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…As Action Group on Mangroves meets in Sri Lanka
Commonwealth finance ministers have recognised the potential of technology to improve debt transparency while urging closer
collaboration to resolve tax challenges arising from growing digital commerce.
Revenues from tax collection are important for maintaining debt at sustainable levels, yet can often be impaired by the digitalisation of trade in services, as this often results in countries being unable to
determine when, how and where taxes on digital transactions should be
collected.
Ministers have therefore agreed that the Commonwealth should bring its
powerful collective voice to ongoing discussions at the Organisation for
Economic Co-operation and Development (OECD), particularly on behalf of smaller states. International agreement on digital taxation could enable countries to benefit by taxing large tech giants, even if they do not
operate within their jurisdictions.
These decisions were made by ministers gathered in Washington DC for the
2019 Commonwealth Finance Ministers Meeting under the theme
‘preventing debt crises: the role of creditors and debtors’.
Commonwealth Secretary-General Patricia Scotland said: “The
Commonwealth has a distinctive contribution to make by bringing together
nations with developed and developing economies to agree on collective
approaches and action towards a fair and equitable global system for
taxing multinational businesses in a swiftly digitalising economy
“We need a rule-based system that is inclusive, transparent and
efficient so that all countries have a means of collecting revenue and
are thereby able to avoid accumulating excessive debt. It goes hand in
hand with accelerating the gains to be made by addressing climate change
and making progress towards achieving the sustainable development
goals.”
Ministers saw global trade and geopolitical tensions as having
‘intensified’, in a context where global debt has risen to an
all-time high, estimated at $19 trillion. They stressed the need to make
debt easier to manage for vulnerable countries, and for them to be
eligible for periods of relief to stabilise growth during economic
shocks.
As seen in the past, disasters can push countries into taking on
emergency loans to rebuild and recover. Such debt can easily become
unsustainable for most low and middle-income countries, making them
vulnerable to debt distress.
The Minister of Finance of Cyprus, Harris Georgiades, who chaired the
meeting, said: “Disruptive technologies are challenging the financial
system by increasing competition and reshaping conventional business
models, thereby fuelling the creation of a whole new kind of financial
ecosystem.”
During the meeting, ministers also reviewed a suite of Commonwealth
initiatives, including a disaster risk portal to offer streamlined and
integrated information on available funds to respond to disasters, and a
fin-tech toolkit to help banks leverage innovation in the financial
sector.
The Commonwealth gave a presentation on its flagship debt management system ‘Commonwealth Meridian’ which is used by 63 countries to manage
their debt which combines to a total of $2.5 trillion.
Considerable progress is expected to have been made on the various
action and initiatives discussed by the time of the next Commonwealth
Finance Ministers Meeting, which will be chaired by Botswana in
Washington DC in 2020.
Meanwhile, Commonwealth countries have met in Negombo, Sri Lanka to decide on a work
plan to help save the world’s mangroves.
The plan includes joint actions, projects and funding strategies for the
short and medium term.
The activity is part of the work carried out under the Commonwealth Blue
Charter – an agreement by all 53 Commonwealth countries to actively
co-operate to solve ocean-related challenges and meet global commitments
on sustainable ocean development.
The Blue Charter works through voluntary action groups led by
‘champion countries’, who rally around issues such as marine
pollution and the sustainable blue economy.
Home to over 19,000 hectares of mangroves, Sri Lanka champions the
Mangrove Ecosystems and Livelihoods Action Group (MELAG). To date, nine
other Commonwealth countries have joined MELAG, including Australia,
Bangladesh, Vanuatu, Bahamas, Nigeria, Jamaica, Kenya, United Kingdom,
and Trinidad and Tobago.
Sri Lanka’s Director General of Ocean Affairs, Environment and Climate
Change Hasanthi Urugodawatte Dissanayake said: “Given that Sri Lanka
is ranked number 2 on the Global Climate Risk index in 2019, it is
natural that Sri Lanka has stepped forward as champion of the MELAG.
“The first meeting of the MELAG has allowed Commonwealth members to
share experiences and expertise to compliment global efforts in the
protection and restoration of mangroves.”
The workshop highlights the importance of mangroves – which generate
far-reaching environmental and economic benefits – as a global ocean
issue.
Aside from being a habitat and nursery grounds for various plants and
animals, mangrove ecosystems can absorb three to four times more carbon
than tropical upland forests, helping to mitigate the effects of climate
change. Mangroves prevent coastal erosion, protect shorelines, while
also providing livelihoods for coastal communities, through fisheries
and ecotourism.
However, more than half of global mangrove cover has been lost over the
last 50 years, partly due to extreme pressure from human activities.
Commonwealth Adviser Heidi Prislan, who co-organised the event, said:
“Several Commonwealth member states have very large areas of mangrove.
This means that action taken to protect and restore mangroves in the
Commonwealth will have a significant global impact.”
Activities being planned for the group include developing a database of
mangrove ecosystems in the Commonwealth, sharing technical know-how and
best practices on mangrove restoration, and strengthening community
partnerships and legal frameworks.
