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Diplomacy, Economics

Illicit financial flows devastating developing countries, PM Imran tells UN event

It is worst for the developing countries Imran said.


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Updated: September 27, 2019

Prime Minister Imran Khan on Thursday said that while it is true that illicit financial flows adversely affect wealthy countries, such movement of ill-gotten money is “devastating the developing countries” across the world.

The premier was addressing an event called ‘High-Level Dialogue on Financing for Development’ at the United Nations in New York, on the sidelines of the 74th session of the UN General Assembly.

“I do not think people fully realise the impact it (illicit financial flows) is having in causing poverty, death and destruction in human development in the developing world,” said Prime Minister Imran, who was welcomed to the dialogue with a huge round of applause from the audience.

He said in the last decade Pakistan had a corrupt leadership which took the national debt accumulated over 60 years up by four times in the last 10 years. “Most of the money that was made out of corruption was sent outside,” the premier said, adding that the funds that could have been spent on human development in the country ended up in offshore bank accounts and western capitals.

“We have been trying our best to retrieve that money,” he said, conceding that even when his government locates properties made from illegal money by Pakistanis abroad, it faces a number of legal lacunas and difficulties in trying to bring that money back.

He called upon developed countries to do better as far as the return of illicit wealth is concerned, saying “There is a lack of political will in the rich countries because they gain from it.”

The poorer countries on the other hand do not have the resources to retrieve the laundered money, he added.

Prime Minister Imran said the aid given by the richer countries to the poor countries is “miniscule” when compared to the money stolen from the latter and taken abroad.

“I do not understand why in this day and age you have these offshore safe tax havens,” he said, wondering why rich countries continue to protect tax evaders.

He stressed upon the need to treat money laundered from poor countries to rich nations in the same way as “drug money” and terror financing “because it kills far more people”.

Addressing the same event earlier, UN Secretary General Antonio Guterres stressed upon cooperation between countries to curb corruption and the flow of illegal funds.

“Collaboration is crucial in cracking down on tax avoidance, tax evasion, corruption and illicit financial flows that deprive developing countries of tens of billions of dollars of potential resources for their development every year,” he said.

“Cooperation will also be necessary in addressing the new challenge of taxing the digital economy.”

The discussion also saw other leaders and experts stressing on the importance of clamping down on illicit financial flows.

Sneha Shah, a financial analyst with Thomson Reuters’ Refinitiv, shared alarming figures with the forum including that 86 per cent of the ill-gotten money is flowing through the global banking system.

“We are losing 1.5 trillion dollars in illicit financial flows each year and we are not winning this battle. How much we are recovering? One per cent of that wealth,” she said. “And 86pc flowing is through the banking system, so we are not winning.”



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Dawn
About the Author: Dawn is Pakistan's oldest and most widely read English-language newspaper.

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