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Views from the Center

CGD experts offer ideas and analysis to improve international development policy. Also check out our Global Health blog and US Development Policy blog.

 

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What Advice Would You Give to Penny Mordaunt on Combating Illicit Financial Flows?

London is one of the world’s premier destinations for kleptocrats and corrupt oligarchs seeking to launder ill-gotten gains into property, investments, private school fees and influence. There is no reliable estimate of the total value of laundered funds that impacts on the UK. However the National Assessment of Serious Organised Crime says there is “a realistic possibility the scale of money laundering impacting the UK annually is in the hundreds of billions of pounds” (this includes both domestic and international sources). 

Stop Spreading the Myth: Zambia Is Not Losing $3 Billion to Tax Avoidance

If transparency in debates around matters of natural resource wealth, then so too does the way that figures get translated into public debates.  Earlier this month the Lusaka Times published a claim that multinational mining companies were “robbing Zambia of an estimated $3billion annually through tax evasion and illicit financial flows.” I have written about the Zambia Copper Billions before. I don’t think the figure is at all credible, and I am not the only one. Organisations that have allowed this myth to spread have not done any favours to the people of Zambia, and they have a responsibility to put it right. 

Destination Havana: Getting Investment Flowing Might Be Tougher Than You Think

Lifting the trade and investment embargo on Cuba is a laudable policy objective that would allow Cubans better access to American goods and services. It might also give American businesses a boost, including from places that could do with one, like rural Louisiana. Changing the law will be an uphill struggle unless November’s elections transform Congress. But even if Congress can agree, changes to the law might not be sufficient to convince investors to go to Cuba.

Malawi Can’t Afford Evidence-Free Tax Campaigns

Over the past couple of weeks Malawi has become the latest poster child for UK campaigns arguing that changes to the international tax system can deliver outsize returns for development. Specifically, Action Aid is calling on the UK government to renegotiate a 60-year-old tax treaty. Questions were also raised about this issue in the House of Commons.

Two World Bank Surveys Provide (Imperfect) Evidence that De-risking Might Be Hurting Developing Countries

The World Bank recently released the results of two separate surveys aimed at gauging the extent to which de-risking is a problem. The headline result is that banks around the world are closing accounts of money transfer organizations (MTOs) and are severing links with banks in other countries.  These careful, timely reports provide crucial evidence that de-risking is a very real phenomenon and that we should be worried about it.

US Treasury Under Secretary Nathan Sheets Calls for Action on De-risking at CGD Report Launch Event

Last Thursday, Under Secretary of the US Treasury Nathan Sheets spoke at CGD about anti–money laundering policies and the problem of de-risking, in connection with the launch of a new CGD working group report on the unintended consequences of anti–money laundering policies for poor countries. Sheets’s comments were consistent with the report’s key recommendations including the need for better data and for clearer guidance from financial regulators and standards setters.

Are Anti–Money Laundering Policies Hurting Poor Countries? – New CGD Working Group Report

Next week, the G-20 Leaders will meet in Antalya, Turkey, to continue their conversation about the importance of financial inclusion in achieving strong, sustainable, balanced economic growth. One item on the agenda will be the cost of remittances. In 2009, G-8 Leaders set a goal of reducing remittance costs to 5 percent within 5 years, roughly a 5 percentage point decrease.

How Much Do We Really Know about Multinational Tax Avoidance and How Much Is it Really Worth? Comments Welcome!

At the Financing for Development conference in Addis Ababa this week, the issue of international cooperation to address ‘tax dodging’ and illicit flows will be higher up the agenda than ever before. Credit for this is due in no small part to the various non-governmental organizations that have built up public consciousness and pressure through sustained campaigns focused on the tax affairs of multinational companies.

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