By Robert Kibet
NAIROBI, Jun 27 2024 – In a historic first, Kenya’s youth have mobilized in large-scale protests to demand that the political establishment listen to them. The Finance Bill 2024, which proposed new taxes across several sectors, was the catalyst for the protests, igniting outrage among a youth demographic that feels betrayed by decades of political promises. These protests, driven by economic and social grievances, escalated dramatically, culminating in clashes with police that led to numerous deaths and widespread unrest.

The streets of Kenya’s major towns and cities became battlegrounds, showcasing a remarkable display of youth agitation. Hundreds of demonstrators faced illegal arrests and detentions, with many others sustaining injuries in the chaos. 

Amidst these tumultuous scenes that gripped Kenya, young female protesters emerged as a force to be reckoned with, standing shoulder to shoulder with their male counterparts in defiance of punitive tax measures. Their presence in the chaotic protests was not just significant; it was transformative, as they marched fearlessly into the fray, determined to have their voices heard.

Wanjiku Stephens, donning a luminous green raincoat, became an emblem of bravery as she marched towards a police water cannon. Her act of standing in solidarity with a fellow protester shocked many.

“I was somewhere behind when I saw a young guy hit by the water cannon. A young and energetic guy who not only believed in himself but in the people. That is when I said I have to speak up as a woman,” she recounted, her voice tinged with a mix of fear and resolve. Wanjiku couldn’t pinpoint where her courage came from, only that she found herself on the frontlines, unwavering.

Shakira Wafula boldly confronted the anti-riot police, mirroring Wanjiku’s spirit.

“I am here for Kenya, for my people. I am here for your rights. Push me,” she declared defiantly, clad in black, raising her fist up and holding a Kenyan flag.

Shakira’s frustration was palpable as she described her encounter. “The police tried to control how I was moving. This raised my pressure,” she explained.

Wanjiku also highlighted the specific grievances of women regarding the Finance Bill. “If you look closely at the Finance Bill, a lot of things are affecting us as women. From sanitary towels to anything involving the household, which is the woman’s responsibility,” she pointed out.

“In other countries, sanitary products are free, so why not in Kenya? Why are we being charged for having periods, something we didn’t choose?” she asks.

An anti-riot police officer escorts an arrested female protester outside the Kenya Supreme Court in Nairobi during the demonstrations. Credit: Robert Kibet/IPS

The current government claimed that the previous administration had borrowed heavily from foreign governments, so the Finance Bill sought to increase and introduce new taxes to pay off this debt while simultaneously making Kenya less reliant on foreign debt. This was to bridge the debt gap and also raise revenue to finance the government’s move to subsidize agriculture inputs. The taxes on basic necessities, such as bread and sanitary towels, infuriated the youth and Kenyans.

Unlike previous demonstrations marked by stones and crude weapons, these Gen Z protesters opted for peaceful chants, documenting their protests on their phones and even live-streaming to reach a wider audience. Their approach was a testament to a new wave of activism, one that harnessed technology and peaceful resistance to amplify their message.

As these relentless women took their stand, they not only fought against economic injustice but also redefined the role of women in Kenya’s fight for a fair and just society. Their courage and determination became a powerful symbol of the youth uprising, inspiring countless others to join the cause.

The proposed Finance Bill is seen by many as a burden on ordinary Kenyans, deepening their financial struggles, while expanding government spending. The youth, already facing high unemployment despite being educated, view this bill as a direct assault on their economic prospects. Their frustration is palpable, and their actions speak volumes about their desperation and determination.

In a bid to suppress the protests, law enforcement officers resorted to firing live ammunition, wielding batons, deploying water cannons, and using tear gas grenades. This heavy-handed approach resulted in a significant number of deaths and injuries, though the precise count remains uncertain.

According to the UN Code of Conduct for Law Enforcement Officials (1979) and the UN Basic Principles on the Use of Force and Firearms by Law Enforcement Officials (1990), only the minimum force necessary should be used for legitimate law enforcement purposes during an assembly. These international standards highlight the excessive nature of the force used against the Kenyan protesters, raising serious human rights concerns.

The anger and determination of the youth reached a peak as they occupied the parliament precincts, one of the most protected zones in the country. They managed to breach security and gain entry into the bicameral house, leading to chaotic and unprecedented scenes.

At least four protesters were shot dead as police struggled to disperse the rioters. The situation escalated further as protesters vandalized windows and set fire to the new wing of the parliament building, causing significant damage and forcing MPs and parliamentary staff to scramble for safety.

The use of live ammunition to quell the riots, along with reports of arbitrary arrests and the intimidation of activists, has drawn sharp criticism from lawyers and human rights groups. They argue that such measures are not only excessive but also violate the fundamental rights of the protesters.

As the dust begins to settle, the broader implications of these protests for Kenyan society and politics become clearer. The targeting of businesses perceived to be aligned with politicians supporting the Finance Bill underscores the deep-seated frustration and mistrust among the youth. The potential for future unrest looms large as the young generation continues to demand justice and economic fairness.

In a surprising turn of events, Ruto succumbed to mounting pressure from Gen Z, millennials, and the public, leading him to make an unprecedented decision. The president announced the withdrawal of the contentious 2024 Finance Bill, a move that the protesters, who flocked to the streets in record numbers, had fiercely demanded.

A police vehicle set on fire by angry protesters as they sought entry into the national parliament in Nairobi. Credit: Robert Kibet/IPS

“Listening keenly to the people of Kenya who have said loudly that they want nothing to do with this Finance Bill for 2024, I concede. Therefore, I will not sign the 2024 Finance Bill, and it shall subsequently be withdrawn. I have agreed with these members that this becomes our collective position,” Ruto declared in a nationally televised address on Wednesday.

The UN Secretary-General expressed his concerns over the violence in Kenya connected to protests and street demonstrations.

However, this decision sparked a debate on its legality. Rarieda Legislator Paul Otiende Amolo, who played a key role in crafting the 2010 constitution, pointed out that the president cannot unilaterally withdraw a bill since he is not a member of parliament.

“To constitutionally nuance this, the legal way is for the president to register reservations on all aspects of the bill, including the title, then send the bill back to parliament within seven days. Parliament then votes to adopt each reservation, effectively nullifying the bill,” explained lawyer Waiko Wanyoike.

In a statement, António Guterres expressed his sadness over the reports of deaths and injuries, including those of journalists and medical personnel.

He also said he was concerned about reported cases of targeted arbitrary detentions. Guterres said he underscored the need to uphold the right to demonstrate peacefully and urged the Kenyan authorities to exercise restraint.  He conveyed condolences to the bereaved families and wished those injured a speedy recovery.

Human rights advocates quickly weighed in on the matter. Wangeci Grace Kahuria is the Executive Director of Independent Medical Legal Unit (IMLU) and convener of the Police Reforms Working Group.

“It’s not the protesters who are treasonous but the president’s acts. According to Article 241/2/c of the constitution, which requires the National Assembly’s approval but never did, the Kenya Defense Forces (KDF) deployment was illegal and made the killings worse,” according to Kahuria.

Joshua Changwony, Executive Director of Constitution and Reform Education Consortium (CRECO), noted the widespread nature of the protests, emphasizing that 67 towns across the country participated, making it a national movement rather than a localized Nairobi issue.

Speaking to IPS on the phone, legal expert Willis Otieno commented on the political implications, stating, “Parliament, as it were, already stands impeached in the eyes of the people of Kenya. This is a response to the people exercising their Article 1 right to the constitution by demanding a rejection rather than withdrawal.”

He argued that the people had effectively ‘impeached’ parliament, rendering it powerless in this context. The Finance Bill is revenue-raising legislation, which means the amendments made last year will remain in effect. This forces the government to return to the drawing board and reduce the budget.”

For Otieno, the two press conferences done by the president and his deputy in different locations confirm that “we do not have a functioning government.”

“The legislators refused to listen to the people who gave them their views. The same legislators clapped when the president withdrew the bill, yet they are the ones who passed it,” remarked Otieno.

Deputy President Gachagua blamed the National Intelligence Service (NIS), yet the people did not elect the security spy agency.

“They should not play blame games and must take ultimate responsibility. The president and his deputy owe Kenyans one duty: to vacate their offices and resign because, by their admission, they are shirking responsibilities to others whom the people of Kenya did not elect,” reiterates Otieno.

As Kenya navigates this critical juncture, the voice of its youth continues to echo through the corridors of power, signaling a profound shift in the nation’s political landscape. The collective action of a generation has not only forced a significant policy reversal but has also sparked a broader conversation about accountability, governance, and the power of the people.

IPS UN Bureau Report

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By Humberto Márquez
CARACAS, Jun 27 2024 – A global agreement could levy a small tax on the world’s 3,000 richest people, with fortunes in excess of US$ 1 billion, and use the money to fight world hunger, a study by the Brazilian government and the European Union’s Tax Observatory has shown.

The richest “are paying less than other socio-economic groups. This is a simple proposal, to make them pay at least two per cent per year of their wealth or income, and thus raise between US$ 200 billion and 250 billion each year,” said Gabriel Zucman, the French economist who led and presented the study.

If the tax were extended to owners of fortunes of more than US$ 100 million, an additional US$ 100 billion to 150 billion could be raised, said Zucman, director of the Tax Observatory and professor of economics at the Ecole Normale Supérieure in Paris and the University of California at Berkeley, in the United States.

The proposal and the study are driven by Brazil’s president, the moderate leftist Luis Inácio Lula da Silva, the current president of the Group of 20 (G20), who will present it for debate at the summit of this club of the world’s main industrial and emerging economies, late this year in Rio de Janeiro.

For Lula, “it is time for the super-rich to pay their fair share of taxes”, and to direct those resources towards combating hunger and poverty in developing countries, he said this month at meetings of the Group of 7 – Western powers – and the International Labour Organisation.

Lula commissioned Zucman’s team to prepare the technical study, “A blueprint for a coordinated minimum effective taxation standard for ultra-high net worth individuals”, which the economist presented online on 25 June, followed by a chat with a small group of journalists, including IPS.”It is a choice between opacity and transparency. Tax evasion is not a law of nature”: Gabriel Zucman.

“It is essential to ensure that everyone pays their fair share of taxes”, said Brazil’s finance minister, Fernando Haddad, following Zucman’s presentation. “The Brazilian presidency of the G20 has put international tax cooperation at the top of the agenda of the group’s financial track”, he added.

Susana Ruiz, head of tax policy at Oxfam International, the global anti-poverty coalition, said: “We welcome the Zucman report, which offers a critical contribution toward fixing a system that allows the ultra-rich to avoid taxes and not only accumulate and protect astronomical amounts of wealth and income ―but also hide it from governments.”

“Taxing the ultra-rich properly could raise billions of dollars for governments to combat inequality and tackle the climate crisis,” said Ruiz.

When he hosted the president of Benin, Patrice Talon, in May, Lula argued that “if the world’s 3,000 billionaires paid a 2 per cent tax on the earnings of their wealth, we could generate resources to feed the 340 million people in Africa who are facing extreme food insecurity.”

However, the report – and Zucman’s presentation – have not addressed the destination of the resources to be raised: “I can’t say how the money will be used. The distribution has to be decided by the people with their deliberations and democratic vote,” he said.

Economist Gabriel Zucman, of the European Union’s Tax Observatory, during the presentation of the study, that claims a two per cent tax on the world’s largest fortunes would raise US$ 250 billion per year, which was seen in many capitals online. Credit: Humberto Márquez/IPS

The very rich pay very little

Zucman argued that “billionaires and the companies they own have been the main beneficiaries of globalisation. This raises the question of whether contemporary tax systems manage to distribute these earnings adequately or, on the contrary, contribute to concentrating them in a few hands.”

In almost four decades – from 1987 to 2024 – the wealth of the very rich, 0.0001 per cent of the population, grew at an average 7.1 per cent per year and captured 14 per cent of the global gross domestic product, while the average wealth per adult increased by no more than 3.2 per cent.

On average, billionaires pay an effective tax rate of just 0.3 per cent of their wealth, less than other socio-economic groups.

This is largely because they own conglomerates of companies or publicly traded shares, and through these mechanisms they report, for example, lower annual taxable income than their actual wealth.

Zucman said his proposal “is very simple: that they pay 2 per cent of their wealth or income (a combination of income and wealth taxes) and thus equalise with other socio-economic groups.”

Publications such as Forbes constantly feature the world’s wealthiest individuals, all of them men, including tech start-up tycoons. A new era of transparency about their tax contributions must be ushered in, say the promoters of a new combined income and wealth tax: Credit: Valora Analitik

How to do it?

The key, Zucman explains, is to define a minimum market value that is difficult for billionaires to manipulate, “and that can now be done with the thousands of tax analysts around the world, as banking secrecy is lifted and with greater coordination between countries.”

An example of this coordination is the well-known Pillar 2 of the OECD (Organisation for Economic Cooperation and Development), which in 2021 proposed taxing at least 15 per cent of the income of transnational firms in industrialised nations, “something that did not seem possible 10 years ago”, he adds.

The basis of the new tax would be to estimate the presumed profit along with the wealth in stock and company shares. “There are also the planes, yachts, Picassos, but that is a very small part of global wealth,” according to the expert.

He admitted that billionaires might move to countries that do not levy them with the new taxes, but the state where they have their property and original sources of income can continue to tax their wealth even while abroad.

“I think this taxation mobility tends to be exaggerated in public debates,” said Zucman.

Ideally, he said, “the standard should progress as more countries join”, and a new form of cooperation between countries should be established, respecting each other’s sovereignty. “There is no need for a new international treaty,” he said.

A recent survey among G20 countries by the French firm Ipsos showed that 67 per cent of adults think there is too much economic inequality, and 70 per cent believe the rich should pay higher taxes, according to the Tax Observatory.

Support for a wealth tax on the rich is highest in Indonesia (86 per cent), Turkey (78 per cent), the UK (77 per cent) and India (74 per cent). It is lowest in Saudi Arabia and Argentina (54 per cent), but still exceeds half of respondents.

In the US, France and Germany, around two thirds of respondents support a wealth tax on the rich.

“It would be naïve to assume that all taxpayers will be in favour. But it is also a choice between opacity and transparency. Tax evasion is not a law of nature,” summarised Zucman.

Finally, he stressed that the aim of the report, which began in February, “is to launch a global policy conversation, not to end it”.

The first major global debate among the world’s leading economies will take place when G20 finance ministers meet in Rio de Janeiro on 25-26 July. But it is already clear that the road, at best, will be a long one.

By Emilio Fernandez-Corugedo, Pamela Madrid and Frank Fuentes
WASHINGTON DC, Jun 27 2024 – The Dominican Republic leads Latin America in GDP growth, with an average annual rate of around 5 percent per year since the 1970s. The Caribbean nation has made great strides in reducing poverty and improving living standards.

Reaching investment grade on its sovereign bonds would further accelerate progress by lowering interest rates, increasing capital flows, and broadening the investor base. This would also reduce private sector financing costs and boost the economy’s growth potential.

Interest rates on public debt are high relative to peers, notably those with investment grade. High interest rates mean fewer resources for spending on infrastructure, social services, and making the economy more resilient to climate change, an important risk for the country.

Elevated public debt (or interest payments) relative to low tax revenues—known as debt affordability—is a key risk constraining its credit rating and contributing to high interest rates. That’s why reforms, especially to the tax system, will be key. A comprehensive tax reform could help the country boost revenues and earn an investment grade rating.

Revenue raising

Tax revenues are limited by costly exemptions and a high threshold before personal income taxes apply. Streamlining tax incentives and exemptions—which together amount to about 5 percent of GDP, or a third of all tax revenues—is also crucial for simplifying the tax system and reducing evasion.

Permanently raising tax revenues by at least 2 percent of GDP would allow for sustainable increases in key public investment and social spending – helping to boost productivity and private consumption while reducing inequality and poverty.

Overall, a comprehensive tax reform could raise the level of GDP by around 1 percent after 10 years and by 2 percent after 30 years (see Chart). Additional public resources from the reform would also create space in the budget to scale up public investment in infrastructure that can mitigate losses from climate events, which are sizeable for the country.

The Dominican Republic is vulnerable to climate shocks including hurricanes, storms, and floods which already cause average annual losses of around 0.5 percent of GDP to infrastructure alone. The country is also increasingly vulnerable to rising temperature and sea levels.

Climate change is expected to increase these vulnerabilities. Making public infrastructure more resilient to climate events so that their impact is 40 percent less severe could further boost GDP by around 0.5 percent after 10 years and by 1.75 percent after 30 years.

Fiscal rule

Beyond the much-needed increase in tax revenues, comprehensive fiscal reform should include the adoption of a fiscal rule imposing long-term limits on public debt that would increase certainty and help safeguard fiscal sustainability.

Recapitalizing the central bank remains a crucial step to ensure its financial autonomy. In this regard, the IMF has provided technical assistance in the design of a Fiscal Responsibility Law, which is pending approval by the lower chamber of Congress, and has supported the authorities’ efforts to draft a new central bank recapitalization law.

Electricity sector

Another critical reform is addressing the long-standing inefficiencies in the electricity sector that result in high losses, which have averaged between 1 and 2 percent of GDP per year in the last decade.

We estimate that cutting losses by half—to a level comparable to those in advanced economies—could increase GDP by 0.3 percent after 10 years as efficiency improves, costs are reduced, and blackouts are eliminated.

These improvements, along with lower non-technical losses and tariff adjustments to bring electricity prices in line with production costs, would eliminate electricity sector losses and provide further fiscal space for development needs, boosting GDP by a further 0.2 percent after 10 years and 0.75 percent after 30 years.

Considering the Dominican Republic’s potential, the challenges it currently faces and the uncertainty of the global outlook, delaying a comprehensive fiscal reform would not only be costly but also a missed opportunity on its journey towards investment grade. Undertaking these key reforms could further boost the level of GDP by around 2 and 5 percent after 10 and 30 years respectively.

Emilio Fernandez-Corugedo is a Deputy Division Chief, Pamela Madrid is a Senior Economist in the IMF’s Western Hemisphere Department and Frank Fuentes is an Advisor to the IMF Executive Director representing the Dominican Republic.

IPS UN Bureau

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By Inés M. Pousadela
MONTEVIDEO, Uruguay, Jun 27 2024 – At the height of 2024 Pride season, decades of civil society campaigning came to fruition in Thailand. With 130 votes for and only four against, on 18 June the Senate passed the Marriage Equality Bill. With a few strokes of the pen, the bill tweaked the language of the Civil and Commercial Code, replacing gendered references such as ‘man’ and ‘woman’ with gender-neutral ones such as ‘persons’ and ‘spouses’. It now goes for formal assent to King Maha Vajiralongkorn and will take effect 120 days after publication in the official bulletin.

This means equal marriage is now recognised in 37 countries. Recent progress has seen Estonia become the first post-Soviet state to join the ranks in 2023, and Greece the first majority-Orthodox Christian country to do so in early 2024. Thailand is the first country in Southeast Asia and the third in Asia, following Taiwan and Nepal, to recognise the right to marry and all associated rights for same-sex couples.

SAME-SEX MARRIAGE AROUND THE WORLD

The long road to equality

With its vibrant LGBTQI+ culture, Thailand has long been advertised as ‘an exceptional destination for gay travellers’. But things weren’t quite so good for local LGBTQI+ people, whose identities and relationships lacked legal recognition and associated rights.

Civil society worked to change that. Efforts to advance the rights of same-sex couples in Thailand date back at least as far as 2011.

The first shift came in 2012, when the government began to consider some kind of recognition for same-sex relations. In 2013 it drafted a civil partnership bill with bipartisan support, but progress stalled under the military government formed as a result of a 2014 coup.

The country remained under military rule until mid-2019, but rather than stopping, LGBTQI+ activism gained strength by connecting with the country’s youthful and outspoken movement for democracy. In 2017, a petition calling for the recognition of civil partnerships gathered over 60,000 signatures. The government responded by preparing a draft bill and holding public hearings where it received overwhelming public support. But by mid-2020, the bill – which activists criticised for not ensuring the same rights as marriage – died in parliament.

When youth-led protests for democratic change erupted in 2020, their demands included LGBTQI+ rights and led to the development of a new bill that was eventually introduced but failed to pass before parliament was dissolved ahead of a general election in May 2023.

LGBTQI+ activists also took to the courts, but received a setback. In 2021, in response to a petition filed by two LGBTQI+ people seeking to get married, the Constitutional Court ruled that the section of the Civil and Commercial Code that defined marriage as being between a man and a woman was constitutional. LGBTQI+ activists were particularly unhappy with the court’s sexist and demeaning language.

Cultural and political battles

Longstanding efforts to normalise the presence of LGBTQI+ people and shift conservative narratives produced high levels of acceptance and support for LGBTQI+ rights. Thailand ranks 44 out of 196 countries in Equaldex’s Equality Index, which rates countries according to their LGBTQI+-friendliness. But unlike most other countries, it places higher for public attitudes than for its laws.

This meant Thai LGBTQI+ activists were able to use the broadly favourable climate of opinion to pressure politicians. They turned LGBTQI+ rights into a bandwagon politicians wanted to join for political gain. As a result, some of the major parties competing in the 2023 election campaigned on pledges to push for marriage equality. This included the progressive Move Forward party, which won the most seats.

But military-appointed senators stopped Move Forward forming a government, and instead Pheu Thai Party, a populist party twice deposed in military coups, formed a coalition with military-aligned parties – not the outcome young democracy activists had hoped for. Still, the new prime minister, Srettha Thavisin, had also promised to send a bill to parliament.

He still took his time, and LGBTQI+ activists gave him the push he needed. By early September 2023, when the new government was sworn in, the Rainbow Coalition for Marriage Equality had collected over 362,000 signatures in support of marriage equality. Srettha sent the bill to parliament in November, and in December debate started on the government’s bill plus three other versions submitted by other parties and civil society.

The House of Representatives passed all four bills with an overwhelming majority, then formed a committee to merge them into one, and passed the combined bill with near unanimity. The Senate completed the process on 18 June.

What – and where – next

The Marriage Equality Bill recognises rights in relation to inheritance, adoption and healthcare decisions. But beyond these direct effects, activists expect it to have powerful indirect impacts, sending a message of acceptance and encouraging younger LGBTQI+ people to come out and lead full lives free of discrimination and violence.

Now marriage equality has been achieved, LGBTQI+ activism is turning to the next big issue – trans rights. Despite playing a prominent role in entertainment, transgender people in Thailand face steep barriers, particularly in employment. They have few legal protections against discrimination, and those that exist aren’t fully enforced. They’re unable to obtain legal documents that reflect their gender identity, and what few rights they have in this regard depend on bureaucratic discretion. To change this, LGBTQI+ activists will keep campaigning for a Gender Recognition Bill.

The significance of the change achieved in Thailand, and the further change that seems sure to come, extends far beyond the country’s borders. Most countries in the region don’t recognise same-sex marriage, and some, including Brunei, Malaysia and Myanmar, still severely criminalise same-sex relations.

Thai activists believe their success can both bring further change at home and set an example for other countries to follow. Given what they’ve achieved, they have every reason for hope.

Inés M. Pousadela is CIVICUS Senior Research Specialist, co-director and writer for CIVICUS Lens and co-author of the State of Civil Society Report.

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