I wanted to sincerely thank everyone at the OECD who helped the UK host a successful G8 Summit.
The setting was Northern Ireland’s beautiful Lough Erne, where on the eve of the Summit the British Prime Minister refreshed himself with a bracing swim, avoiding the nibbles of the pike that a certain recently-retired OECD Director used to fish for half a century ago.
Since the global financial crisis in 2008 the G20 has been the key body for handling global economic challenges. That has left questions about the role of the G8. A rapidly diminishing share of world GDP. A group without global heavyweights such as Brazil, China and India. And questions about whether such set-piece summits are the best way to get things done, or the associated security measures are the best use of taxpayers’ money.
One way recent G8 summits have responded is to the relevance question is revert to the more intimate and informal “fireside chats” that characterised the early meetings in the 1970s (when the group was set up to respond to the oil crises).
This year at Lough Erne we tried to go a step further. The three themes of Tax, Transparency and Trade (the ‘3Ts’), outlined in my last blog, were chosen because they are among the most pressing challenges for the poorest parts of the world. But also issues where G8 countries need to take action.
In other words, there is an opportunity for the G8 to show leadership, not by necessarily pledging large sums of money (though that remains important) or preaching to others, but by “getting its own house in order”, thereby stimulating action globally.
Against this backdrop, I was delighted and proud that the OECD played such a crucial and prominent role on each of the ‘3Ts’.
On tax, for example, the Secretary-General kicked off the discussion with G8 leaders. Building on years of work by colleagues in the Centre for Tax Policy and Administration and the Committee for Fiscal Affairs, the Secretary-General described the problem (that the international tax rules are out of date for our globalised economy, making it hard, for example, for multinational companies to pay their fair and transparent share of tax); the implication (lost tax revenue – in the case of the poorest countries potentially double the value of total aid flows); and possible solutions (primarily the collective political will to tackle the problem and set global tax standards).
G8 leaders agreed with this OECD diagnosis, and endorsed a plan that concrete policy proposals should be presented to the G20 later this year.
This shows the OECD at its best: getting ahead of the game in spotting a key issue; crunching the data and doing the analysis; and getting buy-in from the wider international community to act. The OECD earned their place at the G8 table. The hard work of making reform happen lies ahead.