Mel Young: The G7 is meeting in the UK from tomorrow, and it is grabbing a lot of attention. The issue of taxation of global tech companies has already been aired. But I wonder why it is the remit of the G7 to make decisions about global taxation? I hadn’t really clocked which countries made up G7; it comprises the USA, Canada, Japan, Germany, Italy, France and the UK, which seems an arbitrary group. Surely an issue like global taxation should be under the remit of an agency like the UN which can look at the issue from a global perspective. After all, this is an issue that affects all countries and not just seven rich countries.
Alex Matthews: It feels quite arrogant to me. If I was one of the ‘other’ countries of the world – particularly China, the second largest economy but equally any country at all – I would wonder why I am expected to adopt rules created by what you rightly refer to as an arbitrary group. Furthermore, these countries, with the exception of Japan, are all Western and largely white, and it feels old-fashioned and perhaps even a bit colonial to have these powerful countries forcing others to adopt the rules they create. As you say, it should be the UN that creates and implements policies and recommendations around global taxation, because all countries, rich and poor, large and small have a vote.
MY: Don’t get me wrong, I am not against these big companies being held to account so that they pay their fair share of tax like anyone else. Lots of people have been arguing about this for a long time; maybe it’s good that the G7 has made a start, but once again it seems inequitable. As I understand it, the big winner in terms of the revenue derived would be the USA – it would be good if they could use some of that money to tackle the inequality in that country and indeed across the world. We still have this huge wealth gap between rich and poor countries and this is an opportunity to do something about it. It is being missed. It is the same issue with vaccines, where again the richer countries are able to inoculate their populations but poor countries are way behind. The G7 will make grand announcements but to eradicate Covid-19, we need the world to be working as one. It requires a global approach, not one which is driven by seven self-appointed countries who happen to be comparatively very rich.
AM: Yes, there seems to be a disconnect among the G7 – they keep talking about the importance of tackling the pandemic at a global scale, but they have made sure that they vaccinate their own populations before allowing any of the vaccine to go to developing countries. If there had been a drive to distribute the vaccine more evenly, then perhaps India’s infection rate would have remained under control. If it had remained under control then perhaps – although of course we can’t know this for sure – the new ‘delta’ variant would not have emerged – a variant that is threatening to engulf the UK and other countries in a third wave, despite vaccine roll-out successes.
I think we should be asking why countries like India and China aren’t part of this group of rich countries. They are both wealthy countries, although admittedly their GDP per capita is lower. Have they been excluded because culturally they are so different to the more Westernised countries of the G7?
MY: Of course, there is the G20 which includes them, but the answer to your question is the one we are searching for as part of The New Ism. How does the governance of the modern world work? If the UN and WHO are old fashioned in the way they work, then what are the new global institutions which can make sure that issues like global taxation are handled in a fair way? Many more companies are becoming global – who is policing them? It doesn’t seem fair that seven rich countries are getting a share of revenue, even if that is quite legitimate, at the expense of everyone else. They have simply made a grab for the cash and expect everyone to applaud – the same goes with the global vaccine roll-out. To me, we need to look at this in a completely new way.
AM: Yes you’re right, we do need a new way – but a way that is totally different to the UN or the WHO. The G7 (and the G20, to an extent) are successful because they are more agile and can meet more easily – there is less red tape. What we need to figure out is how we can create an agile, flexible and responsive body that represents the needs of the entire world, rather than just the wealthiest countries – even if they claim that they are acting in the interests of everyone. Do we have a ‘club’ with representatives representing the richest and poorest from each continent? Africa is woefully under-represented at the global level, despite the fact that it has such a huge, and youthful, population. It’s a difficult challenge to find a solution for, but it’s really important as these international groups have so much influence.
MY: Maybe. I am not sure about having continental representatives. Africa is very under-represented but it is a huge continent with a lot of diversity and different opinions. I wonder if something should be created which goes above national borders and continents. If we agree on some underlying values – like a fair and equitable work for example – then we create a type of global court of human rights except it is based on economics and includes representatives from the business or charity sectors and call it something like the ‘Court of Global Fairness’ which looks at these issues from a global perspective. I don’t have a concrete proposal but we need to keep thinking in this way and try to come up with something which makes practical sense.
AM: Yes, as ever, this is something that needs to be discussed, and which we will raise with the thought-leaders and young people we talk to on the podcast in the coming months! I think we agree that the current system – small groups of influential countries – is flawed and needs to change if we are to meet the needs of all people. Make sure you tune in and provide your contributions!