WASHINGON (IDN) – The Global Financial Integrity (GFI), a non-profit, research and advisory organization, has highlighted ten stark facts about Sustainable Development Goals and illicit financial flows out of developing countries.
It pointed out in a media release that the scourge that illicit financial flows (IFFs) inflict upon poverty alleviation efforts has become well known and is addressed in the Sustainable Development Goals agenda (target 16.4).
In reaction to the new global commitments, Global Financial Integrity (GFI) President Raymond Baker said “we applaud this important step to curtail the torrent of money streaming out of developing economies.”
In a document as broad and ambitious as the Sustainable Development Goals the significance of the UN’s decision to address the problem can be lost. Below are key points to keep in mind during the UNGA discussions.
■ Close to $1 trillion in illicit money flowed out of developing countries in 2012 (see p. vii).
■ Illicit financial flows exceed the total amount of official development aid and foreign direct investment flowing into developing countries in seven of the last ten years (see p.46).
■ Curtailing IFFs will provide billions of dollars in new domestic resources to aid development. Such efforts are in line with multi-lateral commitments made in the Addis Tax Initiative.
■ Global IFFs grew at an annual rate of over nine percent from 2003- 2012 (see p. vii).
■ In 2012 illicit flows from Sub-Saharan Africa were close to $70 billion (see p. 33).
■ Thirty-four poor countries had an average IFFs/GDP ratio of above 10 percent in the period 2003-2012 (see p. 30, 32 GDP column).
■ Fifty-two nations had IFFs that were greater than 10 percent of the country’s total trade volume in the 2003-2012 period (see p. 30, 32 Trade column).
■ From 2003-2012 over 77 percent of illicit flows were due to trade misinvoicing (i.e. trade fraud) which enables the evasion of hundreds of billions in taxes and/or customs duties (see p. viii).
■ Global Financial Integrity defined the term ‘Illicit Financial Flows’ (IFFs) in 2006. [IDN-InDepthNews – 24 September 2015]