Pursuing fiscal justice in the Andean region
Across Latin America, the storm clouds of fiscal austerity are gathering. Having been hit hard by recent falls in commodity prices, many governments in the region are implementing austerity programs that threaten to reverse hard-won gains in reducing poverty and economic inequality.In the Andean region in particular, governments face a pressing need to broaden and diversify their sources of revenue. There has been little appetite among policymakers for the kind of progressive fiscal reforms that would keep budget deficits under control while also safeguarding basic economic and social rights, however. Most have instead announced reductions in public expenditure for social programs and tax privileges for investors, among other measures intended to mitigate revenue shortfalls. As a result, those who benefited from social programs – disadvantaged groups such as low-income women, children and rural populations – are being forced to pay the price.
Against this worrying backdrop, CESR is working with partners in the region to map out the challenges and openings for promoting human rights-informed and equality-sensitive fiscal reforms.
Having co-convened an international strategy meeting – Advancing Tax Justice through Human Rights – in Lima last year, and the first-ever thematic audience on fiscal policy at the Inter-American Commission on Human Rights last October, CESR identified a growing demand among civil society organizations in the region for human rights-centered alternatives to austerity. Together with our partners DeJusticia, Red de Justicia Fiscal de América Latina y el Caribe, and Latindadd, we organized a series of events to analyze current public financing challenges in the Andean Region and identify opportunities for more equitable and human rights-centered fiscal reforms.
Following an earlier regional gathering held on May 11 in Bogotá, the most recent of this series of dialogues took place in the same city on July 14. This brought together human rights advocates, tax officials, academics, representatives of indigenous groups, business associations and others to discuss the links between fiscal policy and inequality in Colombia. The meeting came at a critical moment for the country, as the government is planning far-reaching tax reforms in the context of its post-conflict transition. Earlier this year, the Colombian government convened a Commission of Experts on Tax Equity and Competitiveness to carry out an exhaustive analysis and provide recommendations for thoroughgoing structural reforms to the tax system. The Commission’s final report declared that the current tax regime does nothing to redress the dramatic levels of economic inequality in the country, and that the overall tax take is well below the potential. It also stated that – among other failings - Colombia’s tax regime is overly complex and full of loopholes that benefit the business sector.
Just a couple of weeks before the Bogotá meeting, on June 24, CESR co-convened another dialogue in Lima, Peru, where participants got to grips with the role fiscal policy has played in both economic and social inequalities in that country. Representatives from national tax justice organizations, human rights advocates, workers' unions, academics and representatives of Peruvian indigenous groups as well as experts from international cooperation organizations explored the key challenges and opportunities for promoting progressive fiscal policy measures in the post-election context.
At both these gatherings, there was a particular focus on economic and social inequalities experienced particularly by indigenous communities and women and how these are affected by the regressive fiscal regimes in a region highly dependent on natural resource extraction. Participants also discussed the high levels of tax evasion and avoidance – particularly by large corporations and high-net worth individuals – that are draining government coffers of revenues just when they are most needed.
Underpinning these initiatives is the understanding that fiscal policy plays a determinative role in reducing inequality and fulfilling the enjoyment of fundamental human rights, such as education, health, decent work and an adequate standard of living. Given its critically important redistributive role, it is likewise fundamental to tackling the worrying levels of social and economic inequality in the region.
With soaring inequality posing an increasingly serious threat to the entire spectrum of human rights, and austerity becoming a global phenomenon, the need to bring human rights to bear in fiscal policy is more urgent than ever.
- To learn more about CESR’s work on Human Rights in Tax Policy, see here.
- Fiscal Policy and Human Rights in the Americas: Mobilising resources to secure rights
- Política Fiscal y Derechos Humanos en las Américas: Movilizar los recursos para garantizar los derechos