Ten Times ODA Lost to Illicit Financial Flows

  •  united nations
  • Inter Press Service

The U.N. Development Programme’s Special Unit for South-South Cooperation along with the UNDP Bureau of Development Policy and the U.N. Financing for Development Office hosted a Member States meeting Wednesday to discuss a joint programme entitled: ‘Curbing Illicit Financial Flows: Accelerating LDC Graduation in the Next Decade’.

'Identifying, limiting, countering and returning the proceeds of illicit flows are key development issues, especially for LDCs,' said Jomo Kwame Sundaram, UN Assistant Secretary General for Economic Development.

'Not enough has been done to curb such flows,' Sundaram said. 'Our collective inability to counter these illicit flows has stark human costs.'

The joint global initiative will address the problem of illicit financial flows and support capacity building efforts at the local and national levels through a South- South mentoring programme.

Ambassador Jean-Francis Zinsou of Benin shared his country’s experiences in combating illicit financial flows and told participants that the South-South sharing programme is timely and would be in high demand.

According to U.N. estimates the developing world loses as much as 1 trillion dollars each year through illicit financial flows - with approximately two-thirds of this loss due to tax evasion and avoidance. This amounts to 10 times the amount of Official Development Assistance (ODA) available to Least Developed Countries (LDCs).

'With just 4 years left to achieve the Millennium Development Goals (MDGs), concrete steps to prevent illicit financial flows are even more important,' said Douglas Gardner, UNDP Deputy Assistant Administrator, and Deputy Director of the Bureau for Development Policy.

'Illicit financial flows from LDCs increased from 9.7 billion dollars in 1990 to 26.3 billion in 2008,' Gardner said, stressing that, taxation on this money could have improved performance on all MDGs.

Over 40 member states participated in the meeting along with U.N. officials representing the Office of the President of the General Assembly, U.N. Office on Drugs and Crime and the U.N. Office of the High Representative for the Least Developed Countries, Landlocked Developing Countries and Small Island Developing States (UN-OHRLLS). Civil society organizations were also present.

© Inter Press Service (2011) — All Rights ReservedOriginal source: Inter Press Service