5 Minute Read by (Reuters) – VENICE, Italy (Reuters) – The development of novel coronavirus strains and limited vaccine access in impoverished countries are jeopardizing the global economic recovery, finance ministers from the world’s 20 major nations said on Saturday. PHOTO FROM THE FILE: On June 28, 2021, gravediggers wearing personal protective equipment (PPE) burry a coffin of a coronavirus disease (COVID-19) victim at a government-provided burial ground in Jakarta, Indonesia. Willy Kurniawan/Willy Kurniawan/Willy Kurniawan/Willy Kurn The G20 meeting in Venice, Italy – the ministers’ first face-to-face talks since the outbreak – also supported a proposal to prevent multinational corporations from moving profits to low-tax havens. This clears the way for G20 leaders to agree on a new global minimum corporation tax rate of 15% at their October summit in Rome, a move that might help public treasuries recover hundreds of billions of euros squandered by the COVID-19 debacle. The global economic outlook has brightened since the G20 talks in April, thanks to the launch of vaccines and economic support packages, but it remained fragile in the face of varieties like the fast-spreading Delta, according to a final communique. “The recovery is marked by significant differences across and within countries, and it remains vulnerable to negative risks, including the spread of novel COVID-19 virus strains and differing vaccination rates,” the report stated. “We reiterate our commitment to employ all available policy measures for as long as necessary to address the negative repercussions of COVID-19,” it continued, adding that they should be consistent with maintaining price and fiscal stability. While the communique emphasized support for “equitable global sharing” of vaccines, it did not propose specific measures, instead acknowledging the International Monetary Fund, World Bank, World Health Organization, and World Trade Organization’s recommendation for $50 billion in new vaccine financing. “Everywhere throughout the world, we all have to enhance our vaccination performance,” French Finance Minister Bruno Le Marie told reporters. “We have extremely optimistic economic expectations for the G20 economies, and the possibility of a fresh wave is the only roadblock to a swift, solid economic recovery.” The world’s rich and poor continue to have vastly different vaccination rates. The disparity, according to WHO Director-General Tedros Adhanom Ghebreyesus, is a “moral outrage” that jeopardizes wider efforts to control the virus’ spread. While some of the world’s wealthiest countries have given almost two-thirds of their citizens at least one vaccine, many African countries have a vaccination rate of less than 5%. Brandon Locke of the public health non-profit The ONE Campaign condemned the G20’s inactivity, describing it as “a lose-lose situation for everyone.” “Not only will it cost lives in poorer nations, but it will also increase the possibility of new varieties wreaking havoc in wealthier countries,” he warned. According to a Reuters count, new COVID-19 infections are increasing in 69 countries, with the daily rate increasing since late June and now standing at 478,000. here Concerns are growing that the development of the Delta form would stymie economic recovery, particularly in nations where vaccination rates are low. Kristalina Georgieva, the IMF’s Managing Director, said the globe was experiencing “a worsening two-track recovery,” owing in part to disparities in vaccine availability. The most significant policy achievement of the talks was a well-publicized agreement on the worldwide corporate tax rate, which brought an end to eight years of bickering on the subject. The goal of establishing a global floor of 15% is to prevent multinational corporations from shopping around for the lowest tax rate. It would also change how firms like Amazon and Google are taxed, based in part on where they sell goods and services rather than where their headquarters are located. Any countries hostile to it, according to US Treasury Secretary Janet Yellen, would be encouraged to join up by October. “We’ll attempt to accomplish that,” she said, adding that “it’s not necessary for every country to be on board.” The agreement also contained provisions to prevent the use of tax havens anywhere. G20 members, which include major players such as the United States, Japan, the United Kingdom, France, Germany, and India, account for more than 80% of global GDP, 75% of global commerce, and 60% of the world’s population. Kenya, Nigeria, Sri Lanka, Barbados, and St. Vincent & Grenadines are among the countries that have not signed on, in addition to European Union holdouts Ireland, Estonia, and Hungary. A debate in the US Congress over President Joe Biden’s proposed tax increases on corporations and rich Americans, as well as a separate EU plan for a digital charge on IT giants, could cause complications. Even though the digital levy is primarily directed at European companies, US Treasury officials argue the EU plan is incompatible with the larger global agreement. Additional information is available. Gavin Jones, Christian Kraemer, Francesco Guarascio, and David Lawder contributed to this work. Mark John wrote the piece, while Gareth Jones and Pravin Char edited it./n
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