India has strongly put challenges of Global South on the table, says Mathias Cormann

India is making some very strong inroads in the development agenda, says Mathias Cormann, secretary-general at the Organisation for Economic Co-operation and Development. He terms the global tax deal as the biggest reform in more than 100 years that is seeking to cater to changes in business models and the structure of the global economy. Edited excerpts from an interview with Deepshikha Sikarwar.

The OECD in its latest economic outlook has said improvement in global growth is very fragile. What are the key risks that you see for the recovery?

First, the good news is that we project continued global growth. Growth is low by historical standards, but nevertheless, we do believe that we are firmly in the territory of continued global growth. But there are downside risks. There is the continued high level of inflation and there certainly is a risk that inflation will remain higher for longer and that more monetary policy tightening might be required with all of the consequences for the global economy. Then there is a big downside risk related to the war in Ukraine and also geopolitical tensions, more generally, fragmentation of the global economy, and so on, which is all putting pressure on the global economic outlook.


What kind of policy interventions are you advocating to countries to get out of the situation?

I think we need the world to recommit itself to a rules-based international trading system in better working order. We need well-functioning global markets. We need to recommit ourselves to structural reforms that facilitate productivity and increased business dynamism. We've got to find ways to increase workforce participation; in particular, female workforce participation needs to be increased in countries around the world. There are some very significant structural transformations underway - the green transformation and digital transformation which all have significant implications in terms of the skills we need in the future. So, there's a very important education and skills development piece that I think that countries around the world really need to very seriously tackle to make sure that people have the opportunity to participate and benefit from everything that comes with digital transformation in particular.

You presented OECD's statement on progress on global tax reforms to the G20 finance ministers. There are concerns about not much headway being made.

We had a meeting on the inclusive framework in Paris last week, where 138 countries agreed to a historic outcomes statement. There are still some aspects to be finally settled, but I think we're in a very good position and I'm quite confident that we will be able to finalise the deal. This is the biggest change in more than 100 years that really is seeking to cater to changes in business models and changes in the structure of the global economy. There's the upside in terms of making sure that businesses pay their fair share of taxes in markets in which they generate profits, but there's also the element that is very important around stabilising the international tax system. It is very important for trade and countries that trade around the world to know that there is certainty around key policy frameworks and policy settings and certainly I think that our deal will have achieved that.

India's G20 presidency has put out a very ambitious agenda. How do you see the progress?

The global context is challenging but India has very strongly put the challenges of the Global South on the table. And I think some good progress is being made in the tax space. India has put a very strong focus on support for developing countries, in terms of tax capacity building and on the whole focus on tackling tax avoidance and financial crimes. But in the development agenda more generally, I think India is really making some very strong inroads.