The mobilisation against Hunger and Poverty from Brazil

President of Brazil Luiz Inácio Lula da Silva imposed the entrance of a Task Force for a Global Alliance Against Hunger and Poverty in the priorities of the G20 which will take place in 18th and 19th November. Along with that, during the Finance’s ministers two-days meeting of 24th and 25th July in Rio de Janeiro, the president Lula also thought about imposing a tax to the ultra-rich people and fight against inequality.

The agenda of Ministers of Finance’s G20

The finance ministers’ meeting is one of the final gatherings before the G20 summit in Rio on November 18th and 19th. At a previous meeting in São Paulo in February, the Finance ministers discussed methods to tax the ultra-rich and prevent tax evasion by billionaires. This initiative aims to develop strategies to tax billionaires and other high-income individuals, based on the research of French economist Gabriel Zucman, an expert on the connection between tax evasion and inequality.

“The fight against inequality, hunger, and poverty cannot be waged by a single country,” Lula told reporters. “It requires a collective effort from all nations willing to shoulder this historic responsibility.”

The initiative has the backing of France, Spain, South Africa, Colombia, and the African Union. However, the discussions have been highly controversial, and significant progress remains uncertain. Brazilian Economy Minister Fernando Haddad noted that the ministers reached a deadlock in February.

The Task Force for a Global Alliance Against Hunger and Poverty

It was during the G20 Summit in New Delhi in September 2023 that Brazilian president Luíz Inácio Lula da Silva announced the creation of a task force to establish the Global Alliance, committing to reversing setbacks in achieving Sustainable Development Goals 1 (poverty eradication) and 2 (zero hunger and sustainable agriculture).

Lula has made the issue of hunger and poverty a key priority of Brazil’s G20 presidency and aims to establish a global alliance to gather funds and knowledge towards implementation of public policies and social technologies proven effective in reducing global hunger and poverty.

According to a UN Food and Agriculture Organization (FAO) report, the number of people suffering from hunger in the world increased by 122 million people in 2022 when compared to 2019, before the COVID-19 pandemic, between 691 and 783 million people. The Task Force was created in this scenario, and is based on Brazil’s extensive experience and international recognition in income transfer policies and reduction of poverty and inequality through programs such as Bolsa Família, which benefits more than 55 million people in the country.

“Several countries are working to strengthen their fiscal capacity while seeking to meet the legitimate aspirations of their populations for social justice and high-quality public services,” he stressed.
This is the first time the G20 finance ministers have spoken in unison on several issues related to international tax cooperation, including taxation of the super-rich.

Tax the ultra-rich is a priority

Tax the ultra-rich people is one of the priority of Lula’s presidency. Under the current proposal before the G20, individuals with assets exceeding $1 billion would be required to pay a 2% wealth tax. Brazil’s Finance Minister, Fernando Haddad, indicated that the final declaration will reference a proposal to tax the super-rich, but he did not specify the exact wording or confirm if the 2% rate will be mentioned.

Janet Yellen, US Treasury Secretary, expressed her perplexity: “Tax policy is very difficult to coordinate globally, and we don’t see a need or really think it’s desirable to try to negotiate a global agreement on that”.

“At the top of the pyramid, tax systems stop being progressive and become regressive. The super-rich pay proportionally much less tax than the working class,” Lula said. On the same side, France, Spain and South Africa, support the initiative, believing that “an agreement on a global tax on billionaires is necessary to diminish the attractiveness of tax havens”.