Financial Transparency Coalition

A new report released by Leprosy Mission Ireland which criticizes the Millennium Development Goals as favoring rich countries also recognizes the importance of shutting down tax havens as a development imperative.  From the Irish Times:

MANY OF the policies adopted by the UN to end global poverty are “unrealistic and unattainable” because they advance the interests of the rich at the expense of the poor, according to a report by Leprosy Mission Ireland.

It analyses the “failures” of the millennium development goals, criticises the way target goals were selected and says they were determined by how they might look in the rich world, with “quick fixes” an important consideration.

It warns to richer countries not to take “knee-jerk” action by cutting aid, as “such action will reverse any progress made to date”.

This is all important, but even more significant is the effect that tax havens/secrecy jurisdictions play in facilitating the outflows of capital from developing countries. Indeed, as GFI demonstrated in its January 2009 report, illicit outflows from developing countries outrank foreign aid by a magnitude of 10 to 1.  The Irish Times continues:

The report says developing countries must be allowed to raise import tariffs to protect their agriculture sectors. It says tax havens must be abolished because “tax evasion represents far greater outflows from developing countries than they receive in overseas development aid”.

It’s great to see the development community begin to acknowledge this.