http://www.financialtaskforce.org/2011/12/05/illegal-ethiopian-capital-flight-skyrocketed-in-2009-to-us3-26-billion/
Illegal Ethiopian Capital Flight Skyrocketed In 2009 To US$3.26 BillionDecember
5, 2011
By Sarah Freitas <
http://www.financialtaskforce.org/author/sfreitas/>
Sarah Freitas is an Economist at Global Financial Integrity in Washington,
DC and a co-author of "Illicit Financial Flows from Developing Countries
over the Decade Ending 2009," a December 2011 report from GFI.
Illegal Ethiopian Capital Flight Skyrocketed In 2009 To US$3.26
BillionDecember
5, 2011
*A forthcoming report by Global Financial Integrity finds that Ethiopia
lost US$11.7 billion in illicit financial outflows from 2000-2009*
The report, titled *Illicit Financial Flows from Developing Countries over
the Decade Ending 2009, *shows that the vast majority of the rise in
illicit financial flows is a result of increased corruption, kickbacks, and
bribery while the remainder stems from trade mispricing.An upcoming report
by Global Financial Integrity finds that Ethiopia, which has a per-capita
GDP of just US$365, <
http://www.state.gov/r/pa/ei/bgn/2859.htm]>lost
US$11.7 billion to illicit financial outflows between 2000 and 2009. More
worrying is that the study shows Ethiopia’s losses due to illicit capital
flows are on the rise. In 2009, illicit money leaving the economy totaled
US$3.26 billion, which is double the amount in each of the two previous
years.
Ethiopia is one of the poorest countries on earth. Plagued by famine,
war, and political oppression, 38.9% of Ethiopians live in poverty, and
life expectancy in 2009 was just 58 years. In 2008, Ethiopia received US$829
million <
http://www.globalhumanitarianassistance.org/508-508.html>in
official development assistance, but this was swamped by the massive
illicit outflows. The scope of Ethiopia’s capital flight is so severe that
our conservative US$3.26 billion estimate greatly exceeds the US$2
billion <
http://www.state.gov/r/pa/ei/bgn/2859.htm>value
of Ethiopia’s total exports in 2009.
The people of Ethiopia are being bled dry. No matter how hard they try to
fight their way out of absolute destitution and poverty, they will be
swimming upstream against the current of illicit capital leakage. The
global shadow financial system happily absorbs money that corrupt public
officials, tax evaders, and abusive multi-national corporations siphon away
from the Ethiopian people.
What can be done? The first step the international community should take
is to hamper the ability of corrupt and tax-evading Ethiopians to launder
their money in the global financial system. This could be accomplished by
establishing a global system of automatic exchange of tax information.
<
http://www.financialtaskforce.org/issues/automatic-tax-information-exchange/>
In
this way, Ethiopian authorities could much more easily track the bank
accounts their tax evaders have established around the world. Furthermore,
the G20 governments could push for an end to shell companies by
calling for beneficial
owners <
http://www.financialtaskforce.org/issues/beneficial-ownership/>of
all companies, trusts and foundations to be known to government
authorities. This would make it far more difficult for the corrupt and the
criminal to hide their ill-gotten gains behind a wall of corporate secrecy.
These two measures would immediately curtail the flow of billions of
dollars leaving the country each year. And, by preventing the flow of so
much money, countless lives will benefit.
*Editorial Note: Later this month, Global Financial Integrity will release
its new report, Illicit Financial Flows from Developing Countries over the
Decade Ending 2009, measuring illicit financial flows out of 160 different
developing countries. Revealing more data from the upcoming report, Ms.
Freitas wrote last week
<
http://www.financialtaskforce.org/2011/11/30/after-years-of-leakages-syrian-capital-flight-likely-intensifying/>that
Syria lost US$23.6 billion in illicit financial outflows from
2000-2009. **Sign
up here * <
http://action.gfip.org/signup_page/updates>* to receive notices
when new GFI reports are released.*
*Image License: This photo has Some Rights Reserved
<
http://creativecommons.org/licenses/by-nc-nd/2.0/deed.en>
by A. Davey <
http://www.flickr.com/photos/adavey/2750153623/>*
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Received on Tue Dec 06 2011 - 23:26:00 EST