Experts from South Africa Among Those Calling for End to Era of Billionaire By Taxing Super Rich, Cancelling Debt

15 November 2024

In the run-up to the Group of 20 (G20) Leaders' Summit in Brazil, economists and activists from Brazil to South Africa are calling on world leaders to tackle the ever-widening gap between rich and poor. Amid the worsening global debt crisis and an imminent second Trump presidency, the experts outline essential reforms to the international financial architecture and discuss what the transition between the Brazil and South African presidencies of the G20 means for debt, tax and inequality.

Since 2020, the world's five richest men have doubled their fortunes, while 60% of humanity has become poorer. The world's richest 1.5% now own nearly half (47.5%) of the world's wealth. Meanwhile, enormous public debts are holding back countries across the Global South, diverting resources from essential services. Some 3.3 billion people now live in countries that spend more on interest payments than on either education or health.

In the statements below, the experts offer comments on key issues to be raised at the G20, including the possibility of a global deal to tax the super-rich, calls for debt cancellation, support the implementation of United Nations Framework Convention on International Tax Cooperation (UNFCITC) and the push for a fairer representation of Global South countries within the IMF and World Bank.

Jenny Ricks, General Secretary, of Fight Inequality Alliance (FIA), said:
"The ever-widening gap between rich and poor and the ever-growing burden of debt in the Global South are devastating the lives of billions, while a handful of super-rich continue to exploit the immoral and unjust system that was created to help them protect their wealth. There are 16 people in the world who – if 99% of their wealth vanished overnight – would still be billionaires. We must tax the rich, end austerity, and cancel the debt to ensure health care, education and other essential public services for billions in the Global South. A growing movement of millions across the world is tired of the G20 upholding a broken system. A first step forward would be supporting an ambitious global deal to tax the super-rich."

Nathalie Beghin, co-Director, Instituto de Estudos Socioeconômicos (INESC), Brazil, said:
"Countries are on track to lose $4.8 trillion in tax to tax havens over the next 10 years. Such unchecked tax evasion perpetuates inequality and undermines the foundation of sustainable economic development. At this historic moment, G20 leaders must demand the changes needed to transform an outdated, unfair system that's no longer fit for purpose – if it ever was.  G20 leaders should strongly support the United Nations Framework Convention on International Tax Cooperation (UNFCITC) as an inclusive and participatory mechanism to tackle illicit financial flows, rediscuss inefficient tax expenditures, tax transnationals and High Net Worth Individuals (HNWI) among other issues.

"If Brazil could tax its super-rich, as a consequence of a global commitment, the country could stop austerity measures and implement social, environmental and adaptation policies to  fight hunger, poverty and climate change. Making big companies and very wealthy individuals pay their fair share is also fundamental to tackle inequality."

Kamal Ramburuth, Researcher at the Institute of Economic Justice in South Africa, said:
"South Africa will soon take the baton from Brazil in using the platform of the G20. The G20 is a club of the most powerful countries that have historically used the platform to respond to crises. Our world's crises are compounding as climate change and wars offer a devastating demonstration of reactionary, self-interested self-destruction. The G20s cannot simply be a platform to respond to compounding crises; they must be proactive. The world's most powerful governments hold a responsibility to end poverty and reduce inequality. The South African government holds a historic responsibility - as the first African country to host the G20 - to champion solidarity, equality and take steps to achieve sustainable development in very practical ways."

Ndongo Samba Sylla, Africa Regional Director for Research and Policy at the International Development Economics Associates (IDEAs), said:
"The debt crisis in Africa and in many countries across the Global South is a product of a dysfunctional international monetary and financial system. On the one hand, African countries are deprived of good returns on their commodity exports because foreign corporations successfully evade and avoid paying the taxes owed to African governments, resulting in high levels of licit and illicit financial flows, i.e. tax income that could have reduced the need for African governments to issue debts in foreign currency. On the other hand, exorbitant interest rates increase the debt burden of African countries and when they face an adverse economic cycle, the IMF imposes harsh austerity measures on them. It's time for the G20 to push for major reforms that will help to address the fundamental inequality that is now baked into the global economic system. Only by focusing on public good as the main goal can we achieve development and climate goals."

Jayati Ghosh, Professor of Economics, the University of Massachusetts Amherst, and a founding member of the International Development Economics Associates (IDEAs), said:
"We are in the midst of a global debt crisis that's impacting around half the global population, and yet those who control the global financial architecture don't think the situation merits emergency action. To them, it doesn't matter that people are suffering, or that a country's growth prospects might be destroyed for a generation or more. What matters is that debt in the Global South doesn't threaten the international financial system. G20 leaders need to wake up, find their moral compass, and treat the global debt crisis with the urgency it deserves."