G7 finance ministers look to rein in tech giants at French meeting

There are concerns the growing powers of big tech companies, such as Facebook, are increasingly encroaching on areas belonging to governments, like issuing currency. (AP)
Updated 17 July 2019

G7 finance ministers look to rein in tech giants at French meeting

  • Concerns that the growing powers of big tech companies are increasingly encroaching on areas belonging to governments
  • ‘These digital giants are turning into private states — states over which citizens have no control and where democracy has no place’

CHANTILLY, France: G7 finance ministers will have the growing powers of big digital firms in their sights when they meet on Wednesday outside Paris despite divisions about how best to tax them.
France wants to use its presidency of the two-day meeting in the picturesque chateau town of Chantilly north of Paris to get broad support for ensuring minimum corporate taxation.
G7 governments are concerned that decades-old international tax rules have been pushed to the limit by the emergence of Facebook and Apple, which book profits in low-tax countries regardless of the source of the underlying income.
The issue has become more vexed than ever in recent days as Paris defied US President Donald Trump last week by passing a tax on big digital firms’ revenues in France despite a threat from him to launch a probe that could lead to trade tariffs.
“France is a sovereign nation and will continue of course to decide as a sovereign nation on all taxation issues,” French Finance Minister Bruno Le Maire said at a conference at the French central bank on the eve of the G7 meeting.
“So, let’s work during the G7 ... on that key question of digital taxation because this is for us the best way to fix this issue,” Le Maire added.
Their bilateral dispute aside, France and the United States are in favor of rules ensuring minimum taxation as part of an effort among 139 countries to overhaul international tax rules.
Although a G7 agreement would set the tone for the broader push, an agreement among all of the G7 ministers on a minimum rate or range of rates is likely to prove elusive as Britain and Canada have reservations, a French Finance Ministry source said on Friday.
Common ground should be found more easily among ministers and central bankers present at the meeting on the issue of digital currencies and coins.
Facebook’s recent announcement of plans to launch a digital coin has met with a chorus from regulators, central bankers and governments insisting it must respect anti-money-laundering rules and ensure the security of transactions and user data.
But there are also deeper concerns that the growing powers of big tech companies increasingly encroach on areas belonging to governments, like issuing currency.
“These digital giants are turning into private states – states over which citizens have no control and where democracy has no place,” Le Maire said.
“We cannot let companies, which are serving private interests, gather all the attributes of sovereign states. We must act,” he added.
Off the official agenda, ministers are also due to consult on possible successors to replace Christine Lagarde at the head of the International Monetary Fund.
US Secretary of the Treasury Steven Mnuchin and some European ministers are due to meet with Bank of England Governor Mark Carney, who has been mooted as a possible candidate for the IMF job.


Saudi energy giant to invest $3bn in Bangladesh’s power sector

Updated 22 October 2019

Saudi energy giant to invest $3bn in Bangladesh’s power sector

  • Experts say deal will usher in more economic and development opportunities for the country

DHAKA: Saudi Arabia’s energy giant, ACWA power, will set up an LNG-based 3,600 MW plant in Bangladesh after an agreement was signed in Dhaka on Thursday.

The MoU was signed by ACWA Chairman Mohammed Abunayyan and officials from the Bangladesh Power Development Board (BPDB), officials told Arab News on Monday.

According to the agreement, ACWA will invest $3 billion in Bangladesh’s energy development sector, of which $2.5 billion will be used to build the power plant while the rest will be spent on an LNG terminal to facilitate fuel supply to the plant. Under the deal, ACWA will also set up a 2 MW solar power plant.

In recent months, both countries have engaged in a series of discussions for investment opportunities in Bangladesh’s industry and energy sectors. 

During the Saudi-Bangladesh investment cooperation meeting in March this year, Dhaka proposed a $35 billion investment plan to a high-powered Saudi delegation led by Majed bin Abdullah Al-Qasabi, the Saudi commerce and investment minister, and Mohammed bin Mezyed Al-Tuwaijri, the Saudi economy and planning minister.

However, officials in Dhaka said that this was the first investment deal to be signed between the two countries.

“We have just inked the MoU for building the LNG-based power plant. Now, ACWA will conduct a feasibility study regarding the location of the plant, which is expected to be completed in the next six months,” Khaled Mahmood, chairman of BPDB, told Arab News.

He added that there are several locations in Moheshkhali, Chottogram and the Mongla port area for the proposed power plant.

“We need to find a suitable location where the drift of the river will be suitable for establishing the LNG plant and we need to also consider the suitability of establishing the transmission lines,” Mahmood said.

“It will be either a JV (Joint Venture) or an IPP (Independent Power Producer) mode of investment, which is yet to be determined. But, we are expecting that in next year the investment will start coming here,” Mahmood said.

BPDB expects to complete the set-up process of the power plant within 36 to 42 months.

“We are in close contact with ACWA and focusing on the successful completion of the project within the shortest possible time,” he said.

Abunayyan said that he was optimistic about the new investment deal.

“Bangladesh has been a model for the Muslim world in economic progress. This is our beginning, and our journey and our relationship will last for a long time,” Abunayyan told a gathering after the MoU signing ceremony.

Economists and experts in Bangladesh also welcomed the ACWA investment in the energy development sector.

“This sort of huge and long-term capital investment will create a lot of employment opportunities. On the other hand, it will facilitate other trade negotiations with the Middle Eastern countries, too,” Dr. Nazneen Ahmed, senior research fellow at the Bangladesh Institute of Development Studies (BIDS), told Arab News.

She added that Bangladesh needs to weigh the pros and cons before finalizing such contracts so that the country can earn the “maximum benefits” from the investment.

“It will also expedite other big investments in Bangladesh from different countries,” she said.

Another energy economist, Dr. Asadujjaman, said that Bangladesh needs to exercise caution while conducting the feasibility study for such a huge investment.

“We need to address the environmental aspects, opportunity costs and other economic perspectives while working with this type of big investment. Considering the present situation, the country also needs to focus on producing more solar energy,” Dr. Asadujjaman told Arab News.