[ad_1]
The senior IMF official in charge of Latin America urged governments to make the rich pay “more” taxes, saying that unless the need for a fairer economic system is addressed, the world’s most unequal regions will not develop.
The fund’s western hemisphere director, Alejandro Werner, said in an interview with the Financial Times as he prepares to step down after eight years of work, the recent social unrest in Latin America highlights the achievement of more equal income distribution. The necessity.
International Monetary Fund Called before To help the most affected people by temporarily paying more taxes for high-income earners around the world who have become rich due to the pandemic. As the coronavirus has exacerbated long-standing problems such as low growth, high inequality and poverty, Latin America has suffered more than any other region.
Werner marked the “underutilized” property tax as a good starting point for Latin America.
“You need to have a more progressive tax system… The upper class pays much higher fees, and then you have to have an economic system that is more competitive than today,” he said.
“Latin America cannot become the most unequal region in the world, and cannot enter the next stage of economic development.”
Before joining the International Monetary Fund in 2013, Werner was a senior official in the Mexican Ministry of Finance and worked in a Mexican bank; he will retire from the fund at the end of August.
The spillover effects of US stimulus measures, China’s strong growth and high global commodity prices have helped the region to rebound from a 7% decline in GDP last year and the International Monetary Fund and the private sector to rebound faster than expected. Its prospects are more optimistic.
Werner said that the International Monetary Fund’s current forecast of 4.6% growth in Latin America this year may be revised up, partly because economic activity can remain higher than expected despite the continued existence of the new crown virus infection.
“The correlation between economic activity and infection rates is now much weaker than in the past. [the second quarter] Last year,” he said.
Brazil and Mexico, the two largest economies in the region, have given priority to reopening their economies despite the high number of deaths, which helped them recover faster than some of their neighbors that insisted on the blockade.
Financial Times Excess Mortality Study It was found that Latin American countries suffered some of the highest death rates in the world during the pandemic, and the difference between countries that implemented strict lockdowns (such as Peru and Colombia) and countries that did not implement strict lockdowns (such as Brazil or Mexico) was relatively small.
Latin American countries have also adopted different approaches in terms of additional spending. Countries such as Brazil, Peru, and Chile have assumed a large amount of additional debt to support the countries most affected by the coronavirus.
Mexico is a notable exception. Although Wall Street Bank predicts that it will grow by more than 5% this year, this does not make up for the 8.5% contraction it suffered last year. Werner said that if a stimulus package is introduced, “the effect will be better.”
In recent years, the political turmoil in the region has caused a wave of street protests in Chile and Ecuador in 2019. The protests spread to Peru and most recently Colombia, leading to political polarization and strengthening the influence of outside candidates from left and right extremists in the elections.
In Peru, the candidate of the Marxist-Leninist party, Pedro Castillo (Pedro Castillo), Seems to have won This month’s presidential election, even though his conservative player Keiko Fujimori challenged his victory by claiming election fraud.
“The volatility we see in the political choices of the population reflects the strong demand for better income distribution, and beyond that, there are many more… more equitable economic and social systems,” Werner said.
In April, Colombia tried to implement tax reforms to increase revenue and expand its tax base, but after a wave of violent protests across the country, the government was forced to cancel the reform within a few days.
Werner said that tax reforms to increase revenue are needed to repair the public finances of the entire region, but he added that Bogotá’s experience shows that a broad agreement needs to be reached on economic reforms beyond the traditional political class.
“The political environment for implementing reforms is very difficult, so countries must be very cautious when designing these reforms, reaching out to the general public and finally reaching a consensus… because these reforms are necessary,” he said.
“Otherwise, we will see severe instability, which will damage employment, damage recovery, and damage social indicators. This is a very difficult landscape.”
[ad_2]
Source link
