Of secret hoards in tax havens

Updated - November 16, 2021 05:54 pm IST

Published - November 21, 2014 02:07 am IST

The gathering of the Group of 20 countries in Brisbane over the past weekend was not without its share of lofty goal-setting on the big questions of the day that usually marks such summits. There are indications, however, of a realistic chance that the world leaders would be able to match their commitments with actions sooner than later. This optimism stems from the increasing synergy between Washington and Beijing, demonstrated in the climate change deal they announced days before the Brisbane summit. A case in point is the set of principles that the G20 leaders agreed that would enable governments to identify anonymous owners of shell companies and trusts and facilitate cross-border exchange of information. Billions of dollars of illicit finances, mostly from developing countries, are said to be parked in such entities; sums that could be utilised to lift millions out of poverty. Although these transparency principles have been in the making from the G20 summit last year, a final consensus emerged once China’s concerns were addressed to its satisfaction. While allowing public access to information on beneficial ownership is still not part of the agenda, a readiness to track such data is a modest beginning. The G20 leaders gave their assent to the proposal put forth by the Organisation for Economic Co-operation and Development to limit the use of tax havens, as cleared by OECD Finance Ministers earlier.

By contrast, the target of a 2 per cent increase in overall output growth for the bloc within the next four years with a promise to further liberalise trade, is perhaps more of an expression of pious intent. The risk of another global recession, even if not of a magnitude similar to the earlier one, is a refrain that is not infrequently heard these days. Underlying the United States Treasury Secretary’s comment of ‘Europe’s lost decade’ are probably differences over strategy. But the European countries and the U.S. seem to have found common cause — to prevail upon major carbon-emitting countries to come up with credible commitments to lower their CO emissions ahead of the global summit in Paris late next year. For his part, President Barack Obama pledged $3 billion to the United Nations-backed Green Climate Fund to help poor countries cope with the challenges of global warming. Large carbon emissions represent also a feature common to the U.S. and Australia, Mr. Obama reportedly said, reflecting the mood in the White House. The U.S. pledge was followed by one from Japan. Leaders who would have preferred to persist with a business-as-usual approach to the matter may have found themselves isolated. Trite statements of politicians do not often inspire confidence in their will to take matching actions. The G20 leaders may be rewriting that old script.

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