OECD – COOPER GENERAL NEWS

Covid-19 vaccinations without prior registration will be given at Sector 30 District Hospital in Noida, India on June 22, 2021.

Sunil Ghosh | Hindustan times | Getty Images

New outbreaks of Covid-19 remain one of the greatest risks to a global economic recovery, warned the Secretary-General of the OECD, calling on developed countries to support less developed countries with their vaccination programs.

“We have to do what we can to get as many people as possible around the world to vaccinate. There is a special responsibility for developed economies and it is not just about charity or charity, it is actually both a matter of self-interest “to keep our people safe … and to ensure that economic recovery is sustainable” said Mathias Cormann, Secretary General of the OECD, on Thursday.

“New outbreaks are still one of the biggest downside risks to the ongoing economic recovery,” he told CNBC’s Annette Weisbach.

“There is a race between vaccinating as many people as possible around the world, including and especially in developing countries, and the risk of new variants emerging and variants that may be resistant to the vaccines currently available,” he noted.

Read more: Covid-19 has destroyed 22 million jobs in advanced countries, according to the OECD

It is not only Cormann who fears that the continued spread of Covid-19, especially the latest highly transmissible Delta variant in younger and unvaccinated people, could destroy an economic recovery.

French Finance Minister Bruno Le Maire told CNBC on Tuesday that “the only thing that could jeopardize France’s economic recovery is a new wave of the pandemic”.

On Wednesday, the World Health Organization reiterated its call for wealthy nations to help poorer countries by sharing Covid vaccines, especially for health and care workers and the elderly.

Global minimum tax rate

The coronavirus pandemic may be the most pressing problem for global public health, but governments have now turned to other pressing matters, including international tax reform.

In June, treasury ministers from the most advanced economies known as the Group of Seven backed a US proposal requiring companies around the world to pay at least 15% income tax.

Last Thursday, US Treasury Secretary Janet Yellen announced that at least 130 nations had agreed to a global minimum tax on companies, part of a broader agreement to revise international tax rules.

Cormann said the deal was urgently needed, noting that “131 countries have reached an agreement on an internationally consistent path to fair taxation. Globalization and the digitization of our economies led to efficiency distortions and serious inequalities in our tax system and companies did not pay their fair share of taxes where they should. “

“We now have an agreement whereby the winners of globalization, including and especially the major digital multinationals, would pay their fair share of taxes or pay their fair share of taxes once (the deal) was in the markets in which they operate are implemented. “Their profits.”

He noted that all 131 countries have agreed that the global minimum corporate tax rate should be 15%, as have those in the group of 20 developed countries. “This underpins tax competition worldwide.”

Some low corporate tax countries like Ireland and Hungary have concerns about the deal, but Cormann said they were involved in the negotiation process: “Some countries seem to be starting from a different position,” he noted, “but 131 out of 139”. Counties (members of the G20 / OECD Inclusive Framework working together on tax reform) are on board and this is an important milestone. “

The global economy is expected to recover from the coronavirus pandemic faster than expected this year, as vaccinations in advanced economies and an enormous fiscal stimulus package in the United States unleash pent-up business activity and job creation, the Organization for Economic Cooperation and Development said on Monday.

But the pace of the recovery still hinges on vaccination programs and the ability of governments to beat back new variants of the virus, raising fresh risks even as economic activity starts to rev back up in most parts of the world, the organization said in its latest economic outlook.

The organization sharply raised its forecast for global growth to 5.8 percent in 2021, up from a 4.2 percent projection in December. It said the pace of expansion would cool to 4.5 percent in 2022 as government support programs unwind.

A government stimulus-led upturn in the United States, where President Biden is betting on a $2 trillion infrastructure package to end the effects of the pandemic faster, has helped improve the global outlook, the group said. China continues to experience the world’s strongest rebound, also lifting the global outlook.

In Europe, which has been lagging the United States in a recovery, an acceleration of vaccination programs has allowed governments to begin lifting restrictions on activities, speeding up what had been a slow economic reopening.

The opposite is true for many emerging-market economies that are suffering from slow distribution of vaccines, new outbreaks of Covid-19 and economically limiting containment measures, dampening prospects for a quick recovery.

India, which has suffered a deadly resurgence of the virus, is likely to face economic struggles as a result and a slower return to prepandemic growth levels until the impact of the virus fades, the organization said.

It estimated the economy in the United States would grow 6.9 percent in 2021; in China, 8.5 percent; in the euro area, 4.3 percent; in Britain, 7.2 percent; in Argentina, 6.1 percent; and in India, 9.9 percent.

“Our latest projections provide hope that in many countries, people hit hard by the pandemic may soon be able to return to work and start living a normal life again,” Laurence Boone, the organization’s chief economist, said during a news briefing.

“But we are at a critical stage of the recovery. Vaccination production and distribution have to accelerate globally and be backed by effective public health strategies,” she said.