By Anis Chowdhury
SYDNEY, Jan 2 2023 – 2022 has been a year of great uncertainty when it seemed the world perilously reached the brink of self-destruction – be it human-induced climate change or military conflict. Welcoming 2022, we had enough reasons to be optimistic; but it was another ‘year of living dangerously’ – Tahun vivere pericoloso in the words of Soekarno, or an annus horribilis in the words of the late Queen Elizabeth.

Anis Chowdhury

No end to Covid-19
The joy of the COVID vaccine discovery quickly vanished as the ‘vaccine apartheid‘ blatantly prioritised lives in rich nations, especially of the wealthy, over the ‘wretched of the earth’, and corporate profit triumphed over people’s lives. Meanwhile, Dr Anthony Fauci’s sober warning of a more dangerous COVID variant emerging this winter may come to be true as China, the country of 1.4 billion, struggles to deal with the surge in cases since it has largely abandoned its unpopular ‘zero COVID’ policy.

New cold war turns into proxy war
Whereas the global pandemic required extraordinary global unity, unfortunately, a ‘new cold war’ quickly turned into a ‘hot war’, bringing the world to the verge of a devastating nuclear war for the first time since the 1962 Cuban missile crisis. Russia, finding itself cornered by an expanding NATO, decided most foolishly to invade Ukraine, believing it could overrun the country without any resistance. While the heroic Ukrainians continue to defend their motherland, Russia seems to have become bogged down in a proxy war with NATO.

If the proxy war with Russia was not enough, the US is recklessly provoking China towards another ‘hot war’, following Trump’s trade war. Clearly the monopoly capital of the US and its military-industrial complex are pushing the US to a ‘Thucydides Trap‘. More than 60 years ago, President Eisenhower, in his farewell address to the nation, warned about the military-industrial complex, a formidable union of defence contractors and the armed forces. Eisenhower, a retired five-star Army general, who led the allies on D-Day, saw the military-industrial complex as a threat to democratic government and global peace. Alas, his dire warning fell on deaf ears.

Western hypocrisy exposed
The Russian invasion of Ukraine exposed Western pretence. The Western mainstream media unashamedly declared the dislocation of Ukrainians intolerable because the victims are blue-eyed, blond-haired Europeans, not “uncivilized” third world inhabitants or “barbaric” Arabs. Western duplicity is nowhere as blatant as it is in the case of the Palestinian plight. To them, Russia’s occupation and annexation of parts of Ukraine is illegal; but Israel’s occupation and annexation of Palestinian land as well as gross human rights violations are justified on various professed grounds, e.g., right to protection from “terrorist acts”.

Leadership vacuum
The world now needs Eisenhower to resist the military-industrial complex; it needs Teddy Roosevelt to break monopoly capital’s stranglehold and to protect consumers, workers and the environment; it needs Franklin Roosevelt to promote multilateralism and social justice; it needs Kennedy to defuse crises. At the height of the ‘old cold war’, Kennedy ate humble pie by quietly removing the security threat to the USSR posed by offensive weapons (Jupiter MRBMs) deployed in Turkey, and publicly pledging that the US would never invade Cuba or attempt another Bay of Pigs operation. Eisenhower was magnanimous enough to bear the lion’s share of financing the USSR’s proposal for global efforts to eradicate smallpox – the leading cause of death and blindness then.

Alas, we see no such signs in a world of Trump, Biden, Johnson, Marcon and Scholz. Even ‘out of touch‘, billionaire Sunak does not inspire any hope, despite being the first coloured person of colonial descent to occupy the 10 Downing Street. Sunak will probably try to prove himself holier than the Pope, instead of promoting the interest of former colonies or descendants of colonial subjects or downtrodden.

No better leadership in the South
The South is also devoid of visionaries, such as Nkrumah or Nehru who promoted non-alignment and Southern unity. Nehru’s land is now overtaken by Modi’s Hindutva movement, openly promoting violence against minorities. Unsurprisingly, Modi was in sync with Trump; but he equally cosies up to Biden professing to promote democracy and human rights. Sadly, Mandela’s South Africa is mired in scandal after scandal.

Although many, including myself, eagerly looked forward to Lula’s victory in Brazil, neither his return to power nor the so-called ‘second pink tide’ in Latin America should make one overly joyous. The Left has demonstrated its propensity to fracture or implode easily, e.g., contributing to Correa’s defeat in Ecuador, or aiding the Right to strike back in Peru. In Colombia, Finance capital, mining giants and the elite have already ganged up on Petro’s vow to tackle inequality with tax and land reforms and his proposed ban on new oil and gas exploration. Chile’s Boric has faced setbacks including the rejection of a new constitution, forcing his concessions to the Centre-Right. Constitutional coup is a common strategy of the established vested interest.

Some inspirations down under
Down under, the Australians soundly defeated an increasingly autocratic and unaccountable conservative government in May. It was the government that implemented inhumane off-shore detention centres for people seeking to escape persecution and starvation in their own countries (about to be emulated by the UK Tory Govt.). It also was cruel enough to pursue vulnerable people on social security payments with a robotic program whilst cutting taxes for the wealthy and letting them evade tax. It was the government which created plumb jobs for the boys. It was the government which continued to deny climate science and refused to act.

Finally, the Australians got rid of it. Labor showed extraordinary discipline in opposition, and in government, it stood up to big business and vested interests. It has quickly moved to put in place the processes to:

• set up an independent anti-corruption body with real teeth;
• recognise the voice of First Nations people;
• respect human rights of asylum seekers languishing in detention centres;
• address environmental degradation & achieve 43% emissions reduction target by 2030;
• restore labour rights, fair and decent wages;
• review RBA’s performance to ensure monetary policy serves broader national interest, not the finance; and
• balance geo-political alliances.

Its progressive agenda is quite long. Let me end here, wishing the Australian Labor Government success to inspire other nations – large and small, developed and developing; and with best wishes for you to be safe and remain healthy, even if not quite bright-eyed and bushy-tailed.

IPS UN Bureau

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By Kavazeua Katjomuise
UNITED NATIONS, Jan 2 2023 – I recently overheard a conversation among three young people at a café in an African city. It was a passionate discussion on the management of funds allocated to the COVID-19 response and the effectiveness of the mechanisms in place to manage the money to achieve the intended purposes.

The concerns of my young brothers and sister resonated with me, as I could not help but reflect on how COVID-19 exposed cracks in Africa’s fragile revenue institutions and contributed to widening the financing gap for the region’s development.

Weak institutions, especially revenue collection and customs authorities, are a challenge in Africa, which loses billions in potential tax revenue, including through tax avoidance and evasion, especially by multinational companies.

UNCTAD’s Economic Development Report 2020 says Africa lost $88.6 billion through illicit financial flows in 2019.

This undermines efforts to mobilize domestic resources to finance the continent’s development as outlined in the United Nation’s 2030 Agenda and African Union Agenda 2063, which both recognize the primacy of strong and effective institutions in driving sustainable development.

African countries fare poorly on domestic resource mobilization compared to other developing countries. The share of revenue to gross domestic product (GDP) in 2020 averaged 16 per cent for Africa, compared to 35 per cent for Asia-Pacific, and 24 per cent for Latin American Countries. Africa’s Least Developed Countries fared even lower at 13.3 per cent.

Governance influences tax revenue collection considerably in Africa. Good governance and strong institutions – measured through regulatory quality, the enforcement of the rule of law, strong institutional capacity and lower corruption – enhance a country’s ability to mobilize domestic resources through revenue collection.

However, corruption erodes tax compliance. Citizens in countries with high corruption are reluctant to pay taxes because of the perception that resources will be misused.

Empirical evidence shows that countries with a low Corruption Perception Index (CPI) score collected 4.3 per cent more in tax revenue to GDP than those with a high CPI score (2).

Addressing governance issues and improving transparency in the use of public resources is vital to building trust and generating increased domestic resources. Efforts should be geared at supporting African countries to strengthen governance and tackle corruption.

Digitization

Technological improvements and digitization could be leveraged to improve scale and efficiency and prevent corruption through increased transparency.

The pace toward digitization on the continent has quickened in recent years, particularly in the wake of COVID-19. Before the pandemic, Africa recorded progress toward digitization, albeit driven by the private sector mainly through incubators, start-ups, technological hubs and data centres.

Digitization is already transforming African economies in several ways, such as revolutionizing retail payment systems, thus allowing consumers and businesses to save billions in transaction costs, facilitating financial inclusion, and enhancing the efficiency of fiscal and revenue administration.

For example, the launch of M-Shwari in Kenya increased access to financial services for millions who may otherwise have been excluded from the financial sector. Taking advantage of this trend, the Kenya Revenue Authority (KRA) introduced electronic banking in 2016 to expedite the payment of taxes through secure electronic payment.

This, coupled with the launch of iTax, has enabled a single view of taxpayer information, allowing for real-time monitoring of revenue collection, thus improving the efficiency of payment to government suppliers and social protection grants.

Digitization has also enabled developed countries to build effective and robust Digital Rights Management (DRM) systems, critical to ensuring Africa’s recovery from COVID-19.

However, despite the widespread adoption of digital technologies across the world, the digital divide excludes many African countries from the benefits of digital technology.

Digitizing tax administration in Africa has been relatively slow. An International Monetary Fund’s analysis (ISORA 2018: Understanding Revenue Administration) shows that, relative to other developing regions, African countries scored below the world average on almost all indices related to tax administration performance, especially on the degree of digitization.

The average score for the degree of digitization was 29 per cent for Africa compared to 49 per cent and 46 per cent for Latin America and the Caribbean as well as East Asia Pacific, respectively.

The COVID-19 pandemic contributed to an erosion of tax collection in Africa due to a lack of digitization, as countries could not fully work remotely. This underscores the urgency of investing in the digitalization of tax collection processes, paired with other digitization initiatives such as digital identification, digital finance, and electronic payment systems.

Evidence shows that enhanced tax collection has followed the introduction of ICTs, including the computerization of tax and customs administration to support tax payments.

Countries that have modernized and digitized tax revenue administration have benefited from increased revenue due to improved efficiency, reduced corruption through enhanced transparency, and increased tax compliance.

For example, the introduction of electronic cash registers by the Ethiopia Revenue and Customs Authority increased Value Added Tax (VAT) collections by 32 per cent.

Opportunity arises

COVID-19 provides an opportunity for African governments to embrace digitization by leveraging information and communications technology (ICT) as well as mobile technology.

Increased mobile penetration is an opportunity for African countries to digitize their fiscal and revenue administration. Development partners can support African countries in bolstering DRM systems by channeling substantial Official Development Assistance (ODA) towards strengthening capacities and institutions, including tax authorities, to improve tax collection.

By digitizing fiscal and revenue collection institutions and modernizing customs systems, African countries can build robust systems and overcome the challenge of weak institutions.

This would help enhance African countries’ ability to address tax evasion and avoidance, tackle money laundering and tax havens, and curtail Base Erosion and Profit Sharing (BEPS).

Development partners and international organizations can increase support to Africa to strengthen its capacity for tax assessment, including through training, mentorship and coaching.

Complementary measures are also necessary to enhance African countries’ capacity to enact and implement policies and legislation to tackle BEPS and transfer pricing, starting with a comprehensive review of all tax treaties, tax incentives, and trade and investment agreements to eliminate all loopholes for BEPS and other IFFs.

This is central to de-risking Africa’s fiscal space for long-term sustainable development in the post-pandemic era.

In conclusion, building strong institutions through digitizing key institutions, especially revenue authorities, is critical to boosting domestic resource mobilization systems.

By digitizing fiscal and revenue collection institutions and modernizing customs systems, African countries can build robust DRM systems and overcome the challenge of weak institutions.

Source: Africa Renewal, United Nations

IPS UN Bureau

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Excerpt:

The writer is a Senior Economic Affairs Officer and leader of the Policy Analysis and Coordination team in the UN Office of the Special Adviser on Africa (UN – OSAA).

By Thalif Deen
UNITED NATIONS, Jan 2 2023 – A US Senator once described Ukrainian President Volodymyr Zelensky, perhaps facetiously, as “a Winston Churchill in a tee shirt”.

And last month, when he addressed the US Congress – with the presence of about 100 Senators and 435 Congressmen – he tried to re-live that moment.

While most of the Senators and Congressmen were in business suits for the formal occasion, Zelensky opted for green military fatigues and a matching sweatshirt

And he was the second war-time head of government to address the US Congress, after British Prime Minister Winston Churchill’s 1941 address to Congress during World War II.

In his address December 21, the 44-year-old Zelensky appealed for increased economic aid, sophisticated weapons and security assistance.

According to a report in the New York Times last month, if Congress passes the budget bill (it did), the US aid to Ukraine since the Russian invasion last February would amount to a hefty 100 billion dollars “allocated over four emergency spending packages.”

“We have artillery, yes thank you,” Zelensky told Senators and Congressmen, “We have it. But is it enough? Honestly, not really?”

Although the US has been sending a staggering array of weapons, including 1,400 Stinger missiles, GPS-guided joint Direct Attack Munition (JDAM) and the Patriot missile system, Ukraine has requested even more advanced weapons, including M1A2 Abrams battle tanks and F-16 fighter planes.

But the US is holding back both for security reasons.

According to the State Department, more than 40 US allies, have provided economic aid, political support or weapons to Ukraine in its hard-fought battle with Russia, one of the world’s major nuclear powers.

Norman Solomon, Executive Director of the Washington-based Institute for Public Accuracy (IPA) told IPS while the Russian government is entirely responsible for its horrendous decisions to invade Ukraine and to persist with warfare there, the United States has refused to engage in actual diplomacy to avert the war or to seek a workable end to it.

The vast ongoing shipments of arms from the U.S. to Ukraine are of such a huge magnitude that they signify many billions of dollars in profits for U.S.-based weapons makers, he pointed out.

And those shipments of weapons represent eagerness in Washington to escalate the conflagration rather than seek ways to reduce and end it, said Solomon, author of “War Made Easy: How Presidents and Pundits Keep Spinning Us to Death”

“The tremendous quantity of weaponry flowing from the USA to Ukraine can be understood as an extension of the U.S.-led NATO approach to Russia since the fall of the Soviet Union — encirclement and confrontation with Russia instead of trying to find genuine geopolitical solutions for Europe as a whole.”

The U.S. withdrawals from the Anti-Ballistic Missile (ABM) Treaty in 2002 and from the Intermediate-Range Nuclear Forces (INF) Treaty in 2019, he argued, were reckless steps for conflict between the world’s two nuclear superpowers that could end in global omnicide.

Now, the United States is proceeding to maximize the profits of its military-industrial complex while boosting the likelihood that the war in Ukraine will keep getting worse. The vows of victory in Ukraine, he noted, are fervent expressions of madness in Washington and in Moscow.

“Rather than pursue avenues for diplomacy that could bring the terrible suffering in Ukraine to an end, the U.S. government policy is to further enrich U.S. military contractors and escalate even further a war that is already a catastrophic reality,” he declared.

US Secretary of State Antony Blinken told reporters last month the United States will continue to work closely with more than 40 allies and partners in support of the people of Ukraine as they defend their freedom and independence with extraordinary courage and boundless determination.

“We will continue to support Ukraine for as long as it takes, so it can continue to defend itself and be in the strongest possible position at the negotiating table when the time comes,” he declared.

In a “Fact Sheet” released last July, the State Department provided a partial breakdown of US arms to Ukraine, which includes:

Over 1,400 Stinger anti-aircraft systems; more than 6,500 Javelin anti-armor systems.

Over 20,000 other anti-armor systems.

Over 700 Switchblade Tactical Unmanned Aerial Systems.

126 155mm Howitzers and up to 411,000 155mm artillery rounds.

72,000 105mm artillery rounds.

126 Tactical Vehicles to tow 155mm Howitzers.

22 Tactical Vehicles to recover equipment.

16 High Mobility Artillery Rocket Systems and ammunition.

Four Command Post vehicles.

Two National Advanced Surface-to-Air Missile Systems (NASAMS).

20 Mi-17 helicopters.

Counter-battery systems.

Hundreds of Armored High Mobility Multipurpose Wheeled Vehicles.

200 M113 Armored Personnel Carriers.

Over 10,000 grenade launchers and small arms.

Over 59,000,000 rounds of small arms ammunition.

75,000 sets of body armor and helmets.

Approximately 700 Phoenix Ghost Tactical Unmanned Aerial Systems.

Laser-guided rocket systems—and more.

The United States also continues to work with its allies and partners to provide Ukraine with additional capabilities to defend itself

According to the Central Intelligence Agency (CIA), the Russian Federation’s military and paramilitary services are equipped mostly with domestically-produced weapons systems, although since 2010, Russia has imported limited amounts of military hardware from several countries, including Czechia, France, Israel, Italy, Turkey, and Ukraine.

The Russian defense industry is also capable of designing, developing, and producing a full range of advanced air, land, missile, and naval systems. As of 2021, Russia is the world’s second largest exporter of military hardware.

The Russian armed forces include approximately 850,000 total active-duty troops (300,000 Ground Troops; 40,000 Airborne Troops; 150,000 Navy; 160,000 Aerospace Forces; 70,000 Strategic Rocket Forces; approximately 20,000 special operations forces; approximately 100,000 other uniformed personnel (command and control, cyber, support, logistics, security, etc.); estimated 200-250,000 Federal National Guard Troops.

IPS UN Bureau Report

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