International Economics: IB Economics

And here's the accompanying letter from the Finance Ministers concerned...

The Chief Economist of the World Bank has gone public in stating that the G20's scheme for providing debt relief to developing economies has singularly failed to provide any meaningful funds since 2020.

It appears that the failure to include China and private bondholders in negotiations means that it is difficult to reach agreement on providing debt relief. That said, it seems slightly odd that his equivalent figure at the IMF has a contradictory position arguing that it's helped Ghana and Zambia out of debt crises. 

Political leaders at G20 are meeting in Brazil and one topic of conversation is the notion of a global minimum tax rate for the super-rich. Whilst this will play well with Guardian readers, my gut instinct is "Good luck with that".

The super-rich are hypermobile, and will always find ways of tax avoidance, and besides, it's also the case that there's an incentive for economies to want to welcome them, so the prospect of agreement on a global minimum tax rate looks a distant one. 

The latest OECD economic forecast suggests a slowing of global growth, although only Germany and Argentina are likely to see their economies decline in size this year. However, from the UK's perspective, the fact that our average inflation - predicted to be 7.2% - will be the third highest in the G20 must be a cause for concern.

Ratings agency Moody's is of the view that a number of G20 economies, notably the US and the UK, are on the point of falling into recession as central banks raise interest rates in response to stubborn inflation. 

Interesting times ahead. 

Another call for a tax on global financial transactions, a so-called Tobin tax from a number of economists on the eve of the latest G20 meeting.  

The IMF believes that support for a global mass vaccination programme will generate significantly more benefits than costs - even with a $50bn price tag. This is very much in line with the thinking of Alex Tabarrok whose work with the US government has emphasised this. 

Indeed, whilst there are substantial private benefits from mass vaccination, the public benefits - and the positive externalities associated with them - are such that such a scheme could accelerate both growth and development. 

After a week when Zambia has defaulted on a portion of its debt, it seems that the G20 nations have been prodded into action, calling for private lenders to suspend debt repayments in the current environment. 

Zambia is not alone - as in the developed world, coronavirus has imposed significant costs on the developing world, and other nations will be feeling the pinch. Some form of debt relief seems inevitable. Do we really want countries spending more on debt interest payments than they do on both health and education. 

Over 200 former world leaders, academics and the like have written an open letter calling for concerted global action - led by G20 nations - to tackle the coronavirus pandemic.

The letter argues that, in the absence of a G20 meeting since the outbreak, the lack of concerted action represents a death sentence for many of the world's most vulnerable, with as many as 420 million people being pushed into extreme poverty. 

They probably have a point. 

Phillip Inman emphasising the need for G20 support for sub-Saharan Africa. He's right too.

Larry Elliott suggests that the World Trade Organisation is on its last legs: he suggests that multilateral trade agreements are dead, and that increasingly it's bilateral deals that dictate the nature of global trade. 

It's a reflection on the history of the organisation and whether it remains relevant today.

"More, more, more...how do you like it, how do you like it", President Xi, might be President Trump's opening gambit at this week's G20 summit in Buenos Aires.

The President is threatening more tariffs on Chinese goods, if the Chinese fail to (a) abandon their 'unfair' trade practices (b) submit to his bullying (c) all of the above.

But are these tariffs self-defeating? The President might ask GM

It is also rumoured that, for a change, the police in the host city are looking forward to the G20 meeting. For them it represents a quiet weekend, given that River Plate and Boca Juniors aren't playing in  the Copa Libertadores.

The latest meeting of G20 ministers has called for a 2% global wealth tax for the world's 3,000 billionaires, arguing that it could create a fund to reduce poverty, fight climate change and promote sustainable development. 

It seems as though the call for a fairer tax system is an annual event. It's easy to do, far harder to implement, not least when, you suspect, the political will just isn't there. 

Larry Elliott argues that the G20 are showing signs of committing to tackling extreme poverty in the years ahead, arguing that poverty reduction is going to require both public and private sector investment, with the former crowding in the latter. 

However, without a concerted effort to improve infrastructure and improve public finances in developing economies and go some way to getting closer to achieving the Sustainable Development Goals (SDGs) by 2030. At present, we're going to fall well short in relation to both extreme poverty and zero hunger. 

Michael Jacobs calls for a reshaping of the global economic order to take greater account of developing economies. He identifies five challenges that they face - no spoilers this time - and how the G20 might be the vehicle that allows for their interests to be given greater emphasis in the years ahead. 

Ahead of this week's G20 meeting in Delhi, a number of campaigners have argued in favour of global co-operation to increase taxes on wealth. Depending upon your political views, it's either the politics of envy, or, a reasonable suggestion.

For what it's worth, the argument opposing such taxes is often that given that income is taxed, to tax wealth is effectively a 'double tax' - I'd suggest that for the super-rich, incomes aren't taxed effectively and this provides more of a justification for wealth taxes.

The G20 meeting in Rome has endorsed the deal to agree a global minimum corporation tax rate of 15%. Whilst ostensibly encouraging, it will be fascinating to see how this plays out. 

What is going to happen to global tax revenues, and how are they going to be distributed after this move? And what will it do to levels of investment across the globe?

Whilst the headline is eyecatching, the devil, as always is in the detail. 130 countries have signed up to the minimum global corporate tax rate but with a number of notable exceptions, such as Ireland, Hungary and Estonia.

Is the agreement going to completely end tax avoidance? I doubt it...

It seems that the G20 may well take concerted action on corporate taxation, and crackdown on tax avoidance, although game theory would suggest that there's also an incentive for someone in the G20 to cheat, and not impose a minimum level of corporate taxation. 

Gordon Brown writes in the Guardian about the lack of global leadership offered by the G20 during the coronavirus outbreak. 

Thankfully, it seems that common sense has prevailed, with the G20 nations suspending debt repayments by the world's poorest nations until the end of 2020. 

That said, the Jubilee Debt Campaign - or Bono as he's more commonly known - would like the debt relief to go further. There are arguments that it should be extended beyond 2020, and not be reintroduced, complete with outstanding interest payments in 2022-24 and that it should include private sector lenders as well.

Larry Elliott wasn't in optimistic form in the Observer this weekend: he argues that the G20 need to be aware of the risks associated with rising levels of global debt. 

A 'fluffy' magazine-style piece on this weekends G20 meeting in Buenos Aires and what it means for the ongoing US-China trade war.