With government interventions now receding, this session will focus on fiscal measures to promote sustainable growth during the longer-term recovery phase. The Economic and Social Council (ECOSOC) endorsed the Fundamental Principles of Official Statistics in 2013 and in January 2014, they were adopted by Governments and IFIs provided critical lifelines to households and businesses during the recession, as COVID-19 caused widespread unemployment, rising poverty, and global economic disruption. The United Nations Statistical Commission adopted these principles in 1994 at the global level. Principles of Official Statistics (UNSC, 2014) and to govern.In 1992, the United Nations Economic Commission for Europe (UNECE) adopted the fundamental principles of official statistics in the UNECE region. Notes from the Civil Society Policy Forum session on 29 September on fiscal measures to promote sustainable growth during the longer-term recovery phase.National statistical systems are expected to be guided by the United Nations Fundamental. FAO Statistics Quality Assurance Framework (SQAF), adopted in 2014, and the Corporate Statistical Standards adopted more recently, set out the principles and recommended best practices to ensure that FAO statistical production processes and statistical outputs are of the highest possible quality.The SQAF is based on the Fundamental Principles of Official Statistics and the Principles Governing.
Panelist 2: Dr Manal Abdel Samad, Advisor to the Minister of Finance, Lebanese Republic Panelist 1: Gabriel Sterne Head of Global Strategy Services and Emerging Markets Macro Research Oxford Economics Moderator: Daniel A Witt International Tax and Investment Center (ITIC) President FPOS (Fundamental Principles of Official Statistics2) within the statistical systems of UN.
Fiscal spending in Covid has increased debt. My view is that Covid has not de-railed long-term fiscal sustainability. Fiscal issues is perhaps the major issue in terms of long-term Covid impacts.
I still have some fears of a stagflation. It is societies tolerance of fiscal pain that defines what level of adjustment is sustainable. Previously, IMF would consider this a level that required a restructuring, but times have changed.
Markets have been providing easy money of late – I think markets will actually tolerate debt levels higher event than the 2021 levels. Average maturities in EMs are also quite long at present. Global excess savings could persist for 30 years and, moreover, funding capacity of EM domestic financial systems has rocketed. Emerging market (EM) funding conditions will likely remain favourable. If there is a stagflation, there could be serious needs for fiscal consolidation from Brazil, South Africa, Turkey, and even China.
We have potentially serious shortfalls, and Covid has derailed implementation. What has covid done to the fiscal agenda? If developing economies are to meet their SDGs by 2030 they will need $3 trillion. Among larger economies, Spain, Italy, South Africa, Belgium and Brazil face more severe predicaments. El Salvador and Sri Lanka face the most severe of all fiscal predicaments. We have developed a scorecard of “fiscal predicament”.
Middle East countries are suffering a severe crisis. The Middle East sees people complying more with their tax obligations. Why do citizens pay their taxes? I think it is based principally on how governments are perceived to spend them (responsibly/effectively or not). EM seem to want greater provision of public services through more progressive taxes. New taxes may be necessary. A problem is that tax revenues (as a percentage of GDP) are still very low for developing countries and have remained steady over the last thirty years.
Covid-19 has helped us to realise that tax collection can be done digitally, helping to cut corruption and improve efficiency. Sudan, Yemen, and Lebanon are suffering from unsustainable debt levels. 5% of all women’s jobs lost, compared to 3.9% for men. In 2020 women lost more than 64 million jobs. Women, globally, have been effected globally.
This suggests debt accumulation, given country measures to respond to the global financial crisis and the pandemic. Since the 2008 crisis, revenue levels have not increased above the levels that it was prior to 2008. After 2019, tax revenues dipped globally, apart from Europe. The impact of C19 on revenues has been asymmetric globally. We need austerity, but low government trust can be an obstacle.
These reflect the means available to countries – countries that can expect to raise more money through debt or taxes have responded more forcefully to the crisis than those that cannot. In LICs, the average are about 1.5% of GDP. In EMs, spending was about a third of this. AEs on average spent 20% of GDP on response to the pandemic. Again, asymmetric consequences across income levels. What was the response to the crisis? Governments did pay attention to revenue losses and spent quite a lot.
Is this ratio similar to what IMF sees? Should we not crate wealth taxes / capital gains taxes to ensure that we can continue the vital social protection programmes? Road tolls) – need to be remembered.Question from Matti Kohonen: A question to the speakers, we measured as civil society that in the developing world 63% of recovery revenues went to the large business sectors, while only 22% went to social protection. The guiding principles – reducing inequities, thinking of environment (e.g.
What you really care about is the efficiency of the spending – it was hard to be efficient with such short term decisions (think furlough system in the UK). Gabriel: Those are interesting statistics and I don’t really have an answer. For example, in the Middle East region it was estimated that 30% of cash transfers is lost to households who do not need it. It goes to the heart of the distributional consequences of transfers.
In addition to working on tax, we have to work on expenditures.John Gardner: are there particularly countries that are taking the steps now to recover well in the areas under discussion? Accountability is definitely an obstacle. We have to give a greater role to women by investigating in female education. Manal: It’s about building a whole system of good governance and accountability. The important point to me, though, is if the payments made have been effective.Zack Billick: How can we understand the tax implications in Middle East rentier states in terms of responsibilities to its citizens to protect them from the negative effects of COVID?
One of the solutions in my few is for the government to stop worrying about the tax level and start thinking more about the quality of tax. Going forward, these difficulties will remain over the next decade. The point is what countries decide to do with technology. I don’t believe that technology is a way to improve compliance – if it was, revenue would already be a lot higher in developing countries. In L/MICs there are still fundamental political economy and technical issues related to revenue mobilisation.
Gabriel: there is a decision to be made about the extent that governments need to preserve businesses that are struggling now but may have a positive future. With restricted markets, how can we ensure competitive business at present? Governance is clearly important and needs to be enhanced.Dr Rakesh: the SDGs are derailed. But I believe that technology is an important solution, especially when having better audit programmes.
Acceptance of taxation is directly related to perception of things like income equity. It goes to the importance of tax design. Mario: These are all very valid points. Mansour, what does the IMF think about the need for austerity?
Part of this is due to oil revenue. But the work I’ve seen suggests that the MENA region is the most unequal in income and wealth globally.
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