B64m aid boost for fireworks blast victims

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Total of B107 million now available to help rebuild damaged community in Narathiwat

PUBLISHED : 11 Aug 2023 at 18:15

B64m aid boost for fireworks blast victims
An aerial view shows the buildings damaged by the fireworks explosion that killed 12 people and injured dozens in Sungai Kolok district of Narathiwat on July 29. (Photo: Border Patrol Police Unit 4414)

The prime minister has approved an additional allocation of 64 million baht to help victims of the fireworks warehouse explosion last month in Narathiwat, a spokesman said on Friday.

The latest grant brings the total awarded to the victims of the July 29 incident to 107 million baht, said Anucha Nakhasai, Minister Attached to the Prime Minister’s Office who chaired a meeting of disaster relief fund board.

The funds will be spent on rebuilding or repairing victims’ houses as well as on providing other necessary aid, he said.

Caretaker Prime Minister Prayut Chan-o-cha last week visited the stricken community in Sungai Kolok district of Narathiwat and assured residents that financial support was being expedited. He also asked his office to consider whether to grant additional funds.

The blast killed 12 people and injured 389, while three schools were destroyed and 682 houses damaged.

Sompong Nakul, 42, and his wife Piyanuch Puengwirawat, 42, the owners of the illegal warehouse, surrendered to police after returning from Malaysia last Saturday.

The couple were initially charged with negligence causing deaths, importing and/or selling fireworks without a permit and violating the Emergency Decree in the southern region.

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SINGAPORE: Public Transport Council (PTC) chief executive Tan Kim Hong will step down on Mar 1, 2024 after about seven years at the helm.

Deputy group director of policy and planning at the Land Transport Authority (LTA) Leow Yew Chin will be appointed as chief executive (designate) of PTC from Sep 1, before taking over from Mr Tan on Mar 1 next year, the Ministry of Transport (MOT) said on Friday (Aug 11).

The PTC regulates public transport fares and ticket payment services, as well as advises the Minister for Transport on public transport matters.

Mr Tan was appointed chief executive of PTC on Jul 1, 2017. During his time, he oversaw six fare review exercises and a mid-term review on the Network Capacity Factor, where he sought to balance the need to ensure fare affordability and the financial sustainability of Singapore’s public transport system.

He also played an instrumental role in the recent review of the fare adjustment formula and mechanism.

“Mr Tan also led PTC to grow the Caring SG Commuters Movement and supported the Caring SG Commuters Committee to drive the transformation of Singapore’s public transport system into a more caring, welcoming and inclusive one,” MOT said.

Under his leadership, PTC further collaborated with the community and industry stakeholders to launch CARE Ride @ South West 2022 and CARE Bus with Cerebral Palsy Alliance Singapore School.

“These initiatives aim to build greater empathy and willingness in commuters to help seniors and persons with disabilities in using the public transport system,” MOT said.

It thanked Mr Tan for his contributions as PTC chief executive.

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Private sector plays key role in Indonesia’s pursuit of sustainable agriculture, food security

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The produce the firm purchases from farmers is processed at its facilities in West Java, after which it is sold to clients within the country, as well as exported to Singapore, Pakistan and Bangladesh.

The company has multiple greenhouses and several research farms.

RESEARCH A CRUCIAL FACTOR

Research and development (R&D) is crucial in determining agriculture productivity and affects food prices.

Muhammad Ifdhol Syawkoni, the hydroponic R&D manager at Beleaf Farms, told CNA that even details such as how many holes there are in each hydroponic system, have to be carefully researched.

“It can’t be, ‘Oh, there are a lot of holes on this, let’s use all’, because the standard is that this is the medium where the roots grow. If the medium is too small, it will be washed away by water in the production area. If it’s too big, we’ll incur too much cost,” he explained.

Beleaf Farms has secured nearly 40 partner farmers so far, but getting them on board in the first place is not always easy.

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Coroner returns suicide verdict over police NSF who shot himself

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SINGAPORE: A coroner’s court on Friday (Aug 11) ruled the death of a full-time police national serviceman a suicide.

Mr Finnegan Tan Yao Jie, 21, was found dead of a gunshot wound in a toilet at the Special Operations Command (SOC) base on Aug 30, 2021.

Based on the gunshot residue on his hand and face, State Coroner Adam Nakhoda concluded that Mr Tan had fired the service revolver, which he had drawn from the armoury that morning.

The coroner found that there was sufficient evidence in his internet searches and social media posts to conclude that Mr Tan had formed the intention to take his own life.

The day before the incident, Mr Tan had written a will distributing his cash and belongings to his relatives and friends.

He also lamented that he had “messed up his life”.

The coroner said the exact reasons that Mr Tan chose to take his own life may never be known, but it was clear that he was struggling with certain issues.

The loss of S$10,200 (US$7,557) in an e-commerce job scam was likely the tipping point that drove him to contemplate suicide, said the coroner.

Of this amount, Mr Tan had borrowed S$7,000 from his father. The job scam ran on the ruse that he would earn more dividends if he put in more money, and Mr Tan lodged a police report over it.

“Unfortunately except for a few hints to friends, colleagues and relatives, Mr Tan kept his suicidal thoughts very well-hidden,” the coroner said.

He conveyed his sincere condolences to Mr Tan’s family for their loss. 

Where to get help:

Samaritans of Singapore Hotline: 1767

Institute of Mental Health’s Helpline: 6389 2222

Singapore Association for Mental Health Helpline: 1800 283 7019

You can also find a list of international helplines here. If someone you know is at immediate risk, call 24-hour emergency medical services.

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Pheu Thai to revive ‘digital wallet’

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Party sees 10,000-baht handout for millions as a key to economic upturn

PUBLISHED : 11 Aug 2023 at 17:04

Pheu Thai to revive ‘digital wallet’
Srettha Thavisin, a Pheu Thai prime ministerial candidate, announces the party’s 10,000-baht digital wallet policy at an election campaign rally in Nonthaburi on April 5. (Photo: Pattarapong Chatpattarasill)

The Pheu Thai Party intends to reintroduce its 10,000-baht digital wallet programme once the government it is forming takes office, says deputy secretary-general Paopoom Rojanasakul.

The party shelved the policy after finishing second in the May 14 election, as the social welfare policies of the election-winning Move Forward Party were given priority when the latter was attempting to put together a coalition government.

“Now the situation has changed and Pheu Thai is now the core (of a new coalition),” Mr Paopoom said on Friday. “Today, the party would like to officially declare that it will move ahead with the digital wallet policy, using blockchain technology.

The policy involves a 10,000-baht digital handout to every Thai aged 16 and over, delivered to a smartphone. The digital money can only be spent within a four-kilometre radius of recipients’ homes and is valid for six months.

“There would be no problems for those without access to this application as they could use their national ID card to get a personal code instead,” Mr Paopoom said.

Thailand would be among the very first countries to introduce this form of digital payment, he said.

Responding to criticism from some economists who believe the policy would cause inflation, Mr Paopoom said the Pheu Thai economic team had carefully evaluated the programme and believed there would be no negative effects on the country’s financial security. It would instead spur major economic growth, he said.

In parallel with the digital handout, a capital market and securities exchange commission for digital assets would be set up, he added.

“That is to say, we will go ahead with the digital wallet scheme and make it fully operational for the benefit of the country,” he said.

Srettha Thavisin, who is expected to be nominated as the party’s prime ministerial candidate, declared during the election campaign that the 10,000-baht handout would unleash an “economic tsunami” of consumption, delivering benefits to many sectors of the economy.

He defended the cost of the policy, which the party has put at 560 billion baht, saying it was on par with the promises of other parties that were pledging to raise social welfare payments by other means.

The Thai Chamber of Commerce has predicted a GDP boost of 2.5% or more from the fund infusion. It suggested that the digital wallet rollout should start with low-income earners. It could then be expanded to entrepreneurs and small business operators on condition that they are registered in the tax system.

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Eris variant’s spread shows Covid not dead yet

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EG.5 is a family of Omicron variants (descended from XBB.1.9.2) that first appeared back in February 2023.

The World Health Organization (WHO) classified it as a “variant under monitoring” on July 19 after a surge in Covid infections from early July. It has been increasingly reported across the globe, particularly in Asia.

On August 9 2023, it was upgraded to a “variant of interest.” This follows the rise of a particular variant, EG.5.1, known as Eris. But it has not been classified a “variant of concern.”

Eris has seen EG.5 jump from 7.6% of all SARS-CoV-2 genetically sequenced globally in late June, to 17.4% in the week of July 17-23.

Eris has edged out other Omicron variants circulating in the United States, and now makes up the largest proportion of Covid cases there.

But while it has been in Australia since April, cases have remained sporadic.

Is Eris different to other variants?

At this stage, there is no evidence EG.5.1 causes more severe disease than other Omicron variants, and it seems to cause similar symptoms.

How this virus enters cells and tissues in our body is also similar to XBB.1.5 (sometimes referred to as Kraken) and other Omicron variants.

While the severity of the illness it causes will need to be documented carefully, there are no indications it’s different from XBB.1.5.

The virus has changed, incrementally, making EG.5.1 more transmissible. While this enables it to compete with other circulating variants, it’s unclear if or when Eris will out-compete other variants in Australia.

What variants is the WHO watching?

The WHO defines a variant of interest as one that has genetic changes that could increase its transmissibility, virulence, its ability to evade vaccines, be treated with drugs or detected via current testing methods – as well as already demonstrating a “growth advantage” over other circulating variants.

The current variant of interest list also includes two other Omicron cousins – XBB 1.5 and XBB 1.16 (the latter sometimes referred to as Arcturus). Both have been circulating in Australia since the start of the year.

Yet, another XBB variant that has been around since February and dominated over our autumn-winter peak in Australia, XBB 1.9, has remained on the WHO’s lesser “variants under monitoring” list.

This shows a variant’s transmission advantage in a particular region depends on a range of factors, including waning immunity given the time lag since the last wave, vaccine booster timing, and coming into cooler weather.

How closely related the new variant is to the variants already circulating in the population is another key factor. The more different it is, the less likely it is our immune system to will recognize it quickly and be able to fight off infection.

Will vaccines protect against it?

Vaccination
Current vaccines still offer protection. Photo: Unsplash / CDC

EG.5.1 has two important additional mutations that XBB.1.9.2 does not have: F456L and Q52H, whereas EG.5 only has F456L. The extra small change in EG.5.1, the Q52H mutation in the spike protein, is enough to give EG.5.1 an edge over EG.5 in transmissibility.

The good news is the bivalent vaccine antibody responses to EG.5.1 are similar to those for variants that dominated earlier in the year in Australia.

In research yet to be published (and peer reviewed) from my team at the Kirby Institute, we isolated and characterised EG.5.1 and compared it with other circulating variants in Australia. We found that while the antibody response wanes the longer it has been since the last vaccine dose or infection, this is not at levels significantly different to XBB.1.5.

Importantly, bivalent vaccine doses, such as Moderna’s BA.1 bivalent booster, generate a five-fold increase in antibodies that protect against variants in circulation, including EG.5.1.

Will Eris prompt a rise in COVID cases?

EG.5.1 has been in Australia since April and it’s still only appearing sporadically. By August 7 2023, there had been 158 known cases reported via whole genome sequencing across Australia, representing 2.1% of reported variants.

Encouragingly, Australia’s overall infection rates continue to decline, as do hospitalisations and Covid-related deaths, antiviral scripts, and reports of cases in aged care.

While Australia may simply be lagging behind the US, we may see a different pattern entirely.

India first saw this variant back in May, but it has also seen only sporadic cases, and no major rise in overall infections. Like Australia, it is the XBB family of Omicron variant that continue to dominate in India, accounting for 90-92% of infections.

Given the ancestral variant for EG.5.1 is XBB 1.9, which was our dominant variant over winter, it’s also possible we might have better population level immunity than countries like the US. As we start to emerge from our winter, with boosted natural immunity and booster vaccination, we may be less likely to see this EG.5.1 muscle out other variants.

However, as our immunity wanes, with greater distance since our last wave, we will inevitably see infection rates start to push up again – potentially in late spring. EG.5.1 might drive this, or it could be another variant currently circulating.

Covid is becoming less of a threat but still needs watching

It’s reassuring that the intervals between Covid waves in Australia are increasing and the heights of the peaks are diminishing with each successive wave since Omicron arrived.

The number of Australian COVID-positive patients admitted to ICU over the Omicron waves. Our World In Data, CC BY

It’s also heartening that emerging variants aren’t genetically that different, so our immunity, vaccines, testing and treatment are still effective in protecting us from serious illness.

Time is our ally. The more time our immune systems have to mature, the more they can respond to a range variants far better than before. Our antibodies may wane over time, but the pool that are left represent quality rather than quantity in their ability to target many variants.

The virus is changing, with Omicron variants gradually taking over from others. But we need to remain vigilant and keep minimizing infection risk where we can, and monitoring the genomic data so we’re alert to any seismic shifts and take note if a variant is classified as a variant of concern.

Catherine Bennett, Chair in Epidemiology, Deakin University and Stuart Turville, Associate Professor, Immunovirology and Pathogenesis Program, Kirby Institute, UNSW Sydney

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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Negeri Sembilan’s Felda seats no longer a fixed deposit for UMNO-led BN in state polls

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“Previously, Barisan Nasional had total support. I was formerly an UMNO leader myself. But now, that support has waned,” said the father of eight.

He added that the cost of replanting is pricey and commodity prices are not stable. Despite the debt reduction, bank interests are high and he sees no end to servicing them.

There are about eight so-called Felda seats with huge settlements for thousands of planters and their families in Malaysia’s southwest state of Negeri Sembilan.

The scheme began in the 1960s and was meant to lift rural Malays out of poverty and provide them with a stable source of income.

But today, settlers and their children complain that their welfare is not taken care of and some lament that they will always be indebted under the scheme.

Part of the debts were accumulated when the Felda farmers borrowed heavily to participate in the listing of the Felda Global Ventures in 2012.

Most of the investments resulted in losses, despite the government – led by UMNO at that time – promising good returns.

“The way I look at it, they are just helping the bank. I will die indebted. My children and their children will also be the same,” said Mr Nasir.

WOOING FELDA VOTERS

About 30 per cent of the around 800,000 registered voters in Negeri Sembilan are from the Felda community. However, almost half now live outside the settlements in major cities.

Many have switched their support to the opposition coalition Perikatan Nasional (PN).  

“Most of (the voters are from) our stronghold, our fixed deposit in Barisan Nasional before. But lately, some of these Felda areas have been influenced by the opposition party,” said Mr Jalaluddin Alias, BN’s Negeri Sembilan chief.

“Now, we try our level best to serve them, to make sure that every settler, whether it is the first generation, second or third generation … are all under the government’s radar.”

In a recent bid to garner the support of rural Malays, Prime Minister Anwar’s administration claimed to have helped write off US$1.8 billion worth of debts held by Felda land settlers.

The opposition PN also claimed credit for the move, with the coalition’s chairman Muhyiddin Yassin insisting he had already resolved the waiver in 2021 when he was the prime minister.

“Felda voters understand how our chairman Muhyddin has helped them before. We can see that UMNO voters are now with Perikatan Nasional,” said Mr Ahmad Faizal Azumu, the deputy president of Bersatu leading the PN campaign in Negeri Sembilan.  

The politicians’ claims and counterclaims regarding who is responsible for helping the Felda settlers reflect the importance of the settlers’ votes, said observers.

CAN PH & BN HOLD ON TO POWER?

“I hope that Felda voters will come back to Barisan Nasional and also to the unity government,” said Mr Anthony Loke, secretary-general of the Democratic Action Party (DAP), one of four component parties in the ruling Pakatan Harapan (PH) coalition.

“We are just aiming to protect our own turf, to defend our own constituencies. If we can defend each of our own constituencies, then it will be a clean sweep of (all the) seats.”

Mr Loke is defending his rural state seat in Chennah, an area with predominantly Malay voters.

The unity government currently holds all 36 seats in Negeri Sembilan’s legislative assembly. PH occupies 20 seats while BN holds 16.

However, the opposition PN is claiming that chances are still 50-50 in the state, citing strong support from former-UMNO members and supporters who are angry with the party’s top leadership.

“We are serious about forming the government here, we are hoping for a 80 per cent voters turnout. Most UMNO supporters are now with us (PN),”  said Mr Ahmad Faizal.

While it is defensive play for Mr Loke as the incumbent, he is not taking it for granted and has put in huge efforts to build rapport among UMNO, BN and PH grassroots – a move which he hopes will pay off on polling day.

“I have been here for two terms for 10 years. Never before did we get the UMNO crowds to come to our programme. But today, the UMNO machinery came and we have created a lot of synergy,” he said during a campaign event that saw UMNO supporters in attendance and sharing teh tarik (milk tea) and goreng pisang (fried banana fritters) with DAP politicians.

With campaigning nearly done and dusted, analysts said a united PH and BN machinery may just be what the new alliance needs to bring out their voters in order to win Saturday’s elections.

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Tan Kin Lian launches bid for Presidential Election, stresses desire for candidate outside ‘establishment’

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SINGAPORE: Former NTUC Income chief executive Tan Kin Lian announced his bid to run for President on Friday (Aug 11), emphasising his belief in the importance of offering Singaporeans the chance to vote for what he described as an independent candidate.

And while fellow presidential hopeful George Goh is an “independent person”, Mr Tan said he decided to throw his hat into the ring following comments and his team’s advice that Mr Goh might not meet the qualifying criteria, resulting in a possible two-way contest between former GIC chief investment officer Ng Kok Song and former senior minister Tharman Shanmugaratnam.

“I believe I will be the only candidate from outside the establishment,” added Mr Tan, 75.

Speaking at a press conference where he launched his presidential campaign, Mr Tan added that he was initially prepared to “stand aside” when Mr Goh expressed interest.

“I have high respect for him, I have high respect for his enthusiasm and his team,” Mr Tan said of Mr Goh.

“We don’t want to have a contest between two candidates that are from the establishment, and it will also look very bad … because the people of Singapore will be very sceptical,” added Mr Tan.

In response to CNA’s questions about whether he will continue if Mr Goh qualifies, Mr Tan said he does not want to split the votes between non-establishment candidates.

“I will certainly want to make sure that there is only one non-establishment candidate, that we will not split the votes … How it is going to happen depends on who and whatever the circumstances are, we’ll know about (it) when the time comes,” said Mr Tan.

Mr Goh, who is the founder of Harvey Norman Ossia, had on last Friday addressed doubts about his eligibility by laying out details from his summary of submission to the Presidential Elections Committee (PEC). 

To meet the private sector service requirement to be President, an applicant must have served as the chief executive of a company for at least three years. During this time, the company must, on average, have shareholders’ equity of at least S$500 million (US$372 million) and made a profit after tax for the entire time. 

“I have a group of five companies that have a combined shareholders’ equity of S$1.521 billion over three years,” said Mr Goh, adding that this is collectively equivalent to an average shareholders’ equity of S$507 million annually for the group as a whole.

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CNA Explains: Slump and recovery – what is the current state of the Singapore economy?

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SINGAPORE: Singapore is set for tepid growth through the rest of the year, as the economy sees diverging prospects for its different sectors, economists said on Friday (Aug 11).

“The story of Singapore’s economy is really a story of two different parts,” said Oxford Economics’ senior economist Alex Holmes.

Singapore has narrowed its projection for economic growth this year, citing a weak outlook for external demand.

The growth forecast was trimmed to a range of 0.5 to 1.5 per cent, down from an earlier estimate of 0.5 to 2.5 per cent, the Ministry of Trade and Industry (MTI) said on Friday (Aug 11).

So far in 2023, Singapore’s economy has seen tepid growth. On a year-on-year basis, gross domestic product grew 0.4 per cent in the first three months before improving slightly to 0.5 per cent in the second quarter.

On a quarter-on-quarter seasonally adjusted basis, the economy eked out growth of just 0.1 per cent in the second quarter, a reversal from the 0.4 per cent contraction in the first quarter.

WHAT’S HURTING EXTERNAL DEMAND?

Singapore is a small economy that is highly dependent on external demand.

From 2015 to 2019, external demand accounted for around 67 per cent to 72 per cent of Singapore’s GDP, according to a piece published by MTI in its first-quarter economic survey in May.

Key markets include the United States and the Eurozone, but growth prospects in these economies are set to slow even more in the second half of the year when the effects of elevated interest rates take hold.

China’s growth is also expected to moderate through the rest of the year, as the post-pandemic recovery in services slows in tandem with deteriorating consumer confidence.

In addition, the ongoing global electronics downturn is “proving to be a little bit more protracted” than initially thought, MTI said.

A gradual recovery is only “expected towards the end of the year at the earliest” – a view echoed by HSBC economist Yun Liu.

“Trade headwinds are not dissipating,” said Ms Liu. “While there are some initial signs that point to stabilisation in the tech cycle, tech-heavy economies have not seen a meaningful turnaround.”

On top of that, there remains a host of uncertainties such as more persistent-than-expected inflation in the advanced economies, as well as the risk of escalation in the war in Ukraine and geopolitical tensions among major powers.

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Punitive tax plan for Western firms still in Russia

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In Russia this summer, you can still enjoy a Cornetto, but you can forget about eating a Tunnock’s tea cake or a Big Mac. This is because Cornetto’s UK-headquartered parent company, Unilever, is still operating in Russia after its invasion of Ukraine, alongside many other Western firms such as PepsiCo.

While lots of firms, including McDonald’s and the Scottish confectionery maker Tunnock’s, have cut business ties with the country since the war started, the Kiev School of Economics estimates Western companies still operating in Russia made over US$213.9 billion in revenues in 2022.

The resulting $3.5 billion in taxes on profits paid to Russia is only a small part of their contribution to the war: the income taxes and social contributions of their employees, as well as the VAT on their sales, feed into the state’s budget. The sense of normality they give to Russian citizens also arguably fosters support for the invasion of Ukraine.

Companies still doing business in Russia also hurt the citizens of the countries they come from. By essentially supporting the war, they share responsibility for higher energy prices, for example. They also increase the cost on Western taxpayers of supporting the defense of Ukraine.

Like many Western companies that have stayed in Russia, PepsiCo and Unilever (Cornetto’s parent company) have defended the decision by claiming they provide essentials and need to stay for humanitarian reasons.

In addition to detailing donations made to Ukrainian refugees, the statement from PepsiCo said the company “must stay true to the humanitarian aspect” of its business as a food and beverage company by continuing to offer “daily essentials” in Russia “such as milk and other dairy offerings, baby formula and baby food.”

PepsiCo pointed out it also continues “to support the livelihoods of our 20,000 Russian associates and the 40,000 Russian agricultural workers in our supply chain.”

Unilever said in a statement earlier this year that, while it’s still selling products in Russia, it stopped imports and exports, all media and advertising spend and other capital flows into and out of Russia in March 2022. It’s not “trying to protect or manage” its business in Russia, the company said, but “exiting is not straightforward.”

Indeed, many of those who provide non-necessary items say they cannot leave because the Russian government would seize their assets and intellectual property if they do.

But every time a business makes the choice to leave Russia or has their assets seized, the ones who stay face lower competition, and potentially make even more profit. As of today, the only price they pay for staying is a tarnished reputation in Western countries.

A tax on the cost of war

But there is a way to make foreign companies pay the cost they impose on the world, while acknowledging the impossibility of making them completely leave Russia.

In fact, Western governments have already designed the two main tools necessary. What it would take is a coalition of sanctioning countries and a mechanism that’s already being used in other regulations: the “Pillar 2” OECD strategy on taxation, due to come into force next year, as well as the EU’s new Carbon Border Adjustment Mechanism, due to come into force in October 2023.

The coalition of sanctioning countries must first implement a tax on a Western company’s Russian revenues. This is public information available in company financial reports – other organizations already track this information.

The tax would cover the company’s sales, based on the goods and services bought by people in Russia. But the tax would be collected by the country in which the company is headquartered.

Hands counting Russian notes, piles of rouble-denominated notes on the table in foreground.
Doing business in Russia. Photo: Shutterstock via The Conversation / Andrey Sayfutdinov

In the case of sales of Cornetto ice creams, for example, Unilever is the parent company and is based in the UK. So the UK government would have the first option to tax Unilever, but if it chose not to, any other country in the coalition could do so instead.

That would mean a country has nothing to gain from protecting its national businesses. If the UK does not tax Cornetto sales in Russia, Unilever could be taxed by the EU or US and the proceeds would go into their government coffers instead.

The OECD’s Pillar 2 tax agreement uses this principle in its aim to end the practice of fictionally locating profit in tax havens. By the end of this year, countries have committed to charge at least 15% in profit tax to the largest multinational companies in the EU and in the UK.

If some part of a multinational’s profits is not taxed abroad, the country in which the company is headquartered can tax extra, up to the 15% limit. And if that country does not impose the extra charge, other countries in which the firm is active can collect the unpaid tax.

What about non-Western companies?

Charging the tax on Western companies only would disadvantage them in global markets. It may also make it even more profitable for other countries to trade with Russia. To avoid such “leakage”, non-Western companies who trade with the West and continue to do business with Russia should also be made liable for the tax.

This amounts to a form of extra-territorial trade sanction. The approach is simple: if a company wants to do business with the West, it must pay a fine for any trade in Russia. The US already does something much stricter to companies trading with Iran or Cuba. French bank Société Générale paid US$1.3 billion to the US government in 2018 as a punishment for providing financial services in Cuba.

Taxing foreign companies to level competition is very similar to a border adjustment mechanism for polluting industries. This is what the EU will begin to do in 2026 under the Carbon Border Adjustment Mechanism.

It will charge a carbon tax on certain products or activities, starting with the most energy-intensive industries such as cement, iron and steel production, unless a company can prove it has already paid the equivalent at home.

Child with flowers in hair holding sign with Ukrainian flag colours that says
Photo: Shutterstock via The Conversation / Mykola Romanovskyy

Global public opinion has turned against Russia since the invasion of Ukraine. Just like with global tax evasion and climate change, most countries understand that it is in everyone’s interest that a nuclear power is not allowed to invade other countries with no consequence.

The tools the world has developed to cooperate on international taxation and carbon emissions could now be used to take definitive action on economic sanctions and make the war in Ukraine much more difficult for Russia to sustain.

Renaud Foucart is Senior Lecturer in Economics, Lancaster University Management School, Lancaster University

The writer does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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