Financial Transparency Coalition

PARIS, Sep 16 (IPS) - Illegal capital flight in the form of corrupt, criminal and illicit commercial proceeds out of developing economies could be as high as one trillion dollars a year.

A new joint briefing paper by Global Witness, Tax Justice Network, Christian Aid and Global Financial Integrity explains how illicit financial flows out of the developing world is entrenching poverty. These flows include tax evasion, abusive transfer mispricing and the proceeds of corruption. All of these illicit financial flows are facilitated by global financial opacity, both in tax havens and major financial centres. As a result of the financial crisis, which was largely created by global financial opacity, governments are now starting to tackle these issues, particularly through the G20 process. Describing a problem is not enough though: the paper...

This picture, dug out of a new report from Oxfam-France, tells it all. This is why development organisations are getting interested in the offshore system and international tax matters, at last. It is the visual counterpart of the sentence uttered by Raymond Baker of Global Financial Integrity in Washington, comparing foreign aid inflows to developing countries with the secret outflows:

"for every $1 that we have been generously handing out across the top of the table, we in the West have been taking back some $10 of...