un.org/esa/ffd/overview/third-conference-ffd.html">Financing for Development (FfD) conference</a> taking place in Addis Ababa this July. We need the highest possible political attendance here if we hope to make progress towards the Sustainable Development Goals, or a deal on climate change. There are major summits on these issues this year, and the key question for both is: “Who will pay?”</p> <p><strong>Secondly, I wanted to stress the importance of tackling tax dodging</strong> and harmful tax competition in the context of this financing debate. Just last month a new <a href="http://investmentpolicyhub.unctad.org/Blog/Index/42">report from UNCTAD</a> estimated that developing countries lose <a href="http://uncounted.org/2015/03/26/unctad-study-on-corporate-tax-in-developing-countries/">hundreds of billions</a> of dollars, because of tax dodging by multinational corporations. If these companies can run rings around our tax systems; If the privileged few can stash their earnings in tax havens; if countries continue to compete to offer the lowest tax rates and deals, in a sometimes misguided bid to attract investment; then poor country governments will never get the chance to raise the money they need to tackle poverty and inequality.</p> <p><strong>To address this, poor countries need a seat at the table</strong> and an equal say when global tax rules are being discussed. This is why we are calling for the Addis Ababa Financing for Development Conference to ensure that one of its official roundtables is on international tax cooperation. This would be a space where all countries could address the issue as equals. Ultimately, developing countries and groups like Oxfam want to see a new intergovernmental body on cooperation in tax matters under the auspices of the United Nations. Such a round table at the FfD could be an important step towards agreeing this.</p> <h3>So how did I do in my mission?</h3> <p>There were some encouraging signs. I was not the only one trying to increase the political profile of the Financing for Development Conference. Jim Kim of the World Bank and Christine Lagarde of the IMF both raised the importance of FFD in official interventions, made it central to a meeting of ministers discussing development, and organised <a href="http://www.imf.org/external/meetings/NewSchedule.aspx?meetingid=18">several high level events</a> on it (one of which featured my colleague Ray Offenheiser, President of Oxfam America). </p> <p>Significantly The UN Secretary General, as well as the President of the UN General Assembly came to the Spring Meetings to lobby finance ministers for this very purpose. I was able to thank them for this when I later met them both in New York. They told me they see a growing momentum towards Addis but there remains a big risk that it will be the poorer countries that send their finance ministers, whilst the G7 send only junior ministers from development cooperation departments. This would betray a real double standard: The big guns will come to the Spring Meetings to talk about their own financial stability, but don’t bother when it comes to the financial survival of some of the world’s poorest economies. This is both unfair and unwise thinking, as ultimately the fates and fortunes of poorer countries may affect the long-term prospects of richer ones.</p> <blockquote class="twitter-tweet" lang="en" xml:lang="en"><p lang="en" dir="ltr" xml:lang="en">I recently met President of UN General Assembly Sam Kutesa 2 discuss Financing for Devt &amp; tax cooperation <a href="https://twitter.com/hashtag/ffd2015?src=hash">#ffd2015</a> <a href="http://t.co/hC0WSoLfgt">pic.twitter.com/hC0WSoLfgt</a></p> <p>— Winnie Byanyima (@Winnie_Byanyima) <a href="https://twitter.com/Winnie_Byanyima/status/593665017960079360">April 30, 2015</a></p></blockquote> <script async="" src="//platform.twitter.com/widgets.js" charset="utf-8"></script><p><strong>On tax, the picture is equally mixed.</strong> One highlight was Christine Lagarde calling for action on tax dodging at the Earth Day concert, to 250,000 people. I myself was honoured to facilitate an informal meeting between ministers and representatives from a range of governments, who all agree that tax must be a real priority for Addis. I saw that Scandinavian countries are leading the charge on this amongst rich donor countries. Brazil also wants to see action here, as do many developing countries, particularly in Africa where last year’s African Union report by the Mbeki high level panel illustrated the impact of illicit financial flows. Developing countries are rightly demanding that they have the chance to influence the global tax rules that allow vast sums of money to be squirreled offshore.  </p> <p>But for the EU, US and others there is strong resistance to the idea of a truly global conversation on tax. They point to an ongoing OECD-led process to tackle tax dodging, but this is <a href="http://www.worldfinance.com/strategy/the-true-costs-of-tax-avoidance">a process led by rich countries</a> and focused on rich country issues. It is not addressing the specific needs of poor nations that produce so much of the raw materials but see so little of the proceeds that companies make from them. (As the President of the UN General Assembly said to me, the UK may be rightly concerned about getting the tax it is due from Starbucks, but the UK is a country in which no single coffee tree grows.)</p> <p><strong>So as I return I have cause for optimism, but many reasons for concern.</strong> I can see the political profile of the Financing for Development summit getting bigger, but not big enough. We have to use every moment between now and the summit in July to convince the world’s leading economies to step up to the plate in Addis. In particular the meeting of the <a href="http://www.g7germany.de/Content/EN/StatischeSeiten/G7_elmau_en/texte_en/2014-10-08-ankuendigung-gipfel-elmau_en.html">G7 in June</a> is a chance to remind these countries of their responsibilities - to meet their long-standing development financing commitments - and to step up to the challenge of future financing.</p> <p>On the question of what Addis will actually deliver, I can also see things moving in the right direction. Many donor countries like the sound of developing countries raising their own money. Everyone agrees that such “<a href="http://post2015.org/2014/05/22/domestic-resource-mobilization-a-financing-option-for-sustainable-development-in-africa/">domestic resource mobilisation</a>” must be a big part of the picture. But then these big economies need to realise that their tax rules, their tax treaties, and the actions of their companies are the biggest threat to this happening. Addis is a unique opportunity for poor countries to make this case and demand the right to keep the taxes they are owed. The least that G7 countries can do is support the call for tax to be placed firmly on the FfD agenda, and allow developing countries to be heard.</p> <h3>More posts from Winnie Byanyima</h3> <p><strong><a href="https://blogs.oxfam.org/en/blogs/15-01-23-why-oxfam-calling-world-tax-summit">Why is Oxfam calling for a World Tax Summit?</a></strong></p> <p><a href="https://blogs.oxfam.org/en/blogs/15-02-24-bringing-inequality-message-davos-elite"><strong>Bringing the inequality message to the Davos elite</strong></a></p> <h3>What you can do now</h3> <p><a href="https://act.oxfam.org/international/en/actions/world-tax-summit"><strong>Join the call to make corporations pay their fair share</strong></a></p> <h3>You may also like</h3> <p><strong>Download the report: <a href="https://www.oxfam.org/sites/www.oxfam.org/files/file_attachments/bn-pulling-plug-corporate-tax-eu-190315-en.pdf">Pulling the Plug: How to stop corporate tax dodging in Europe and beyond</a></strong></p> <p> </p> </div><div class="field field-name-title"><h2>My message to world leaders: To finance development you must tackle tax</h2></div> Tue, 05 May 2015 14:34:07 +0000 Winnie Byanyima 26581 at http://l.blogs.oxfam http://l.blogs.oxfam/en/blogs/15-05-05-my-message-world-leaders-finance-development-you-must-tackle-tax#comments Fighting inequality in Latin America: The road ahead http://l.blogs.oxfam/en/blogs/14-12-08-fighting-inequality-latin-america-road-ahead <div class="field field-name-body"><p><em>Last week, I was in Santiago attending a <a href="http://www.imfsantiago2014.org/"><strong>high-level conference </strong></a>hosted by Chile’s Ministry of Finance and the International Monetary Fund.</em></p> <p><em>Along with policy-makers, academics, opinion leaders, and financial sector executives, I was exploring challenges and opportunities for securing inclusive and sustainable growth in Latin America.</em></p> <p><strong>Latin America is proof that the global trend of rising economic inequality can be reversed, if the political will exists.</strong> Despite historically being the most unequal region in the world, it is the only region that has managed to reduce inequality during the past decade.</p> <p>This success is the result of the right mix of government policies that focus on poor people. Increased spending on health and education since 2000 has had the greatest impact on inequality reduction. As a result of social public expenditures, many of the region’s poorest citizens have been able to access essential services without having to become indebted to pay for them. For Latin American youth, education is not only an equalizer but it will stimulate innovation, entrepreneurship and growth.</p> <blockquote class="twitter-tweet" lang="en" xml:lang="en"><p>Increased spending on health, education in Latin America has had the greatest impact on inequality reduction <a href="https://twitter.com/hashtag/IMFSantiago2014?src=hash">#IMFSantiago2014</a></p> <p>— Winnie Byanyima (@Winnie_Byanyima) <a href="https://twitter.com/Winnie_Byanyima/status/540954904794513408">December 5, 2014</a></p></blockquote> <script async="" src="//platform.twitter.com/widgets.js" charset="utf-8"></script><p>Increasing the minimum wage, public pensions and employment opportunities has also created secure livelihoods for millions.</p> <p>But this is not the end of the road. <strong>Despite these advances, Latin America is still the world´s most unequal region.</strong></p> <p>Close to a third of the population live in poverty – while the annual income of Latin America’s 113 billionaires this year is equal to the public budget of El Salvador, Guatemala and Nicaragua put together. That same income is equal to the public health expenditure of nine Latin American countries.</p> <p>So, the question is: Can Latin America remain an example for the world, and maintain and sustain inequality and poverty reduction trends?</p> <p><strong>Oxfam thinks it can – if Latin American governments continue to invest</strong> in health, education and social protection, if alternatives are found to primary commodities exports as the engine of growth, and if progress is bolstered by progressive fiscal reforms.</p> <p>Growth in Latin America over the last decade has been largely driven by the commodity boom. Several economies in the region depend on oil and other extractive industries. This makes their economies vulnerable. Indeed, growth in LAC has now has stalled, and new drivers of growth are being sought. There is a need to diversify from primary commodity sectors, to sectors which can create many jobs.</p> <p>As the<a href="https://www.imf.org/external/pubs/ft/sdn/2013/sdn1310.pdf"><strong> IMF has pointed out</strong></a>, “the challenges of growth, job creation, and inclusion are closely intertwined.” Growth gives women job opportunities, but women’s participation in the labor market is also a part of the growth and poverty-reducing equation.</p> <p><strong>There has been a steady increase in women’s participation</strong> in the labor market in recent decades, but in most countries in the region women are much more likely than men to hold low-paid jobs. The wage gap between men and women is also <a href="http://publications.iadb.org/bitstream/handle/11319/6384/New%20Century%20Old%20Disparities.pdf?sequence=1"><strong>substantial</strong></a>, lagging behind OECD countries.</p> <p>Closing this gap will go a long way to equitable and sustainable development – triggering growth and reducing inequality.</p> <blockquote class="twitter-tweet" lang="en" xml:lang="en"><p><a href="https://twitter.com/hashtag/IMFSantiago2014?src=hash">#IMFSantiago2014</a> Betw 2000-2010,most <a href="https://twitter.com/hashtag/LAC?src=hash">#LAC</a> countries reduced inequality,50mn moved into middle class but region remains most unequal globally</p> <p>— Winnie Byanyima (@Winnie_Byanyima) <a href="https://twitter.com/Winnie_Byanyima/status/541244932514934784">December 6, 2014</a></p></blockquote> <script async="" src="//platform.twitter.com/widgets.js" charset="utf-8"></script><p><strong>Inequality can also be reduced by progressive taxation</strong> – an under-used instrument to reduce in Latin America thus far. A <a href="http://www.oxfam.org/en/research/fiscal-justice-reduce-inequality-latin-america-and-caribbean"><strong>recent Oxfam report</strong></a> highlights the low tax collection levels in the region, in comparison to the great social needs. Our research shows tax systems are largely skewed towards benefitting economic and political elites – rather than the majority of the people.</p> <p>More than half of tax in Latin American and the Caribbean comes from consumption taxes, such as VAT. This means the poorest devote a greater share of their income to pay taxes than the rich.</p> <p>Further, corporate tax exemptions in the region amount to $138,000 million per year. In the Dominican Republic tax exemptions for free zones, tourism and other industries are about $720 million - enough to double the health budget. In Nicaragua in 2008 tax exemptions amounted to $415.6 million, 40 per cent more than the Ministry of Health’s total budget that year.</p> <p><strong>Enormous tax evasion in the region is also a problem</strong>. <a href="http://www.oxfam.org/en/research/fiscal-justice-reduce-inequality-latin-america-and-caribbean"><strong>Oxfam’s calculation</strong></a> is that money hidden in tax havens would be enough for 32 million people to be lifted out of poverty. That is, all people living in poverty from Bolivia, Colombia, Ecuador, El Salvador and Peru.</p> <p>Latin American leaders should improve their domestic resource mobilization systems, cooperate to stop the race to the bottom on corporate tax exemptions, and demand a say in the G20/OECD-led negotiations to reform global tax rules for curbing illicit financial flows.</p> <blockquote class="twitter-tweet" lang="en" xml:lang="en"><p>Latin American money hidden in tax havens would be enough to lift 32 million people out of poverty <a href="http://t.co/yCPlYBTXgW">http://t.co/yCPlYBTXgW</a> <a href="https://twitter.com/hashtag/IMFSantiago2014?src=hash">#IMFSantiago2014</a></p> <p>— Winnie Byanyima (@Winnie_Byanyima) <a href="https://twitter.com/Winnie_Byanyima/status/540955083111153664">December 5, 2014</a></p></blockquote> <script async="" src="//platform.twitter.com/widgets.js" charset="utf-8"></script><p><strong>Courageous steps have been taken</strong> by many Latin American leaders in the last decade, and the successes speak for themselves. Now more courageous reforms are needed, to achieve a fiscal system which will dislodge entrenched inequalities and benefit all Latin America’s people equally, and in the long term.</p> <p><em>Originally published on the Huffington Post as: <a href="http://www.huffingtonpost.com/winnie-byanyima/inclusive-sustainable-gro_b_6278690.html">Inclusive, Sustainable Growth Latin America: The Road Ahead</a></em> </p><p><em>Photo: Emelina Dominguez, agricultural technician, 42, tending to her vegetables. Honduras, 14 January 2007. Photo: Gilvan Barreto/Oxfam</em></p> <h3>What you can do</h3> <p><strong><a href="http://www.oxfam.org/en/campaigns/even-it-up">Join the campaign to fight extreme inequality</a></strong></p> <p><strong><a href="http://blogs.oxfam.org/en/blogs/1859">Read more blogs on inequality</a></strong></p> <p><strong>Download the flagship Oxfam report: <a href="http://www.oxfam.org/en/research/working-few">Working for the Few: Political capture and economic inequality</a></strong></p> </div><div class="field field-name-title"><h2>Fighting inequality in Latin America: The road ahead</h2></div> Mon, 08 Dec 2014 18:20:58 +0000 Winnie Byanyima 24205 at http://l.blogs.oxfam http://l.blogs.oxfam/en/blogs/14-12-08-fighting-inequality-latin-america-road-ahead#comments A cautionary tale: Europe's bitter crisis of austerity and inequality http://l.blogs.oxfam/en/blogs/13-09-13-cautionary-tale-europes-bitter-crisis-austerity-inequality <div class="field field-name-body"><p><em>By Winnie Byanyima and Sharan Burrow</em></p> <p><strong>Because of austerity, Europeans may have to live through the type of disastrous period experienced by Latin Americans, Asians and Africans in the 1980s and 1990s.</strong></p> <p>Europe's aggressive plans to balance the books by slashing public spending are proving to be a disaster. By ignoring mistakes from history, Europe risks repeating them. The most vulnerable people in Europe are facing an ‘austerity winter' that could last a generation.</p> <p>The European Union is in a bitter crisis of unemployment and inequality that is driving economic instability and social despair. One in two working families are directly affected by the loss of jobs or reduction of working hours, according to this year's International Trade Union Confederation's Global Poll.</p> <p>Already by the end of last year, more than 24% of Europe's population, 121 million people, were living at risk of poverty. We predict that number could rise by up to 25 million by 2025 unless austerity policies are scrapped and an alternative course set.</p> <p>Unions and poverty relief organizations see the axe of austerity falling on the most vulnerable people much as it did in Latin America, south-east Asia and sub-Saharan Africa throughout the 1980s and 1990s. This disastrous period saw the World Bank and the International Monetary Fund (IMF) force ‘structural adjustment' – austerity by another name – upon indebted countries. Wages fell, labor rights disappeared, inequality rocketed, health and education services were lost to all but those who could afford to pay for them. It took 25 years for Latin America to claw its way back to pre-crisis poverty levels, 10 years for south-east Asia. A new report by Oxfam – “<a href="http://www.oxfam.org/en/policy/cautionary-tale-austerity-inequality-europe" rel="nofollow"><strong>A Cautionary Tale</strong></a>” – describes their similarities then with Europe now. They only managed to recover prosperity by taking steps that were entirely contrary to the IMF's prescription, such as increasing rather than cutting social spending, tackling inequality, and re-building public institutions.</p> <p><strong><em>"By the end of last year, more than 24% of Europe's population, 121 million people, were living at risk of poverty."</em></strong></p> <p><strong><em></em></strong></p> <p>But the new IMF is still the old IMF. Even its own research shows that austerity is not working. While fiscal consolidation over time is certainly prudent management, the social and economic benefits of austerity policy lacks even a credible academic base. The IMF should reform its own policies to reflect practical realities.</p> <p>Austerity is failing on its own terms: debts have not fallen fast enough, in some countries they have even gone up. At the same time, austerity is causing a terrible human cost too.</p> <p><strong>Globally, austerity hurts too.</strong> The IMF, for the seventh consecutive time in June, revised down global growth projections to a mere 3.1%. While we may be seeing the decline in advanced economies stall, Brazil, Russia, India, China and South Africa –the BRICS bloc of emerging countries – have become the latest casualty of falling demand due to the impact of austerity.</p> <p>In Europe, the UK will cut 1.1 million public-sector jobs by 2018; twice as many women will lose their jobs than men. Greece, Latvia, Portugal and Romania have slashed their social-security budgets by more than 5%. Across Europe, health spending last year dropped for the first time in decades, real wages fell and unemployment rates hit their highest levels in a decade. Almost one in ten working households in Europe now lives in poverty.</p> <p><strong>The gap between rich and poor</strong> people is widening fastest inside those countries that are most aggressively pursuing these budget-slashing policies – the UK, Greece, Portugal, Spain, Italy and Ireland. One or more of these could blow out to become among the most unequal countries in the world by 2025. The beneficiaries of austerity, beyond the banks that caused the shattering €4.5 trillion public debt blow-out in the first place, are the richest 10% of Europe's population who alone have seen their share of the income pie increase.</p> <p>Europe is putting its people – more accurately, the 90% outside the top income bracket – through unnecessary pain and suffering. There are clear alternatives available, such as dialogue with workers and their unions, smart targeted investment in people and decent work and a social protection floor, over the blunt knife of public spending cuts.</p> <p><em><strong>Winnie Byanyima</strong> is Oxfam International's executive director and <strong>Sharan Burrow</strong> is general secretary of the <a href="http://www.ituc-csi.org/?lang=en" target="_blank" rel="nofollow"><strong>International Trade Union Confederation</strong></a> (ITUC).</em></p> <p><em>Originally published by <strong><a href="http://www.europeanvoice.com/article/2013/september/a-cautionary-tale/78175.aspx" target="_blank" rel="nofollow">European Voice</a></strong></em>.</p> <p><a href="http://blogs.oxfam.org/sites/blogs.oxfam.org/files/6069_eu_austerity_infographic-oix1000.png"></a></p> <h3>You may also like</h3> <p><strong><a href="http://www.oxfam.org/en/policy/cautionary-tale-austerity-inequality-europe" rel="nofollow">11 country case studies </a>on austerity and inequality in Europe</strong></p> <p><strong>Blog: <a href="http://blogs.oxfam.org/en/blogs/13-04-05-keeping-eye-have-mores">The Post-2015 agenda: Keeping an eye on the have-mores</a></strong><a href="http://blogs.oxfam.org/en/blogs/13-04-05-keeping-eye-have-mores"></a></p></div><div class="field field-name-title"><h2>A cautionary tale: Europe&#039;s bitter crisis of austerity and inequality</h2></div> Fri, 13 Sep 2013 16:35:48 +0000 Winnie Byanyima 10428 at http://l.blogs.oxfam http://l.blogs.oxfam/en/blogs/13-09-13-cautionary-tale-europes-bitter-crisis-austerity-inequality#comments World Bank and IMF meetings – battle of the brands http://l.blogs.oxfam/en/blog/11-09-23-world-bank-imf-meetings-battle-brands <div class="field field-name-body"><p><strong>It’s the time of year when Washington DC fills up with finance ministers, development ministers and central bank governors, all in town for a G20 meeting and for the annual meetings of the World Bank and IMF. Oxfam is also here, lobbying for policies that benefit people living in poverty, and trying to keep attention on the most marginalized in the midst of fears about eurozone debt and US deficits.</strong></p> <p>This year’s meetings are arguably the most ‘branded’ in the memories of the aged Oxfam team members. Everything – from note pads to coffee cup holders – is branded with the annual meetings logo, but much more prominent is branding for the World Bank’s <strong><a href="http://thinkequal.worldbank.org" rel="nofollow">ThinkEqual campaign</a></strong>, linked to the release of the Bank’s <strong><a href="http://go.worldbank.org/U6VCPKOOB0" rel="nofollow">2012 World Development Report on gender equality</a></strong>. While Oxfam would love to see a greater discussion of power relations and recent crises, we think this report is a very important, high-profile recognition of the intrinsic value of women’s rights – including women’s rights to have decision-making power at home and in society. (See a <strong><a href="http://www.oxfamblogs.org/fp2p/?p=6807" rel="nofollow">blog by Oxfam’s Duncan Green</a></strong> for more on the report, and Oxfam's <strong><a href="http://raisinghervoice.ning.com/" rel="nofollow">Raising Her Voice project</a></strong> for what women are doing to make this shift in power a reality.)</p> <p><strong>Giant posters on the front of the World Bank’s main building</strong> feature real women from around the world <strong><a href="http://www.flickr.com/photos/worldbank/sets/72157627394517497" rel="nofollow">holding signs asking ‘Equal?’ </a></strong>in their languages, and the ThinkEqual brand is everywhere – including on the t-shirts of staff (although unlike Oxfam campaigners, many are wearing suits over them). A non-scientific survey of Oxfam and civil society allies ranks this branding ahead of the IMF’s (equally giant) posters of happy-looking, internationally-diverse people, resembling somewhat dated mobile phone advertising campaigns.</p> <p><strong>Meanwhile there is a rogue brand creeping in:</strong> Oxfam activists who are calling for a <strong><a href="https://www.oxfam.org/en/campaigns/health-education/robin-hood-tax" rel="nofollow">Robin Hood Tax on financial transactions</a></strong> – which could instantly raise billions for development and climate change adaptation – have already seen IMF staff wearing Robin Hood badges, and now G20 officials have started asking us for Robin Hood hats. And although one official from a G20 country which is less enthusiastic about the tax asked us if he should wear a Sheriff of Nottingham hat, the news that the European Commission has already produced a formal proposal for a European tax from January 2014 suggests that the momentum is with Robin right now.</p> <h3>Read more</h3> <p><strong><a href="http://www.robinhoodtaxvideo.org/en/" rel="nofollow">Make your own Robin Hood Tax Film, starring Bill Nighy and...you!</a></strong></p> <p><strong><a href="http://www.oxfam.org/en/campaigns/health-education/robin-hood-tax" rel="nofollow">Sign the petition calling for a Robin Hood Tax</a></strong></p></div><div class="field field-name-title"><h2>World Bank and IMF meetings – battle of the brands</h2></div><ul class="links inline"><li class="translation_es first"><a href="http://l.blogs.oxfam/es/blog/11-09-23-reuniones-del-banco-mundial-y-del-fmi-la-batalla-de-las-marcas" title="Reuniones del Banco Mundial y del FMI: la batalla de las marcas" class="translation-link" xml:lang="es">Español</a></li> <li class="translation_fr last"><a href="http://l.blogs.oxfam/fr/blog/11-09-26-reunions-banque-mondiale-fmi-bataille-image" title="Réunions de la Banque mondiale et du FMI : la bataille de l’image" class="translation-link" xml:lang="fr">Français</a></li> </ul> Fri, 23 Sep 2011 15:36:55 +0000 Caroline Pearce 9588 at http://l.blogs.oxfam http://l.blogs.oxfam/en/blog/11-09-23-world-bank-imf-meetings-battle-brands#comments The IMF on the Root Causes of the Global Economic Crisis http://l.blogs.oxfam/en/blog/10-04-19-imf-root-causes-global-economic-crisis <div class="field field-name-body"><p><em>This blog is part of a short series of Oxfam blogs on the role of international financial institutions, and the fight against poverty.</em></p> <p><strong>The IMF has quietly issued a surprising piece of research that speaks directly to who and what is to blame for the global economic crisis: that is, US politicians at the national level who loosened regulation of mortgage lenders and on the rest of the US financial sector.</strong></p> <p>The working paper, “<strong><a href="http://www.imf.org/external/pubs/ft/wp/2009/wp09287.pdf" rel="nofollow">A Fistful of Dollars: Lobbying and the Financial Crisis</a></strong>,” caries the standard disclaimer that it should not be reported as representing the views of the IMF. However, the Fund’s willingness to produce such research – which candidly documents <strong>irresponsible, risky practices in rich countries</strong> – will be important as the debate on an expanded role for the institution begins to heat up this month.</p> <p>An increase in the role and size of the IMF, including an expansion of its surveillance activities to provide early warning of future financial crises, will be a major agenda item during the upcoming World Bank-IMF Spring Meetings.</p> <p>The IMF paper carefully documents the <strong>campaign contributions and lobbying expenditures</strong> of US mortgage companies and financial industry associations. For example, it reports that two of the largest mortgage lenders in the US, Ameriquest Mortgage and Countrywide Financial spent an astonishing $20.5 million and $8.7 million respectively in political donations, campaign contributions and lobbying activities in the run up to the crisis from 2002 through 2006.</p> <p></p> <p><em>Figure: The evolution of lobbying intensity (expenditures per firm) over time. Index 1998=100. Credit: Igan/Mishra/Tressel</em></p> <p>The paper then finds that these and other US mortgage lenders, which were the most heavily involved in predatory lending activities, were also the most active in lobbying and paying campaign contributions to US politicians at the national level to loosen the existing regulatory framework and to defeat new regulations that would have curtailed their reckless behavior.</p> <p>In the wake of the financial collapse in September 2008, the IMF took criticism for its failure to speak up about the lax US regulation of financial institutions. The Fund’s failure to issue candid reporting on the US was spectacular given that preventing financial crises – or at the very least providing early warning of them through its surveillance – is one of the primary functions of the IMF.</p> <p><strong>The Fund’s muted pre-crisis warnings raise questions about the institution’s willingness to treat developed and developing countries in an evenhanded way</strong> in its reporting, the IMF’s Independent Evaluation Office observes in this <strong><a href="http://www.ieo-imf.org/eval/ongoing/economic_crisis.pdf" rel="nofollow">draft scoping paper</a></strong>. (A paper which mentions the negligent pre-crisis failure of the Fund to carry out a routine Financial Sector Assessment Program report on the risks associated with practices in the US financial sector.)</p> <p>Let’s hope that the new paper’s no-nonsense willingness to speak candidly about rich countries is a sign that the Fund has finally firmed its backbone about risky wealthy country behavior.</p> <h3>Read more</h3> <p><strong>First blog of the series: </strong><strong><a href="/en/blog/10-04-16-tax-collection-stagnates-low-income-countries-imf" rel="nofollow">Tax Collection Stagnates in Low-Income Countries: What’s Been the IMF’s Role?</a></strong></p> <p><strong><a href="http://www.oxfam.org/en/pressroom/pressrelease/2010-04-21/poor-countries-cutting-back-crisis-response-imf" rel="nofollow">Poor countries cutting back crisis response too soon</a></strong></p></div><div class="field field-name-title"><h2>The IMF on the Root Causes of the Global Economic Crisis</h2></div><ul class="links inline"><li class="translation_es first"><a href="http://l.blogs.oxfam/es/blog/10-04-19-el-fmi-opina-sobre-raices-crisis-economica-mundial" title="El FMI opina sobre las raíces de la crisis económica mundial" class="translation-link" xml:lang="es">Español</a></li> <li class="translation_fr last"><a href="http://l.blogs.oxfam/fr/blog/10-04-19-fmi-causes-fondamentales-de-la-crise-economique-mondiale" title="Le FMI s&#039;exprime sur les causes fondamentales de la crise économique mondiale" class="translation-link" xml:lang="fr">Français</a></li> </ul> Mon, 19 Apr 2010 10:00:00 +0000 Pamela Gomez 9073 at http://l.blogs.oxfam http://l.blogs.oxfam/en/blog/10-04-19-imf-root-causes-global-economic-crisis#comments Tax Collection Stagnates in Low-Income Countries: What’s Been the IMF’s Role? http://l.blogs.oxfam/en/blog/10-04-16-tax-collection-stagnates-low-income-countries-imf <div class="field field-name-body"><p><em>This is the first of a short series of Oxfam blogs on the role of international financial institutions, and the fight against poverty.</em></p> <p><strong><a href="http://www.soas.ac.uk/cdpr/publications/dv/file55026.pdf" rel="nofollow">Government tax collection in low-income countries stagnated</a></strong> throughout the 1990s and 2000s, according to a new paper by the Center for Development Policy at the University of London.</p> <p>A government tax take that amounts to less that 15 percent of GDP is widely considered to be low. By way of comparison, typical collection rates in rich countries are around 40 percent of GDP, says the CDP paper, “<strong><a href="http://www.soas.ac.uk/cdpr/publications/papers/file54440.pdf" rel="nofollow">Is Stagnation of Domestic Revenue in Low-Income Countries Inevitable?</a></strong>”</p> <p>But average revenue collection rates in Sub-Saharan African countries stood at only 13.3 percent of GDP during 1990 to 1994. They increased very slightly to 15.6 percent during 2000 to 2006.</p> <p>This small increase of 2.3 percent is only slightly more than half of the very modest goal of a 4 percent increase in developing countries that the UN has said is needed to achieve the Millennium Development Goals by 2015.</p> <p>And the researchers found that – and this is even more alarming – most of this slight increase came from sources such as value added taxes, which tend to <strong>burden the poor more heavily than the wealthy</strong>. Other types of taxes that they looked at which tend to be more progressive, such as those on imports or exports, or on corporate and personal income, didn’t increase as much.</p> <p>The alarmingly low collection rates and lack of progressivity immediately make me wonder what’s been the impact of the advice and technical assistance the International Monetary Fund has been giving to developing countries on tax policy over the past two decades?  <strong>The Fund is supposed to be a key, if not the primary, provider of advice to developing governments on tax policy</strong>.</p> <p><strong><a href="http://www.imf.org/" rel="nofollow">A look at the Fund’s website</a></strong> fails to turns up any evaluation of its technical assistance and policy advice in the area of tax administration and tax policy. The Fund should be providing much more research and evaluation of <strong>what the impact of its own technical assistance, policy advice and conditionality have been</strong> on tax policy and tax administration in emerging and low income countries. And a central focus of the Fund’s analysis should be the <strong>progressivity of tax policy</strong>. This includes openly tackling issues such as tax takes on extractive industry projects, the political economy of earmarking and tax exemptions, and the performance of large taxpayer units.</p> <h3>Read more</h3> <p><strong>Next blog of the series: <a href="/en/blog/10-04-19-imf-root-causes-global-economic-crisis" rel="nofollow">The IMF on the Root Causes of the Global Economic Crisis</a></strong></p> <p><strong></strong><strong><a href="http://www.oxfam.org/en/pressroom/pressrelease/2010-04-21/poor-countries-cutting-back-crisis-response-imf" rel="nofollow">Poor countries cutting back crisis response too soon</a></strong></p></div><div class="field field-name-title"><h2>Tax Collection Stagnates in Low-Income Countries: What’s Been the IMF’s Role?</h2></div><ul class="links inline"><li class="translation_es first last"><a href="http://l.blogs.oxfam/es/blog/10-04-19-el-fmi-opina-sobre-las-raices-de-la-crisis-economica-mundial" title="El FMI opina sobre las raíces de la crisis económica mundial (2)" class="translation-link" xml:lang="es">Español</a></li> </ul> Fri, 16 Apr 2010 10:58:00 +0000 Pamela Gomez 9074 at http://l.blogs.oxfam http://l.blogs.oxfam/en/blog/10-04-16-tax-collection-stagnates-low-income-countries-imf#comments Oxfam supporters show their golden touch http://l.blogs.oxfam/en/blog/09-10-06-oxfam-supporters-show-their-golden-touch <div class="field field-name-body"><p>A big outcry from Oxfam supporters and others has helped convince the IMF to use some of its gold to help the poorest countries weather the storm of the economic crisis. They haven’t given as much as we asked – but thank you for ensuring that the poorest countries got some of these resources upfront.</p> <p>Back in April, we asked you to email the head of the <strong><a href="http://www.imf.org/external/index.htm" rel="nofollow">International Monetary Fund</a></strong> (IMF), asking him to find extra money for the poorest countries from sales of IMF gold. The IMF’s reserves include vast pots of gold: <strong>more than 100 million ounces</strong>. It was already planning to sell some of this and invest the profits, to earn an income over the long term. But given that gold prices were going sky-high – raising the potential profits – whilst the poorest countries needed emergency support straight away, we were asking that at least $5 billion of the expected earnings went immediately to the poorest countries, without harmful conditions and with some of it funding much-needed debt relief. Many of you sent emails, putting significant pressure on the IMF as it finalized plans for the use of this gold. </p> <p>In late September, the IMF announced its Board’s decision: it is now planning to dedicate some of the gold sales money to supporting the world’s poorest countries. <strong>This is a shift in policy, and there’s no doubt that your pressure played a part.</strong></p> <p>However, the IMF has not been as bold as we would have liked: instead of the $5 billion for poor countries that we were asking for – some of which could be spent on debt relief or grants rather than new loans – the IMF is so far planning to use around $1 billion from gold sales to subsidise interest-free loans to these countries. It’s also using some other internal resources, and – more worryingly – is asking richer members to provide some more money from their aid budgets. We don’t think this is necessary, and that <strong>the IMF can find enough from the gold sales without asking governments to use up scarce aid budgets</strong>.</p> <p>We are keeping up the pressure – on the IMF and on governments – to find more financing for poor countries, without trapping them in debt once again. In countries that already had millions of children out of school and one doctor for every 50,000 people, this global economic crisis is squeezing governments that are already dry. There are other <strong><a href="http://www.oxfam.org/en/pressroom/pressrelease/2009-09-04/bailout-need-not-cost-taxpayers-more-money" rel="nofollow">innovative ways to find desperately-needed cash</a></strong>, besides IMF gold: like introducing tiny taxes on the millions of currency transactions happening in financial markets, or clamping down on the tax havens where multinational companies hide their profits. </p> <p>We have some big opportunities to call for these policies in the coming months, and we’ll be in touch to let you know what you can do. In the meantime – <strong>thanks for keeping up the pressure</strong>, and for showing, once again, your golden touch and if you want to do more make your <strong><a href="http://www.oxfam.org/en/campaigns/health-education/big-promise" rel="nofollow">Big Promise</a></strong> today.</p></div><div class="field field-name-title"><h2>Oxfam supporters show their golden touch</h2></div> Tue, 06 Oct 2009 16:42:15 +0000 Caroline Pearce 8866 at http://l.blogs.oxfam http://l.blogs.oxfam/en/blog/09-10-06-oxfam-supporters-show-their-golden-touch#comments The antidote to crisis http://l.blogs.oxfam/en/blog/09-04-29-antidote-crisis <div class="field field-name-body"><p>I’m writing this from a windowless room in the IMF basement where our Oxfam team has been camped out for almost a week covering the World Bank and International Monetary Fund <a href="http://www.imf.org/external/spring/2009/index.htm" rel="nofollow"><strong>Spring Meetings</strong></a>. You can really lose your perspective down here, away from the sunlight and the bustling streets of Washington. So we keep reminding each other to get outside to enjoy a few minutes of spring sunshine every once in a while to stay grounded.</p> <p>The World Bank and IMF member governments attending these meetings also need to stay grounded in reality! Outside the marble, glass and steel of the impressive Bank/Fund complex, and miles away from Washington, developing countries are already starting to suffer the crushing effects of the global financial crisis, a disaster they did not cause.</p> <p>Based on new IMF statistics released this week, we estimated that 90 million more people will be pushed into extreme poverty this year alone due to the crisis. That’s more than the entire population of Germany.</p> <p>But wealthy governments are acting like the only problem is in their own balance sheets. And this week IMF member countries have been bickering about how to use the profits from selling its gold reserves, instead of taking decisive action to use this money to help struggling low-income countries.</p> <p>This is why we are asking you to weigh-in and <a href="http://www.oxfam.org/en/imf-golden-touch" rel="nofollow"><strong>ask Dominique Strauss-Kahn (Managing Director of the IMF) and the IMF to put its gold to work for the poorest countries</strong></a>. Our thanks go to the over 1,000 of you who acted quickly and took the action on our website. Thanks to your messages to the IMF, some important progress has been seen – the IMF agreed to double its spending for poor countries in principle. But there was no specific agreement about how to make this happen yet. Rather than letting them off the hook, we want you to keep the pressure on – get your friends to call on the IMF to do the right thing now. We are meeting the IMF in the next few weeks so help us show them that this gold sales package must help the world's poor.</p> <p>To highlight the need for the kind of support that gold sales could give to the poorest countries, our colleagues from Sub-Saharan Africa have come here to share their experience of the frightening ripple effects of the global crisis in their home countries. There are real fears that spending on public services like <a href="http://www.oxfam.org/en/video/2009/reality-healthcare-people-developing-countries" rel="nofollow"><strong>healthcare</strong></a> and education will be cut in these poorest countries, where they are already grossly under-funded.</p> <p>I can’t help but think about the impact of the economic crisis on the 75 million kids around the world who are not in school. Will it be even less likely that they get the chance to learn to read and write? And just as terrible, what about those who are in school today that might not be able to attend next month or next year if schools begin closing for lack of public funding? What could this mean for a whole generation?</p> <p>Thankfully, some people at these meetings have been paying attention. I found some hope at a breakfast meeting I attended yesterday on education. The room was full of influentials, including the people in charge of aid in the Danish, British and Dutch governments. They met to talk about how to drum up enough money for education and make this aid more effective, and it was clear from the commitment of these particular donors that they will not forget the world’s children. But other donors must urgently step up with new commitments. <a href="http://www.unesco.org/en/efareport/reports/2009-governance/" rel="nofollow"><strong>Aid for education has stagnated</strong></a> in the past few years and education has been neglected by the global community in favor of other issues.</p> <p>I was energized by the Global Campaign for Education’s action week <a href="http://www.flickr.com/photos/25407568@N02/collections/72157614996157107/" rel="nofollow"><strong>launch event</strong></a>, where Queen Rania of Jordan, US Congresswoman Nita Lowey, and high level representatives of the Obama administration spoke passionately about the importance of education for all the world’s children. Momentum in the US and around the world seems to be building, despite the dismal economic situation, because more and more people are realizing that education is the antidote to crisis.</p> <p><a href="http://www.oxfam.org/en/imf-golden-touch" rel="nofollow"><strong>Ask Dominique Strauss-Kahn (Managing Director of the IMF) and the IMF to put its gold to work for the poorest countries.</strong></a></p></div><div class="field field-name-title"><h2>The antidote to crisis </h2></div> Wed, 29 Apr 2009 16:38:22 +0000 Katie Malouf Bous 8770 at http://l.blogs.oxfam http://l.blogs.oxfam/en/blog/09-04-29-antidote-crisis#comments