globalisation = deregulation

• globalisation has led to removal of regulations around financial markets allowing for freer movement of money
• deregulation has led to countries taking advantage by setting up tax havens = low or no taxes on financial dealings e.g. Bahamas or Cayman Islands. as companies with a lot of money want to avoid high rates of tax
• IGOs have mainly accepted emergence of tax havens as part of global economic system as its a price they pay for deregulated financial markets. Governments fear forcing companies to pay tax will cause TNCs to move elsewhere, so they're taxed less
• NGOs have raised objections to tax havens as things like Oxfam who challenges poverty have called for stronger financial regulation as they believe wealthy people will become richer if they avoid paying tax, increasing global inequality and reduces the governments' income from taxes
• global inequality is growing with globalisation as its easier for people who own TNCs to make more money, in 2020 the richest 1% of global population owned 46% of the world's wealth
• Ecuador has reduced inequality by following different economic model by moving away from neoliberal economic model

  • since 2007, they've brought more socialist policies that have made society more equal as in 80s and 90s, Ecuador was very unstable and experienced economic recessions
  • 2006, Rafael Correa elected as president and believed earlier governments focused too much on making profits from oil reserves and paying debts and not the people
• Ecuador economic model (2)

  • in 2008, idea of buen vivir introduced which means good living, everyone has a good life, that does not damage the planet and the wellbeing of a community is more important than the success of an individual.
  • correa increased public spending on services and temporarily raised taxes to fund recovery from earthquake, his government also sued US based oil company for causing environmental damage in Amazon
  • Ecuador inequality decreased and poverty rates halved between 2006 and 2016, shown with the decline in the Gini coefficient, showing an overall decline from 2003