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Oxfam Warns Trump Foreign Aid Cuts Could Help Kill More Than 9 Million People by 2030
"Governments must restore their aid budgets, and shore up the global humanitarian system that faces its most serious crisis in decades," said an advocate with the international charity Oxfam.
Apr 10, 2026
The global anti-poverty group Oxfam International warned this week that US President Donald Trump’s decision to slash foreign aid by more than half could kill nearly 10 million people by the end of the decade.
Responding to new data released Thursday by the Organization for Economic Cooperation and Development (OECD) showing the largest annual drop in the history of official development assistance, Oxfam said “wealthy governments are turning their backs on the lives of millions of women, men, and children in the Global South.”
The OECD released preliminary data on international aid that was provided last year by member countries of the organization's Development Assistance Committee (DAC), finding the largest annual drop in the history of official development assistance.
OECD member countries provided $174.3 billion in aid last year, according to the new data, representing 0.26% of the countries' combined gross national income.
In 2024, the countries sent $215.1 billion, or 0.34% of their gross national income to developing countries, including across the Global South—helping to provide nutritional assistance and healthcare initiatives among other programs.
US foreign aid spending dropped by 56.9% after Trump dismantled the US Agency for International Development, cut smaller aid programs, and pushed Congress to rescind previously approved foreign assistance.
"At a time when aid cuts are already driving instability and fostering greater inequality, government donors are cutting life-saving aid budgets while financing conflict and militarization."
Overall, wealthy OECD countries provided 23.1% less in foreign aid last year than they did in 2024—a greater decline than what the Institute of Global Health in Barcelona projected in February when it released a study in The Lancet, evaluating the impact of development assistance funding declines around the world.
The institute found that aid cuts in 2025 alone, which it assumed would represent a 21% decrease in funding, would lead to 695,238 excess deaths. If cuts continued at the same rate, an estimated 9,416,417 people could die of preventable diseases like malaria and AIDS, starvation, and other impacts by 2030.
The drop in foreign aid spending would suggest even more people could be killed by the cuts over the next four years.
“We are in a time of increasing humanitarian needs; strong pressures on the poorest and most fragile countries; and facing growing global uncertainties and massive insecurity," said Carsten Staur, chair of the OECD's Development Assistance Committee (DAC), which compiled the data. "In this situation, the world needs more ODA, not less—to help fight extreme poverty, improve resilience, and mobilize more private resources."
Trump's cuts helped make Germany the largest provider of development assistance for the first time ever, providing $29.1 billion to countries in need. The US sent $29 billion while the United Kingdom provided $17.2 billion, Japan sent $16.2 billion, and France sent $14.5 billion. All five of the top ODA providers reduced their foreign aid spending, accounting for 95.7% of the total decline.
Eight out of the DAC's 34 member countries either maintained or increased their development aid spending, and four countries—Denmark, Luxembourg, Norway, and Sweden—exceeded the United Nations' target of spending 0.7% of their gross national income on ODA.
Didier Jacobs, development finance lead for Oxfam, emphasized that while "recklessly" cutting foreign aid, "the Trump administration has been preparing to ask Congress for tens of billions in additional funding for bombs, ammunition, and other military equipment relating to its unlawful war against Iran."
"At a time when aid cuts are already driving instability and fostering greater inequality, government donors are cutting life-saving aid budgets while financing conflict and militarization. Cuts from donors including Germany, France and the UK will be felt by the world’s poorest," said Jacobs.
In addition to slashing military spending instead of crucial foreign aid, he said, "there are other ways to find tens of billions, such as by taxing the $2.84 trillions of dollars that the super-rich hide in tax havens.”
"Governments must restore their aid budgets," he said, "and shore up the global humanitarian system that faces its most serious crisis in decades."
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Trump's Illegal Iran War to Push US Inflation Sharply Higher, OECD Projects
"Every single one of this administration's policies is doing what it can to raise prices," said one critic.
Mar 26, 2026
The Organization for Economic Cooperation and Development on Thursday released a report projecting that President Donald Trump's unconstitutional war with Iran will sharply increase inflation in the US this year.
According to OECD, the disruption in energy markets caused by the war means that "inflation pressures will persist for longer," with inflation in G20 nations "now expected to be higher in 2026 than previously projected."
OECD projects that inflation in the US, which was previously seen coming in at 2.6% in 2026, will instead rise to 4.2% this year thanks in large part to the war, which has spiked prices for oil, gasoline, diesel fuel, and fertilizer.
The report also warns that these numbers could get even worse if the Iran conflict drags on and the Strait of Hormuz remains shut for a prolonged period.
"Further disruptions to trade in the Persian Gulf could also have negative effects on a broader range of products in global supply chains," OECD writes. "For example, ongoing constraints to fertilizer supply could increase global food prices, with potentially serious impacts on household finances and inflation expectations. Furthermore, reduced supply of sulphur, helium or aluminium could impede production in a range of industries."
More ominously, the report finds that "prolonged disruptions to energy supply and growth, or lower-than-expected returns from net AI investment, or rising losses in private capital markets, could all trigger more widespread risk repricing in financial markets," with the result being a higher risk of default across "multiple credit products" and an evaporation of economic liquidity.
Asa Johansson, director of policy studies at OECD, said in an interview with The Wall Street Journal that the organization's forecast is "highly uncertain" at this point because "we don’t know the breadth and the duration of this energy shock" caused by the war.
Tahra Hoops, director of economic analysis at Chamber of Progress, expressed astonishment at the Trump administration's economic mismanagement in launching the Iran war, which came at a time when polling has consistently shown that affordability is the top concern for US voters.
"Every single one of this administration's policies is doing what it can to raise prices," wrote Hoops, "for a political goal that they have yet to coherently articulate, let alone have any chance at achieving."
Phillips O'Brien, professor of strategic studies at the University of St. Andrews, argued that the OECD's inflation forecast was yet another nail in the Republican Party's chances of retaining control of Congress this year.
"It’s going to be so much fun watching the GOP run on 'affordability' in 2026," O'Brien wrote.
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Victory for Corporate Tax Dodgers as OECD Approves Watered-Down Global Minimum Tax
“The Trump administration has chosen to prioritize maintaining rock-bottom taxes for big corporations to the detriment of ordinary Americans and our allies across the globe," said one critic.
Jan 05, 2026
The Organization of Economic Cooperation and Development is facing criticism for buckling under US demands when finalizing an update to the global minimum corporate tax agreement.
As reported by Reuters on Monday, the OECD agreed to amend a 2021 deal to enforce a 15% global minimum corporate tax to include "simplifications and carve-outs to align US minimum tax laws with global standards, accommodating earlier objections raised by the Trump administration."
Under the original framework, OECD members agreed to apply a 15% corporate tax on multinational corporations that book profits in jurisdictions that have lower tax rates.
President Donald Trump objected to this, however, and insisted that some US corporations be given exemptions that have subsequently been granted by OECD states.
US Treasury Secretary Scott Bessent said that the revised deal "represents a historic victory in preserving US sovereignty and protecting American workers and businesses from extraterritorial overreach," while noting that it allowed for US-headquartered firms to be subject only to US global minimum taxes.
Some critics, though, accused the OECD of letting the US get away with robbery.
Zorka Milin, policy director at the Financial Accountability and Corporate Transparency Coalition, warned that the deal "risks nearly a decade of global progress on corporate taxation" by allowing "the largest, most profitable American companies to keep parking profits in tax havens."
“The Trump administration has chosen to prioritize maintaining rock-bottom taxes for big corporations to the detriment of ordinary Americans and our allies across the globe," Milin added.
Alex Cobham, chief executive at Tax Justice Network, said other OECD members were only hurting themselves by caving to Trump's demands.
"By the Tax Justice Network’s assessment, France for example is already losing $14 billion a year to tax cheating US firms, Germany is losing $16 billion, and the UK is losing $9 billion," Cobham explained. "Today’s bending of the knee to Trump will cost countries billions more. But how much more? Tellingly, the OECD, which has delivered this shameful result, and OECD members have not put a number on the scale of tax losses that will result."
An analysis published last month by the Institute on Taxation and Economic Policy (ITEP) made the case that global minimum corporate taxes were needed to prevent US companies from sheltering vast profits by reporting them in nations that serve as offshore tax havens.
As an example, ITEP pointed to data showing that the profits US companies reported in notorious tax havens such as Barbados and the British Virgin Islands were more than 100% of those territories' gross domestic product, which the report noted "is obviously impossible."
ITEP went on to state that full implementation of this global minimum tax is "the best hope for blocking the types of tax avoidance that have weakened corporate income taxes all over the world" by making it "difficult for any single government (even one as powerful as the US) to ignore or weaken it."
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Economist Says Fed Warning Shows Trump Driving US Economy 'Toward Disaster'
"Launching chaotic trade wars with our allies and gutting Social Security, Medicaid, and other vital programs in order to fund tax breaks for his billionaire donors isn't making life more affordable for working-class families."
Mar 19, 2025
A former Obama administration economic adviser said Wednesday that the Federal Reserve's forecast of increased unemployment, accelerating inflation, and slower growth driven by President Donald Trump's economic policies could portend a return of the "stagflation" that plagued the nation in the 1970s.
The Federal Open Markets Committee, which sets U.S. monetary policy, downgraded its economic outlook for 2025 from an initial projection of 2.1% growth to 1.7%. FOMC also revised its inflation forecast upward from 2.5% to 2.8%.
While FOMC said that "recent indicators suggest that economic activity has continued to expand at a solid pace," the committee noted that "uncertainty around the economic outlook has increased."
Fears of an economic slowdown or even a recession have increased dramatically since Trump took office and imposed tariffs on some of the nation's biggest trade partners while moving to gut critical social programs in order to fund a $4.5 trillion tax cut that will overwhelmingly benefit wealthy Americans.
"Inflation has started to move up now. We think partly in response to tariffs and there may be a delay in further progress over the course of this year," Federal Reserve Chair Jerome Powellsaid during a Wednesday news conference, at which he said interest rates will remain unchanged. "The survey data [of] both household and businesses show significant large rising uncertainty and significant concerns about downside risks."
The economic justice group Groundwork Collaborative said the FOMC projections show that "Trump is steering our economy toward disaster," while warning of the possible return of stagflation, a combination of low or negative economic growth and inflation.
Alex Jacquez, the chief of policy and advocacy at the Groundwork Collaborative and a former adviser at the White House National Economic Council during the Obama administration, said in a statement that "the Federal Reserve's projections confirm what millions of Americans are already thinking: President Trump is steering our economy toward disaster."
"Voters elected President Trump to lower the cost of living, and instead, they continue to be saddled with persistently high inflation and interest rates," Jacquez continued. "Launching chaotic trade wars with our allies and gutting Social Security, Medicaid, and other vital programs in order to fund tax breaks for his billionaire donors isn't making life more affordable for working-class families. It is, however, a perfect recipe for stagflation."
Trump's economic policies—which some observers believe could be designed to deliberately tank the economy so that the ultrawealthy can buy up assets at deep discounts—have sent consumer confidence plummeting. Meanwhile, recent polls have revealed that a majority of voters disapprove of Trump's handling of the economy and inflation.
The latest FOMC forecast came as the world braces for yet another escalation of Trump's trade war, with the president threatening to implement worldwide reciprocal tariffs starting April 2.
The Organization for Economic Cooperation and Development (OECD) said Monday that Trump's trade war is likely to slow economic growth in the United States and around the world.
"The global economy has shown some real resilience, with growth remaining steady and inflation moving downwards," OECD Secretary-General Mathias Cormann said. "However, some signs of weakness have emerged, driven by heightened policy uncertainty."
"Increasing trade restrictions will contribute to higher costs both for production and consumption," Cormann added. "It remains essential to ensure a well-functioning, rules-based international trading system and to keep markets open."
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Biden Must Act Now to End US Funds for Fossil Fuels Abroad
With an incoming Trump administration ready to bend to the will of the fossil fuel industry, the Biden administration cannot afford to miss this opportunity to secure its climate legacy.
Nov 14, 2024
The Biden administration is running out of time to fulfill its promises to stop using U.S. taxpayer dollars to finance fossil fuel projects overseas. And, as Donald Trump is about to assume the presidency, this is one of the final chances for President Joe Biden to cement his climate legacy.
On November 18, member countries of the Organization for Economic Co-operation and Development (OECD) will meet to consider a proposal to end support from export credit agencies (ECAs) for fossil fuels. This proposal not only has the ability to change the course of the climate crisis by shifting $41 billion USD per year globally out of oil and gas, but is the final opportunity for the outgoing Biden administration to fulfill its pledges made through the Clean Energy Transition Partnership, the International Climate Finance Plan, Executive Order on the Climate Crisis, and via G7 statements in 2022 and 2024.
Since May of 2023, the U.S. Export-Import Bank (EXIM)—our country’s ECA—has approved $2.2 billion in new oil-, gas-, and coal-related projects overseas, including a $500 million loan for an oil and gas drilling project in Bahrain. Additionally, EXIM is considering financing dangerous projects like Mozambique LNG and Papua LNG. With a recent report finding that EXIM was considering financing international fossil fuel projects with lifetime emissions equivalent to roughly 80% of the annual fossil fuel carbon dioxide-equivalent output of the entire United States (or 1,300 coal-fired power plants), this proposal is a critical action President Biden can still take to reduce harmful emissions, stop EXIM from financing dangerous fossil fuel projects abroad, and follow through on his commitments.
President Biden’s reputation as our country’s most pro-climate president is on the line.
The climate crisis has reached a critical point, and it’s unconscionable to keep funneling taxpayer dollars into reckless fossil fuel projects overseas. We are already paying the price for this ongoing investment in fossil fuels—facing record-breaking floods, devastating storms, and deadly extreme weather. The escalating severity of these climate disasters must be a wake-up call our leaders can no longer ignore: Taxpayer financing for overseas fossil fuel projects must end now. And, the support for this climate action is strong: Over 250 civil society organizations have called on OECD member states to end public oil and gas funding.
OECD member states as a whole send $41 billion annually to fossil fuel projects despite the blatant need for a swift transition to clean energy, and the Biden administration’s failure to put forward a position—despite pledging to do this numerous times—has led to deadlock and inaction. The billions of dollars per year that EXIM provides for fossil fuels could be shifted away from fossil fuels to renewable energy projects and be presented as part of a climate finance package at COP29. With the clock ticking for his administration, President Biden must agree to end public financing of foreign fossil fuels via EXIM, follow through on past commitments, and show global climate leadership at COP29 and beyond.
As one of the world’s largest emitters, the United States must use this opportunity to reach our global clean energy agreements and hold ourselves and the rest of the international community accountable for keeping goals such as 1.5°C alive. This meeting is a chance for redemption, to set a global example, and to allow the Biden administration to keep its promise from Glasgow. Taking advantage of this moment will ensure that the progress made over the past four years cannot be undone, will help reduce global emissions, and will help at home by safeguarding tax dollars and fortifying the Biden administration’s record of protecting communities from the climate crisis.
President Biden’s reputation as our country’s most pro-climate president is on the line. With an incoming Trump administration ready to bend to the will of the fossil fuel industry, the Biden administration cannot afford to miss this opportunity to commit the United States to ending taxpayer funding for fossil fuel projects abroad. This decision should not be a difficult one—and we hope that the Biden administration agrees to put communities both here and abroad and the climate over fossil fuel industry interests.
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Biden Must Stop Protecting Fossil Fuel Profits Over People and the Planet
President Biden’s approach to the climate crisis is nothing short of hypocritical. While the president’s rhetoric aligns with global climate promises, his administration has approved massive fossil fuel projects.
Jul 31, 2023
Ahead of its Climate Ambition Summit in September, the United Nations is calling on global leaders to phase out fossil fuels. U.S. President Joe Biden is painfully falling behind on this agenda and must urgently get back on track to maintain any credibility in these climate discussions.
As we suffer through extreme heat in the U.S. and across the globe, President Biden has been protecting fossil fuel profits instead of people. From the Willow Project in Alaska to Gulf LNG exports, Biden props up dangerous oil and gas projects and the corporations that value their bottom line over our future. It has to stop.
The latest reports from the International Energy Agency (IEA) and the Intergovernmental Panel on Climate Change (IPCC) show that maintaining a 50% chance of limiting global warming to 1.5°C (2.7°F) requires an immediate end to investments in new coal, oil, and gas production and hazardous liquified fossil gas (LNG) infrastructure.
Of all countries in the world, the United States is the world’s top oil and gas producer and exporter, and is planning the largest expansion in oil and gas production over the next decade.
These findings remain unchanged in the context of the war in Ukraine and its impact on global energy markets, and as last year’s World Energy Outlook said: “No one should imagine that Russia’s invasion can justify a wave of new oil and gas infrastructure in a world that wants to reach net zero emissions by 2050.”
President Biden’s approach to the climate crisis is nothing short of hypocritical. While the president’s rhetoric aligns with global climate promises, his administration has approved massive fossil fuel projects.
Of all countries in the world, the United States is the world’s top oil and gas producer and exporter, and is planning the largest expansion in oil and gas production over the next decade. This year alone, Biden approved the Willow oil project in Alaska and multiple LNG export facilities, and his administration put its support behind the Mountain Valley fracked gas pipeline, skipping important permitting processes meant to protect people and the environment, betraying communities and his voters.
President Biden has even backed policies that gut bedrock environmental laws that protect communities from fossil fuel pollution.
At the United Nations COP26 climate summit in Glasgow, President Biden joined 38 other countries and financial institutions in promising to end international public finance for fossil fuels by the end of 2022 and to instead prioritize public finance for clean energy. At the G7 leader’s summit in 2021, a near-identical commitment was adopted, bringing Japan, one of the world’s largest fossil financiers, onboard, and this year the G7 committed to report on progress by the end of 2023. If the United States followed through on its promise, they could shift $3.7 billion annually out of fossil fuels on average, increasing their international renewable energy public finance by five times.
But instead of keeping its commitment, the Biden administration continues to approve new public funding for fossil fuel expansion abroad. While Canada, the United Kingdom, and France have published policies keeping their promises to stop international funding for fossil fuels, the United States has refused to publish a policy.
In May, the Biden administration approved almost $100 million in export finance for expanding an Indonesian oil refinery, neglecting the agreed end of 2022 deadline for ending such support. Just a month ago, the U.S. development finance corporation (DFC) pledged half a billion dollars to support LNG imports in Poland and gas infrastructure in South Africa. Most recently in July, the Export-Import Bank of the United States (EXIM)—the official export credit agency of the U.S.—insured $400 million in revolving credit facilities for global commodities trader Trafigura, allowing them to purchase LNG from U.S. exporters to sell primarily to European buyers. And more is on the docket—the United States is currently considering export finance for a controversial LNG project in Papua New Guinea.
Voters will not ignore Biden’s disastrous climate track record unless he starts keeping his climate promises and paves the way for a cleaner, safer, and more equitable future with cheaper energy bills and good jobs.
The U.S. breaking its promise is particularly unhelpful now that a huge diplomatic opportunity is opening up to advance oil and gas export finance restrictions at the Organisation for Economic Co-operation and Development (OECD).
More than half of OECD countries, including the United States, signed onto the COP26 commitment to end international public finance for fossil fuels, creating strong foundations for a progressive member to table a proposal for oil and gas restrictions and kick off negotiations on the topic. This is an urgent matter. OECD members still provide $41 billion annually in export support to fossil fuel projects, five times their clean energy support.
Ironically, the United States was the country championing efforts to secure OECD coal finance restrictions back in 2015. Now it risks being an obstacle rather than a leader at the OECD.
At a time when we must rapidly and equitably phase out fossil fuels, it is alarming to see Biden consistently breaking their climate commitments and pushing for the global expansion of LNG and oil, as well as holding back progress at the UNSG Climate Ambition Summit and the OECD. Every new fossil fuel project is incompatible with a liveable future.
As the world’s biggest historic polluter, the United States has a responsibility to lead a global just transition away from fossil fuels. Biden can make the choice to lead this moment and succeed. Voters will not ignore Biden’s disastrous climate track record unless he starts keeping his climate promises and paves the way for a cleaner, safer, and more equitable future with cheaper energy bills and good jobs.
We call on President Biden to fulfill his duty to the American people, the international community, and communities whose lives and well-being are impacted by the dirty fossil fuel projects he has been backing. On Sunday, September 17 people will be marching through New York City with these demands at the UNSG Climate Ambition Summit. It’s time for Biden to listen to our voices and end the era of fossil fuels.
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Wages Are Down 4% in Rich Nations as 'AI Revolution' Looms: OECD
Worker pay, already failing to keep pace with cost-of-living increases, is at risk of being further suppressed as artificial intelligence and other technologies threaten to automate 27% of existing jobs in wealthy countries.
Jul 11, 2023
As corporate profits soar, the real income of workers in 38 wealthy countries has fallen by an average of nearly 4% over the past year, and the situation could deteriorate further as artificial intelligence and other forms of technology threaten to automate 27% of existing jobs in the same nations.
That's according to the Organization for Economic Cooperation and Development's (OECD) latest annual employment outlook, published Tuesday, which stresses the "urgent need to act."
"OECD countries may be on the brink of an AI revolution."
One of the report's key findings is that in most high-income countries, labor markets have "stabilized" since the Covid-19 pandemic unleashed economic chaos more than three years ago. The OECD unemployment rate was 4.8% in May 2023, compared with 5.3% in December 2019. However, joblessness varies widely among the club's members, from 12.7% in Spain to 3.6% in the United States and 2.4% in the Czech Republic.
Tight labor markets typically improve workers' bargaining power, yielding wage gains. But despite historically low unemployment rates in many OECD countries, the report finds that real wages across the bloc declined 3.8% between the first quarter of 2022 and the first quarter of 2023.
Nominal wages increased 5.6% from Q1 2022 to Q1 2023, but that wasn't enough to offset the ongoing cost-of-living crisis, the report indicates. As a result of high and persistent inflation—a phenomenon that many experts say is inseparable from corporate profiteering—real income decreased by as much as 15.6% in Hungary, 10.4% in the Czech Republic, and 0.7% in the United States.
Several earlier analyses have shown that since the Covid-19 pandemic and Russia's invasion of Ukraine disrupted international supply chains—rendered fragile by decades of neoliberal globalization—highly consolidated corporations have capitalized on myriad crises to justify price hikes that far outpace the rising costs of doing business, padding their bottom lines at the expense of working-class consumers.
The OECD's new report also acknowledges that "profits have often risen more than labor compensation."
"Going forward," the report notes, "evidence suggests there is some room for profits to absorb further wage adjustments to recover some of the losses in purchasing power gradually without generating significant price pressures or resulting in a fall in labor demand."
Workers' incomes could take additional hits due to technology-induced automation.
"While firms' adoption of AI is still relatively low, rapid progress including with generative AI (e.g. ChatGPT), falling costs, and the increasing availability of workers with AI skills suggest that OECD countries may be on the brink of an AI revolution," the report states. "It is vital to gather new and better data on AI uptake and use in the workplace, including which jobs will change, be created or disappear, and how skills needs are shifting."
"The potential for substitution remains significant, raising fears of decreasing wages and job losses."
The report estimates that 27% of existing jobs in OECD countries are at high risk of automation, from AI and other technologies. If even a fraction of those jobs are automated, it could lead to a surge in unemployment—weakening workers' bargaining power in relation to employers and setting the stage for further wage repression.
"High-skill occupations, despite being more exposed to recent progress in AI, are still at least risk of automation," says the OECD. "Low- and middle-skilled jobs are most at risk, including in construction, farming, fishing, and forestry, and to a lesser extent production and transportation."
According to the report, 63% of finance workers and 57% of manufacturing workers are worried about job loss due to AI in the next 10 years.
The OECD makes three key recommendations to policymakers:
- Support low-wage workers: Wage policies such as minimum wages and collective bargaining can help mitigate losses in purchasing power. Governments can also provide direct support through the tax and benefit system to protect low-income households' net income.
- Implement safeguards: To reap the benefits AI can bring to the workplace while addressing risks to workers' fundamental rights and well-being, countries should consider concrete policy actions to ensure the enforcement of key principles for trustworthy use of AI. Governments need to ensure that AI serves to support inclusive labor markets, rather than hinder them.
- Ensure training for AI: Increasingly rapid AI development and adoption means that new skills will be needed, while others will change or become obsolete. Training is needed for both low-skilled and older workers, but also for higher-skilled workers. Governments should encourage employers to provide more training, integrate AI skills into education, and support diversity in the AI workforce.
Stefano Scarpetta, OECD director for Employment, Labor, and Social Affairs, wrote Tuesday that "despite the renewed worries about a jobless future, the impact of AI on job levels has been limited so far."
"However," he added, "it is also clear that the potential for substitution remains significant, raising fears of decreasing wages and job losses."
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OECD Pushed Australia to Drop Plan Aimed at Showing Where Corporations Pay Taxes
"What little credibility the OECD had is now in tatters," said one campaigner. "The OECD makes promises about ending global tax abuse but was evidently doing everything it could behind closed doors to protect tax abusers."
Jul 08, 2023
The Financial Times confirmed Friday that the Organization for Economic Cooperation and Development lobbied Australia to weaken a law that would have compelled about 2,500 highly profitable multinational corporations to reveal where they pay taxes, eliciting outrage from tax justice advocates.
Citing two unnamed people familiar with the discussions, FT reported that the Paris-based club of wealthy nations "pressured Australia's ruling Labor government to drop a crucial part of a new finance bill that would have required some multinationals to publicly disclose their country-by-country tax bills."
"This shows the true colors of the OECD."
According to the newspaper, "The OECD, which has driven efforts to force the world's largest companies to pay their fair share of tax, believed the bill would have undermined its own efforts to make multinationals' affairs less opaque."
Campaigners were incredulous given that the legislation the OECD enfeebled "would have delivered the biggest transparency breakthrough to date on the taxes of multinational corporations," as the Tax Justice Network put it.
The advocacy group estimates that multinationals shift more than $1.1 trillion of profit into tax havens annually, costing the world $312 billion per year in foregone corporate tax revenue. It also calculates that at least 1 of every 4 of those lost tax dollars could be saved if corporations were required to publish country-by-country reporting data.
"The OECD yet again doing the bidding for big business, the only winners here," tweeted Nabil Ahmed, economic justice director at Oxfam America.
Ahmed's observation was shared by Isabel Ortiz, the former director of social protection at the United Nations' International Labor Organization, who said, "This shows the true colors of the OECD and who [it is] serving."
Australia's original proposal "would have exposed unprecedented details about companies' tax affairs in each country they operate," FT reported, aiding efforts to crack down on tax evasion by forcing an estimated 21% of the world's multinational corporations—including many of the biggest firms in history—to come clean about "how much of their revenues are booked in low-tax jurisdictions."
As the newspaper explained:
The bill was expected to clear the Australian parliament in June and come into force on July 1. However, the version of the bill that passed last month removed crucial disclosures, with the Australian government announcing a delay of the planned public country-by-country tax reporting regime for a year.
People close to the decision said officials from the intergovernmental body had stressed to the Australian Treasury that countries that signed the 2015 OECD agreement did so on the basis the tax reports would not become public.
"This is not a good look for the OECD," the Fair Tax Foundation wrote on social media. "Their work is by definition consensus-based and often lowest common denominator. If a country wants to push on and do something more substantial, they should applaud, not oppose."
David McNair, executive director of global policy at the anti-poverty nonprofit One, argued that "this story seriously undermines the OECD's credibility in the one area that it was leading in recent years."
"I hope it prompts some soul searching on the mission and values of the organization," he added.
"OECD has put itself firmly on the side of secrecy—on the side of tax abuse—against one of its members. That's an extraordinary state of affairs."
As FT observed, "For the past decade the OECD has spearheaded global efforts to close loopholes and restrict the use of tax havens after it was asked by the G20 in 2013 to address the growing problem of corporate tax avoidance."
"While large multinationals already report some country-by-country data to tax authorities under an international agreement brokered by the OECD in 2015, the Australian proposal would have disclosed additional new data points," the newspaper noted. "And crucially the OECD country tax reports are not shared with the public."
FT's article corroborates earlier reporting by the Center for International Corporate Tax Accountability and Research (CICTAR) and the Tax Justice Network.
Two weeks ago, immediately after the Australian government unexpectedly postponed key components of its landmark bill, both groups suggested that "lobbying against the legislation by multinational corporations and their professional enablers may have been bolstered by the OECD itself—the organization which claims to set international tax rules in order to reduce corporate tax abuse."
In the wake of FT's bombshell story, Tax Justice Network chief executive Alex Cobham said in a statement that "what little credibility the OECD had is now in tatters."
"The OECD makes promises about ending global tax abuse," said Cobham, "but was evidently doing everything it could behind closed doors to protect tax abusers."
The Australian law opposed by the OECD – which may yet be adopted despite the delay – would force one 1 in 5 multinational corporations around the world to come clean about their profits and taxes. This includes many of the world’s biggest multinational corporations... pic.twitter.com/9j3KqNPee4
— Tax Justice Network (@TaxJusticeNet) July 8, 2023
Cobham called it "genuinely shocking to see it confirmed that the OECD has lobbied its own member country against introducing a key measure to fight corporate tax abuse."
"Public country-by-country reporting, when it arrives, will increase revenues around the world to the tune of billions of dollars, by exposing the most egregious profit shifting," Cobham continued. "Investors will benefit from reduced risk in their shareholdings, and employees will benefit both from lower risk and from the chance to negotiate fairly based on a true reporting of the profits of their work. Smaller and domestic businesses will benefit from a more level playing field, instead of a system that subsidizes multinationals' tax bills by effectively granting them immunity from abuse."
"OECD has put itself firmly on the side of secrecy—on the side of tax abuse—against one of its members. That's an extraordinary state of affairs," he added. "And it couldn't send a clearer signal to countries wondering whether the OECD's proposed tax rules will help them to curb tax abuse. They won't, and countries should pursue their own alternatives while preparing for negotiations to establish a proper tax body at the United Nations instead."
Supporters of UN tax leadership have pointed to the OECD’s failure to meaningfully include most countries in its rulemaking process – a concern unlikely to be eased by news of the OECD lobbying its own member against introducing a key measure to fight corporate tax abuse.
— Tax Justice Network (@TaxJusticeNet) July 8, 2023
As economic historian Adam Tooze pointed out, the OECD strong-armed Australia's left-leaning government while being led by Mathias Cormann, a right-wing Australian who previously served as the country's finance minister.
On Saturday, Cormann said in a statement that "the OECD has a proud record of facilitating global cooperation on tax policy and administration, to help ensure globally effective measures to tackle multinational tax avoidance."
"Suggestions the OECD pressured Australia into weakening legislation to tackle such tax avoidance are false," he claimed.
Cobham criticized Cormann's response, pointing out that the OECD secretary-general goes on to admit that the body's experts "raised a number of technical issues," after which Australian lawmakers watered down their proposal.
According to Cobham, the "possible unintended consequences" brought up by OECD experts are "flat wrong." He added that "Cormann seems to have confessed that the OECD did lobby Australia to weaken their proposals to fight corporate tax abuse... and also that they used a false threat to do so—one which, as experts in their own standard, they surely knew was erroneous."
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'Completely Contradictory': OECD Slammed for Labeling Fossil-Based Technologies 'Climate-Friendly'
"As we seek solutions to mitigate climate change, we must prioritize investments that truly prioritize sustainability and justice for all, and put energy democracy at the center of the transition," said one campaigner.
Apr 04, 2023
The Organization for Economic Cooperation and Development has agreed in principle on a new list of purportedly "green or climate-friendly" projects that are set to benefit from more favorable financial terms for export support after years of closed-door negotiations.
But climate justice advocates on Tuesday denounced the club of high-income countries for including on the list several "fossil-based technologies" that generate planet-heating emissions and other "poorly defined" projects that could incentivize investments in fracked gas.
At issue is the OECD Arrangement on Officially Supported Export Credits, which governs the body's Export Credit Agencies (ECAs). Participants in the arrangement—Australia, Canada, the European Union, Japan, Korea, New Zealand, Norway, Switzerland, Türkiye, the United Kingdom, and the United States—have long debated revising the OECD's so-called Climate Change Sector Understanding, which was adopted in 2014 and determines eligibility for preferential financing.
"The OECD Export Credit Group should not be a piggy bank for the fossil fuel industry."
Under the new agreement, projects related to (1) environmentally sustainable energy production; (2) CO2 capture, storage, and transportation; (3) transmission, distribution, and storage of energy; (4) clean hydrogen and ammonia; (5) low-emissions manufacturing; (6) zero- and low-emissions transport; and (7) clean energy minerals and ores will qualify for longer repayment terms and other flexibilities.
In response, Nina Pušić of Oil Change International (OCI) said in a statement that "the new scope of 'green' incentives under the OECD Arrangement is completely contradictory to what we know is needed to keep 1.5°C within reach."
The Intergovernmental Panel on Climate Change and the International Energy Agency have stated unequivocally that expanding fossil fuel supply is incompatible with limiting global warming to 1.5°C above preindustrial levels, beyond which the planetary emergency's consequences will grow even deadlier, especially for people living in low-income nations who have contributed the least to the crisis.
"Labeling problematic technologies that extend the lifetime of fossil fuel projects, such as carbon capture and storage, ammonia, and hydrogen, as 'climate-friendly' detracts from the critical work needed to reach 100% renewable energy-based systems," said Pušić.
"Fossil-based technologies that are unproven at scale," including carbon capture and storage as well as ammonia, exacerbate greenhouse gas pollution, OCI noted. Moreover, the OECD's use of "vague, undefined terminology" such as "environmentally sustainable energy production" and "clean hydrogen" could open the door to bolstering ECA support for fracked gas, which has boomed since Russia invaded Ukraine last February.
Not only does the OECD's definition of what counts as "climate-friendly" run counter to peer-reviewed research showing the need to prohibit new fossil fuel projects and wind down existing ones, it also flies in the face of a recent joint position launched by more than 175 civil society organizations from around the world. That document outlines how the OECD Arrangement "can align with the Paris agreement warming target of 1.5°C by placing restrictions on export support for oil and gas projects and associated infrastructure."
OECD ECAs "provide more public finance to fossil fuel projects than any other type of public finance institution, including the Multilateral Development Banks (MDBs)," OCI pointed out Tuesday. "From 2019-2021, G20 ECAs provided seven times as much export finance to fossil fuel projects ($33.5 billion USD) than for renewable energy ($4.7 billion USD)."
In the words of Kate DeAngelis from Friends of the Earth, "The OECD Export Credit Group should not be a piggy bank for the fossil fuel industry."
"We reject the pretense that technologies like carbon capture and storage are 'climate-friendly,' which Export Credit Agencies would have us believe," said DeAngelis. "Exporting credit agencies supporting these technologies extends a lifeline to the fossil fuel industry rather than encouraging the necessary shift toward a just energy transition."
"The willingness of governments to extend favorable public financing terms to technologies that prolong reliance on fossil fuels... undermines climate action rather than advancing it."
Steven Feit, senior attorney at the Center for International Environmental Law, said that the update to the OECD Arrangement, which is expected to take effect later this year, "fails to reflect the urgent need to end fossil finance and transition away from fossil fuels."
"The willingness of governments to extend favorable public financing terms to technologies that prolong reliance on fossil fuels, such as carbon capture, or launder fossil gas into the economy, as do most hydrogen and ammonia projects, undermines climate action rather than advancing it," said Feit. "Carbon capture, hydrogen, and ammonia are the primary avenues through which the industry seeks to legitimize itself in the wake of escalating climate catastrophe and climate action. Labeling these projects as 'green or climate friendly' perpetuates a false narrative and brings us further away from the urgent action needed today to phase out fossil fuels."
Davide Maneschi, climate justice program officer for Swedwatch, said that "it is concerning to see the inclusion of technologies such as CO2 capture and storage, hydrogen and ammonia, and energy minerals and ores as climate-friendly investments by the OECD without fully considering their implications on the environment and human rights."
"While these technologies may have the potential to reduce emissions, we cannot ignore the fact that criteria for what is considered 'clean' or 'green' are repeatedly stretched beyond any reasonable limit, and can come to be loopholes exploited to maintain the status quo," said Maneschi. "When employed wrongly, these technologies have the potential to exacerbate climate change and further perpetuate inequalities in our society."
"As we seek solutions to mitigate climate change," he added, "we must prioritize investments that truly prioritize sustainability and justice for all, and put energy democracy at the center of the transition."
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Global Coalition Urges OECD to End 'Reprehensible' Oil and Gas Export Financing
Such public funding, according to more than 175 civil society groups, is "helping prop up fossil fuel projects and infrastructure which would otherwise be too risky for the private sector to finance alone."
Feb 27, 2023
More than 175 civil society groups spanning 45 countries urged the Organization for Economic Cooperation and Development—an alliance of mostly rich nations—to end export financing for oil and gas, warning in a joint statement Monday that failure to do so would compromise global efforts to keep "a livable future within reach."
With OECD members set to convene next week in Paris to discuss climate finance and emissions targets, the civil society coalition implored negotiators to take concrete steps toward cutting off public oil and gas financing that flows through Export Credit Agencies (ECAs), institutions that the OECD oversees.
"Continued government support for long-term fossil energy development is as reprehensible as short-term fossil energy company windfall profits on the back of energy poverty," Sandrine Dixson-Declève, co-president of the Club of Rome, said Monday. "In both cases, it is the world's vulnerable communities that will continue to suffer the most."
According to the climate coalition—which also includes Oil Change International, 350 Africa, and Global Witness—ECAs "play a catalytic role in shaping our global energy systems" by helping "domestic companies limit the risk of selling goods and services in overseas markets, by providing loans, loan guarantees, and insurance."
"This finance is government-backed, and often concessional, helping prop up fossil fuel projects and infrastructure which would otherwise be too risky for the private sector to finance alone," the groups said, noting between 2019 and 2021, ECAs in wealthy G20 countries such as the United States, the United Kingdom, and Canada backed "at least $34 billion per year worth of transactions for fossil fuels, over 90% of which were for oil and gas, while providing only $4.7 billion for clean energy."
In a joint proposal released Monday, the groups detail several specific steps OECD members can take to help bring export financing into alignment with the Paris climate accord's imperiled 1.5°C warming target. The steps include imposing restrictions that:
- Target upstream (exploration, drilling, and extraction), midstream (storage, processing, and transportation) and downstream (oil or gas-fired power) oil and gas finance, ensuring no new fossil fuel infrastructure support using official export credits;
- Prohibit export credit financing for all associated oil and gas infrastructure; and
- In case of any reference to "unabated" fossil fuels, clearly define the term to avoid misuse or continued support for the entire oil and gas supply chain and power generation.
The term "unabated" has been deployed repeatedly in international climate agreements in what advocacy groups have called an attempt to evade demands for a total phase-out of fossil fuel extraction and an end to all new oil and gas projects—which scientists say is necessary to keep critical emission-reduction goals alive.
In late 2021, more than 30 countries including the U.S., the U.K., and other OECD members pledged to "end new direct public support for the international unabated fossil fuel energy sector within one year of signing this statement"—but the lack of follow-up action from signatories has raised concerns among progressive lawmakers and advocacy groups.
To the dismay of climate campaigners, the Biden administration has continued bolstering oil and gas exports by helping fossil fuel companies secure long-term contracts with overseas clients, potentially locking in more planet-warming emissions for decades to come.
According to a recent report from Friends of the Earth and Oil Change International, the U.S Export-Import Bank—a major ECA—provided $51.6 billion in funding for oil and gas projects between 2010 and 2021, and there's little indication that the Biden administration is moving to halt such financing in line with the Glasgow commitment.
"The world is waiting for the U.S. to fulfill its pledges as a leader on climate, particularly through the U.S. Export-Import Bank," Kate DeAngelis of Friends of the Earth U.S. said in a statement Monday. "Biden cannot promote a renewable energy transition at home while bankrolling fossil fuels abroad. It's time to take our global responsibility seriously and fund an equitable, renewable energy future."
Brighton Aryampa of Youth for Green Communities Uganda added that "governments all over the world should and must stop funding fossil fuels at home and abroad."
"They have power to stop banks that are financing these dirty projects, such as the dangerous [East African Crude Oil Pipeline Project] in Uganda and Tanzania," said Aryampa. "The banks together with oil companies should look at supporting Uganda, Tanzania, and Africa at large to be leaders of the 21st-century transition to clean renewable energy while promoting green economic activities if they want to invest in Africa."
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