From Foreign Affairs, September 14, 2016
Has the Group Outlived Its Purpose?
By REBECCA LIAO who is the Director of Business Development at Globality, Inc. She is also a writer and China analyst.
Over Labor Day weekend, the leaders of the G-20 countries gathered in Hangzhou, China, for their annual summit. Their goal this year: save the good name of globalization, which has recently taken a beating. In the wake of Brexit, the U.S. Republican presidential candidacy of Donald Trump, the rise of the European far right, and China’s own anti-Westernism, the G-20 leaders were supposed to renew their commitment to collective economic growth and open cross-border trade and investment. —————————-
—————–One area in which international cooperation is crucial, however, is in tax regulations that prevent tax evasion. High-net-worth individuals and corporations are able to move their income to jurisdictions with lower taxes, most of the time through legal means. This ability to hide income stymies tax-and-transfer programs, not to mention that it has meant a significant hit to government revenues in advanced and developing countries alike. In response, the G-20 and OECD have partnered to devise and implement a framework on tax reform that individual countries may implement at a customized pace. The success of this initiative remains to be seen since it internationalizes a tool that is at the heart of a country’s economic sovereignty.