Haddad criticizes the super-rich at the opening of the G20 – 02/28/2024 – Market

In his opening speech at the 1st meeting of ministers and presidents of G20 Central Banks this Wednesday (28), Minister Fernando Haddad (Finance) criticized the super-rich, citing the relaxation of labor laws and tax evasion.

“We have reached an unsustainable situation, in which the richest 1% hold 43% of the world’s financial assets and emit the same amount of carbon as the poorest two-thirds of humanity,” said Haddad via video call — the minister is isolated in his residence , in São Paulo, after receiving a positive diagnosis for Covid-19.

According to the minister, globalization and economic crises have caused worsening working conditions, hyper-financialization and a complex offshore system for tax evasion by the super-rich.

“At the same time that millions were lifted out of poverty, especially in Asia, there was a substantial increase in income and wealth inequalities in several countries,” said the minister.

In his speech, which lasted ten minutes, he also said that the world has been struggling to redefine the contours of a new globalization, with the climate crisis and poverty at the center of attention.

“The poorest countries must bear growing environmental and economic costs, at the same time that they see their exports threatened by a growing protectionist wave, as well as a significant portion of their revenues compromised by debt service, in a scenario of high interest rates post- pandemic,” said Haddad.

According to the president of the Brazilian BC, Roberto Campos Neto, solid and “well-calibrated” macroeconomic, fiscal and monetary policies are fundamental in this sense, as they contribute to reducing inequality, as well as a.

“There is a lot of evidence to support that inflation has a negative impact on poverty levels. It disproportionately harms the most vulnerable, deepening existing social gaps and inequalities,” stated Campos Neto.

According to the BC president, global sovereign debt reached high levels after the pandemic, at an equally high cost, which generates less liquidity for emerging markets and low-income countries.

After the opening speeches by the Brazilian authorities, the floor was given to the American delegation, with Janet Yellen (Secretary of the Treasury) and Jerome Powell (President of the Federal Reserve).

After delegations’ initial considerations, the G20 will debate strategies to integrate inequality analysis as a key macroeconomic policy concern, Haddad said.

“We believe that inequality should not just be treated as a social concern, a mere corollary of economic policy. Our proposal is to center inequality as a fundamental variable for the analysis of economic policies. We want to develop the most appropriate analytical tools for this, in benefiting from recent research by economists and other social scientists, who have made important contributions to the topic.”

Afterwards, the president of the Brazilian BC Roberto Campos Neto will coordinate debates on the current macroeconomic situation and international financial stability.

On Thursday (28), the last day of the meeting, the G20 will address progressive taxation in the morning, addressing ongoing negotiations at the OECD (Organization for Economic Co-operation and Development) and the UN (United Nations). , on global minimum taxation.

“We need to admit that we still need to make the world’s billionaires pay their fair share in taxes,” Haddad said.

The last debate will be on debt and sustainable development, in order to address the high debt levels of countries and the need for investments for the energy transition.

On December 1, 2023, Brazil assumed the presidency of the G20 and defined as central themes of its management the fight against poverty and inequality, effective financing for sustainable development, global governance and taxation reforms, global cooperation for transformation ecological situation and the countries’ chronic debt.

What is the G20?

It is the abbreviation for Group of 20, which brings together the countries with the largest economies in the world. Member States meet annually to discuss economic, political and social initiatives. The group defines itself as the main forum for international economic cooperation, with “an important role in shaping and strengthening global architecture and governance across all major international economic issues.”

Which countries are part of the group?

The group is made up of 19 countries and two economic blocs. They are Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, South Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, United Kingdom, United States, European Union and African Union (participating for the first time, after joining the group in 2023).

Figures released by the organization itself state that, together, nations represent around 85% of global GDP, more than 75% of world trade and almost two thirds of the entire population.

How did it come about?

The G20 was founded in 1999, following a financial crisis in Asia. The initial objective of the forum was to bring together Economy ministers and central bank presidents from member countries to discuss economic issues.

From 2008 onwards, given the growing importance of emerging countries in the global economy and after the global financial crisis, meetings began to be attended by heads of state. Themes have also become broader, including topics such as sustainable development, health, agriculture, energy and the environment.

How does the group work?

The presidency of the G20 is rotating, and each year a different member country is chosen to lead the group. The country in question is responsible for formulating the group’s agenda for the period and serves as host for the event’s summit that year, receiving not only representatives from the other members of the bloc but also those from invited nations. Finally, the group president defines what topics will be discussed during the meeting.

Brazil received the presidency of the group from India on December 1, 2023 and will lead it for one year, when it will pass the baton to South Africa.

What topics will be debated?

Brazil listed three priority themes to be debated under its presidency: combating hunger, poverty and inequality; sustainable development and global governance reform.

How do debates take place?

130 virtual and in-person meetings of the working groups and task forces that make up the G20 are planned. The discussions are divided into two “tracks”: Sherpas and Finance.

The Sherpa Trail, whose name refers to a Nepalese ethnic group that guides climbers to the summit of Mount Everest, is made up of personal emissaries of the G20 leaders, who supervise the negotiations, discuss the points that form the summit’s agenda and coordinate most of the of work.

The coordinator of this trail, appointed by President Lula, is Ambassador Maurício Lyrio, Secretary of Economic and Financial Affairs at Itamaraty.

The Finance track deals with strategic macroeconomic issues and is led by the Finance Ministers and Presidents of the Central Banks of the member countries. The coordinator of the Finance Track is economist and diplomat Tatiana Rosito, Secretary of International Affairs at the Ministry of Finance.

What are the main meetings?

The main meeting is the G20 Summit, which aims to bring together all the group’s heads of state. It is scheduled for November 18th and 19th in Rio de Janeiro. It is expected to take place at MAM (Museum of Modern Art).

The meeting of foreign ministers, scheduled for this week, is the first at ministerial level under the Brazilian presidency. It will take place at Marina da Glória. The next one will take place next week, bringing together Finance Ministers (and equivalent portfolios) and Presidents of the Central Banks of member countries in São Paulo.

Another 19 ministerial meetings are planned before the Summit of heads of state. They will occur mainly in Rio de Janeiro, but also in São Paulo, Brasília, Fortaleza, Belém, Maceió, Salvador, Cuiabá, Manaus, Foz do Iguaçu and Washington (United States).