Will there be enough food for everyone if we end tax dodging?

I wasn’t going to write about the Enough Food for Everyone If campaign.* But then Zahid Torres-Rahman opened up his big binder of generic blog posts for the Guardian and pulled out one entitled “Business Should Be Part of the Solution in [insert name of campaign here].”

Observations on things I don’t know much about

I had an interesting discussion with Zahid or whoever operates the @fightpoverty account on Twitter last night, which I’ll come back to, but let’s start with the article. I say it looks generic, because it is so off the mark.

Apparently one of the “three priority areas that are obviously missing” is “investing in small-scale farmers.” This is odd, because the IF campaign is quite specifically calling for “the G8 and other rich nations to put more life-saving aid into sustainable small-scale agriculture and nutrition.” Maybe Business Fights Poverty and IF have different views on where this financing should come from, but it’s certainly not missing. He also points to “helping mitigate the impacts of climate change” as absent, but that’s right there, too, on the same page.

Where Zahid may be making a more valid point is in his suggestion that the campaign sounds a bit anti-business. Looking round the website, I was quite surprised. This is clearly a campaign aimed at government, and specifically at the UK’s presidency of the G8, so the analysis is naturally about areas where the campaign thinks voluntary action by businesses is not enough, and the government should step in. But I couldn’t find anything positive about business anywhere on the web pages, and all the recommendations are directed at government, so we are left with a feeling that businesses’ only impact on poverty is as tax dodgers and land grabbers.

Now, Zahid and I know that this isn’t what the NGOs who are part of  the campaign think:

And sure enough, the campaign report [pdf] does say the following – and I only checked the executive summary, so I presume there is more within the full report:

private investment in developing countries has major potential as an important driver of development, and some companies are doing the right thing in poor countries: such as creating jobs and training farmers to improve yields; getting produce to market; upholding workers’ rights; respecting rights to land and water; and avoiding overburdening smallscale farmers with risks.

So in general terms, while I can understand that people in business might have issues with the campaign’s tone, I don’t think Zahid’s criticism really applies to its content.

The tax and hunger connection

Zahid wants to see an agenda to end hunger that starts from that goal and works logically through to the reforms needed to achieve this. That’s not in the nature of big campaigns like this, which work the other way, starting from the big issues that the NGOs think need to be included, and then finding a unifying theme. The problem with the “enough food for everyone if…” framing is that it implies that this handful of reforms are sufficient conditions to end poverty. Instead, it would be easier to make a case that they’re necessary, as the campaign report does, when it talks about, “four areas that would start to make inroads into the problem.”

Look at the tax part of the campaign. I’ve heard some quite critical comments from business sources, who say that the campaign’s anti-business rhetoric sets back the progress in developing a shared agenda across NGOs and business. Christian Aid’s linking of infant mortality with tax evasion back in 2008 was effective at getting attention, but some people found it a touch sensationalist. And yet the same link is made again in the IF campaign report.

The argument, if not the subject matter, is surely fairly trivial. Is more tax revenue among the necessary conditions for ending hunger? If you start from the perspective that public investment in smallholder agriculture is needed (and I once proofread an ActionAid report on the subject, which convinced me) then yes. Of course it’s not a sufficient condition, because of other things such as the need to grow the private sector and to end corruption, but this does not change the fact that increasing tax revenues in developing countries is one factor in the solution to hunger and the child mortality that comes from it. And it is hardly a controversial assertion that developing countries struggle to tax multinationals adequately.

What is ironic is that the IF campaign’s analysis is inherently pro-business. First, because there have to be businesses to tax in the first place. I’ve been in meetings with more radical NGOs in developing countries who challenge the whole notion of a campaign based on the good that tax revenues from foreign investment can do, because they’re opposed to there being more foreign investment at all. That’s not the IF campaign’s stance.

Furthermore, the growing number of business people who have spoken out on the issue of tax avoidance shows that it’s not anti-business to be anti-tax dodging per se. Certainly, if you want to support the growth of domestic businesses, there’s some merit to the argument that they shouldn’t be out-competed by multinational companies able to use cross-border tax planning to reduce their tax charges.

Where I do think the IF campaign feels a bit lopsided is that it focuses entirely on how the UK government and the G8 can fix hunger. In tax, the area that I know a bit about, the real rate limiting step is not here in the UK, it’s in developing countries. We need civil society in those countries to create the political momentum to deal with inadequate and unfair tax policy and administration before they’d be in a position to benefit from the reforms advocated by IF. The NGOs in IF are working on that too, I’m just surprised they don’t say so.

*I wasn’t going to write about it, because I was a cog in the machine that was developing its policy platform (not one with any influence) before I started my PhD. I suppose that is a conflict of interest or something, which is why I’m not writing about the detail of the policy recommendations just now.