British Chancellor Rishi Sunak has praised the level of financial cooperation that the G7 achieved under the UK presidency, which is coming to an end this year.
Charing his final meeting of the UK’s year-long presidency, Sunak thanked the G7 Finance Ministers and Central Bank Governors in attendance for their efforts during 2021.
Under UK leadership, Sunak was keen to point out that the G7 has backed a landmark shift in global tax rules that will attempt to enforce a global minimum corporation tax of 15%.
Levied in the country where the corporation does business, the G7 hopes that the global minimum tax rule will help governments crack down on tax avoidance by multinational tech giants.
In October, the move was backed not only by the G7, but also by 136 members of the Organisation for Economic Co-operation and Development (OECD) Inclusive Framework, representing over 90% of global GDP.
Support for low-income countries
Sunak also highlighted a string of major agreements that have been struck under the UK’s leadership over the past 12 months.
For example, Sunak supported the allocation of $650 billion in International Monetary Fund (IMF) Special Drawing Rights for developing countries – effective as of August this year – alongside commitments from developed economies to channel some of these funds to countries in need.
Some of these voluntary funds are already being channelled to the IMF’s Poverty Reduction and Growth Trust, and to further support for a new Resilience and Sustainability Trust.
Additionally, the G7 finance ministers and central bank governors committed to publish their own creditor portfolios on a loan-by-loan basis to lead by example on sovereign debt transparency.
During the UK’s G7 presidency, Sunak presided over the merging of climate change and biodiversity concerns with high-level economic and financial decision-making
For example, Sunak gained G7 agreement for nations to orient themselves towards the United Nations’ net zero by 2050 targets, including coordinating on carbon pricing and mitigating against carbon leakage.
He also gained G7 agreement to follow the UK’s lead in making climate-related financial reporting mandatory and to crack down on the proceeds of environmental crime through strengthening company beneficial ownership registers.
Finally, in October this year, Sunak helped publish the ‘G7 Public Policy Principles for Retail Central Bank Digital currencies (CBDC)’ to support and inform domestic policy and design.
This joint report considers the public policy implications of central banks issuing their own digital currencies, and how to ensure this delivers benefits to economies and societies.
As the UK vacates the G7 presidency at the end of this year, it will hand over its leadership duties to Germany, which will take over in 2022.