Africa’s Missing Millions/Billions/Trillions
March 10th, 2011
March 10th, 2011
Earlier this week, I attended a fascinating event in parliament, called ‘Africa’s Missing Millions’.
My quibble that the title should actually be ‘billions’ didn’t deter a standing-room-only crowd gathering to hear Dev Kar from Global Financial Integrity talk about his research into the vast sums of money that flow out of poor countries on a daily basis.
Dev estimates that in 2008, $1.26 trillion in illicit money left developing countries. This is a problem that’s getting worse – with outflows rising 18% each year since 2000 – particularly in Africa, which is rising by 28% a year. Over half of the total comes from multinationals illegally shifting profits out of poor countries.
As well as the frankly shocking amounts of money being drained away, one of the most interesting insights from Dev was his take on why the international community hadn’t taken this more seriously up to now. After spending 20 years working for the IMF, he’s well placed to conclude that it has simply been seen as the fault of poor countries.
‘Capital flight’ as it’s traditionally been know has been blamed on bad economic management in the developing world – instead of being identified as a systemic failure, tacitly encouraged by rich countries and enthusiastically exploited by many multinationals.
With a greater focus on the role of tax havens around the financial crisis, and campaigns showing exactly how multinationals are shifting profits out of poor countries, the tide is starting to turn. But we’ve a way to go before world leaders fully recognise the scale of the problem, so it’s vital that we keep up the pressure.