By Soren Ambrose
NEW YORK, Jul 27 2015 (IPS)

The final round of negotiations on the Sustainable Development Goals – the successor to the Millennium Development Goals, due to be inaugurated in September at the U.N. General Assembly – is now underway in New York.

Courtesy of Soren Ambrose/ActionAid

The United Nations and many member governments want to conclude the debates by the end of July, so that there will not be open debate during the SDG Summit. But reports indicate that the atmosphere in the room is one of seething distrust.

That’s because of what happened during the Financing for Development (FfD) conference in Addis Ababa, Ethiopia last month.

The developing countries – those grouped together in the “G77,” which 50 years after its founding actually has 134 members – were pushing a proposal for a universal intergovernmental organisation, within the U.N., which would have as its mandate reform and maintenance of the international tax system.

While this proposal would not have immediately remedied any of the myriad ways that corporations dodge taxes in developing countries, it would be a decisive change to the system that has allowed such activities to flourish.

To the extent that there are international rules, or standards and guidelines, on taxation now, they are proposed and elaborated by the Organization for Economic Cooperation & Development (OECD), a club of 34 of the world’s richest countries. Every once in a while they make a show of consulting those other 134 countries, but those others never actually get a vote.Ultimately it’s the pressure of the people which will force their governments to be responsible. The movement to stand up to those who have hijacked our power is building.

In the new proposed way of making decisions on international tax rules, every country would have an equal voice and equal vote. This fight matters is because developing countries are confronting the need to change how the rules are made, and who makes the rules.

Until they manage that, they will always, at best, be running to stay in place. Changing who makes the rules is a necessary, although not sufficient condition, for creating permanent change.

Taxation is vital because wealthy companies and individuals get and stay rich by using a portion of their considerable resources to hire lawyers and accountants to guide them in dodging the taxes they should be paying in the countries where they excavate, grow, or purchase their raw materials, assemble their products, and make an increasing proportion of their sales.

If they don’t have such staff in-house, they can hire the services of big accounting firms for whom this is the most lucrative activity.

Most big companies manipulate “tax treaties” between countries and tax havens like Switzerland, Mauritius, and the Cayman Islands to create legal fictions that exempt them from paying most of the taxes they owe.

What they do is usually not technically illegal, because of the impossibility of keeping up with the tactics of the armies of experts dedicated to avoiding taxes. But neither is it quite ethical.

This deprives countries of the revenue – to the tune of at least 100 billion dollars every year – that they need to fund development, and ensures the perpetuation of the concentration of wealth in the hands of a very few. That wealth translates to power – a veritable global plutocracy.

The OECD, to be fair, has made some moves to clamp down on the most egregious forms of tax avoidance, including their “base erosion and profit shifting” (BEPS) process begun in 2013.

The corporate lawyers and accountants were a little nervous about BEPS, but with the process winding up, it appears that any reforms it demands will not be manageable. The promises at the outset of the process to include developing countries never amounted to much.

The FfD process in the U.N. was, of course, universal. The U.N. and national governments usually like to have the “outcome document” finalised before a summit meeting. The prospect of a messy negotiation with thousands of advocates just outside the door makes them nervous.

But after months of negotiations in New York and a series of missed deadlines, the big debate over the tax body was not resolved. The ministers would go to Addis facing open negotiations.

Bolstered by the support of hundreds of civil society groups, the G77 governments – a group that has to accommodate the interests of very disparate countries – held together. Three BRICS countries – South Africa as the chair of the G77, along with India and Brazil – were vocal actors on the side of the developing countries, something they can’t always be relied on to do as they ascend the global power ladder.

With negotiators starting to meet before the formal start of the meetings on July 13, there were several days filled with ever-shifting rumours. But on the evening of July 15, the eve of the scheduled end of the conference, the announcement came: there would be an outcome document little changed from the unsatisfactory draft they brought from New York.

Promises were made to expand the resources and prestige of the existing U.N. Committee of Tax Experts, but nothing more. No universal membership, and no mandate for reform.

The G77 held out to the end. But the rich countries, led by the United States with the steady support of the European Union, Canada, Japan, and Australia, refused to give up the regime of loopholes and havens and double-dealing that adds up to billions in lost revenue every year.

Make no mistake, ordinary people in rich countries also lose out as corporations dodge taxes. But with their territories serving as the leading facilitators of tax avoidance in the world, their governments showed they want the present system to endure.

The current global hyper-capitalism now puts no constraints on capital. Unlimited profits, unlimited wealth, and unlimited power have been accruing to the finance industry and the wealthy corporations and individuals it serves for over 40 years.

The rich countries’ politicians not only put up with it, they tout the “private sector” as the panacea for development in poor countries, with nearly no evidence to support them.

And at home, they cut public services and impose austerity, explaining that government just can’t afford to serve the people. Their priority has been corporations’ and investors’ bottomless appetite for profit and power.

As my colleague Ben Phillips has written about the FfD, it’s actually good news that the rich countries had to put an ugly stop to the negotiations, with barely a face-saving compromise to point to. Usually they manage to find a way to assign the blame to someone else.

Forcing them to show their hand is valuable; it’s clear that those making the rules are far more identified with a powerful few than with the public they claim to serve.

The next step is at the SDG Summit at the end of September, at the time of the annual U.N. General Assembly meetings. There we will learn whether and to what extent the developing countries will stand up to those who have monopolised power for so long. If they do, we may be on the road to reversing parts of the system that perpetuates the status quo.

Whatever happens, we aren’t going anywhere. Civil Society won’t change this global dynamic by attending these conferences, or through polite lobbying. We will have to endure many more meetings, and more setbacks.

But ultimately it’s the pressure of the people which will force their governments to be responsible. The movement to stand up to those who have hijacked our power is building.

Edited by Kitty Stapp

Excerpt:

The land by Boegbor, a town in district four in Grand Bassa County, Liberia, has been leased by the government to Equatorial Palm Oil for 50 years. Credit: Wade C.L. Williams/IPS

By Soren Ambrose
NAIROBI, Apr 23 2015 (IPS)

Parents in despair because they can’t pay the fees at the privatised neighbourhood school…

Families left without healthcare because the mining company that pollutes their river also dodges the taxes that could pay for their treatment…

Women getting four hours of sleep a night as they try to balance caring for their families and homes with earning income…

Soren Ambrose

Whole communities thrown off their land to make way for a foreign company…

Workers paid so little by employers that they’re suffering malnutrition.

These are just a few of the reports I’ve heard from my colleagues in recent months.

We see people frustrated by the surge in the power of the plutocrats.

Plutocracy is a society or a system ruled and dominated by a small minority of the wealthiest. The rich have always been powerful; some element of plutocracy has been present in all societies.

But the degree of control being exercised now; the number of the ultra-rich essentially buying political power; the nearly impossible persistence required to overcome the legal, public relations, and technical resources controlled by corporations and the richest individuals; the much denser concentration of wealth in even the largest countries; and the global nature of the resources, power, and connections being accumulated have combined to foreclose meaningful democratic options and space for a life independent of the materialistic values of the plutocracy.The economy no longer facilitates human society; humans live to serve the economy.

The logic that undergirds all of this – the greed for money, power, and control – is antithetical to preserving an environment in which living things can thrive. Through most of human history we have endured various unbalanced political and social systems.

Today’s market economy has roots going back centuries, but only in this one has it become so monolithic, with virtually the entire world under its spell.

We are living in an age of hyper-capitalism: we have gone beyond industrialisation and value-addition to a point where the rules are written by the financiers, and the finance industry, rather than a sector that actually makes something, has become arguably the most politically powerful industry in history.

A brief period of relative equality in the richer countries after World War II gave way from the late 1970s to a powerful ideology of competition, unending growth, and unhindered profit. This ideology was charted deliberately by institutes lavishly funded by aspiring plutocrats.

The denial of limits, the privileging of competition and profit over cooperation and public goods, and the capitulation of governments to the power of money has made the modern plutocracy a dominant reality, and one that must be reversed.

Commentators now routinely speak of how people can “contribute to the economy.” The economy no longer facilitates human society; humans live to serve the economy. “Freedom” has been reconfigured to refer to consumer choice rather than the ability to determine how to order one’s life.

A few years ago there was considerable debate about the concept of “peak oil” – the possibility we were reaching the beginning of the end of usable petroleum supplies. We may be reaching a more dangerous point: peak plutocracy, where society and the environment can sustain no more concentration of power and resources.

So it is worrying to hear so consistently from colleagues around the world the extent to which the power of people is being curtailed by the people with power.

We see the evidence of peak plutocracy in:

• the so far largely successful efforts of business interests to prevent meaningful action on climate change;

• the push for high-input, high-tech, restricted-ownership agriculture that excludes smallholder farmers – a great portion of them women — who feed most of the world’s people;

• the collusion of governments and companies in taking control of land and natural resources from communities in order to generate profits for privileged outsiders;

• the “race to the bottom” among governments to sacrifice revenues through blanket “tax holidays” in order to lure foreign investment, even when the benefits are unclear or negligible;

• the failure of governments to establish laws that protect workers from abuses ranging from trafficking to unlivable wages to unacceptably risky working conditions, with women workers in the most precarious, low-paid and inhumane jobs;

• the failure to recognise the systematic abuse of women’s rights in many areas – but in particular the deep uncompensated subsidies women provide to all economies with their unpaid and low-paid care work that keep families and societies functioning;

• the pressure put on countries – and more recently the collusion between governments and companies – to change commercial and consumer-protection laws so that foreign companies can dominate markets;

• the use of coercion, including violence, by powerful elites in private enterprises, fundamentalist movements, and repressive regimes to control women’s bodies and sexual and reproductive choices, their labour, mobility and political voice;

• the pressure to privatize schools at the expense of decent public education, despite the complete absence of evidence that the results will be beneficial to anyone beside the owners;

• the unwarranted scorn directed at the public sector, and the pervasive recourse to the notion of “private sector led development” by most donor countries and inter-governmental institutions, even in the absence of positive models

• the fetishization of foreign direct investment in low-income countries despite compelling evidence that no country has achieved sustainable development with foreign capital;

• the increasing congruence of interests among governments, corporations, and elites in limiting the freedom of action of social movements and public interest groups, constricting political space in all parts of the world;

• the increasing domination of wealthy corporations and individuals in United Nations debates and processes.

• the brazen ideological defense of inequality and massive concentration of power and resources by wealthy individuals and the institutes they fund;

• the increasing number of disasters and emergencies are turned into profit opportunities, as affected areas are remade according to the plutocrats’ rules.

• the refusal of governments to combat the global youth unemployment crisis with public jobs programs to address the widely-acknowledged looming crisis of deteriorating infrastructure;

• the fallacy of scarcity revealed by the capacity of governments to find massive public financial resources for war and bank bailouts, but seldom for programs that would employ people, combat hunger and disease, and foster renewable energy.

The hyper-concentration of wealth in the hands of the few has corrupted democratic systems, in rich countries as well as in poor ones.

We need to democratise power. But that doesn’t mean just better monitoring of elections. It means making power more horizontal, more accessible to more people, the people who are affected by the decisions made.

There is no one-off recipe for making this happen. It has to happen over and over again, every day, everywhere, with increasing connections so that we won’t be crowded out by those with money and influence. We have to occupy space and not leave it, and then occupy some more.

Edited by Kitty Stapp

Excerpt: