Fantastically Corrupt: Who Should be Blamed for Illicit Financial Flows

By Pamela Bongkiyung

This article is a continuation of my London School of Economics (LSE) Africa Summit epistles. This is PART II.

This panel sought to discuss ‘Laws and illicit Financial Flows’. It was chaired by Professor Alex Cobham, Director of Research at the Tax Justice Network. Prof. Cobham has worked extensively on illicit financial flows, effective taxation for development, and inequality. Other panellists included: Prof. Leonce Ndikumana, an Economics professor at University of Massachusetts; Rev. Suzanne Membe Matale, ordained Minister of Zambia’s Africa Methodist Episcopal Church. She advocates justice and peace and believes it can transform humanity. Finally, Prof. Thomas Pogge, a Leitner Professor of Philosophy and International Affairs and founding Director of the Global Justice Program at Yale University.

The discussion was kickstarted by Prof. Ndikumana who explained that the plunder of Africa has always been legal and reckoned some 1.3 trillion US dollars was lost by the continent to capital flight in the past decade. He emphasised that it was an economic problem and most importantly a legal one too. Open Data for Tax Justice early this year advanced that developing nations lost over 200 billion US dollars to tax avoidance, tax evasion and illicit financial flows each year.

Prof. Thomas Pogge encouraged the audience to always ‘look behind the numbers’. He said Africa, Asia & Latin America kept around 30% of private wealth abroad whereas Europe was 8% and North America 2%.

Dr Carlos Lopes, Executive Secretary of the Economic Commission for Africa(UNECA), at the level of UN Under Secretary-General, who gave the opening speech for the summit added his voice to this conversation. He said that if the stolen funds lost to capital flight or stolen were returned, it would save 350,000 lives a year with increased health spending.

The issue of perception came up during this session. ‘Perception is all there is to corruption’, said Dr Lopes. According to him perception-based index is very valuable. An example used to illustrate this point was the fact that China mines the copper from Zambia but on paper the copper is bought by Switzerland. However, internationally the latter has a clean image in terms of governance and capital flow. Inadvertently, this perception shields the fact that Switzerland is a haven for stolen funds and equally procures minerals mined under poor conditions.

Rev. Suzanne Matale called on civil society to fight for social justice. She said we needed a moral, ethical, just and focused leadership in Africa. She railed that for far too long, African leaders have been pursuing a foreign/external agenda. But extending it globally, Rev Matale indicated that the Global System of Corruption has been created, sustained and maintained by the wealthy.

This poses a major challenge to eradicating illicit financial flows. This is because there is no political will as the elite are the class who benefit most from this and have links to political entities.

For closing remarks, Prof. Ndikumana emphasised that Africa remains marginalised, reason why illicit financial flows were allowed to happen. Rev. Matale called for home-grown policies to target these ills whilst Prof. Pogge brought to the fore, the importance of knowledge and unity; which though boring remain essential. He advised there was a need to understand these issues and keep up the pressure through a south-south cooperation, which could generate bargaining power.

Advertisements

2 thoughts on “Fantastically Corrupt: Who Should be Blamed for Illicit Financial Flows

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s