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Robbery and Africa's Missing Millions

 

Last week I was robbed. Out for a drink on a Wednesday night with my friend I ended up going home that evening £2000 poorer. With my backpack stolen I lost my laptop, ipod, jacket and a number of other accessories.

It’s not something I’d like to occur regularly however it made me realise a few things.

First, I went straight to the police station. I made a report, listed the items stolen and received a case number. My details were even referred to a ‘victims of crime’ charity support group. Second, I sent off my insurance claim. Fortunately, I had backed up my all my work and now it’s a matter of waiting to hear from them.

Here’s what I learnt:

  1. Always watch your bag.
  2. I’m fortunate it happened here.

Living in the UK when such an event takes place we are able to call on the resources of others. We have options and opportunities that enable us to solve our problems. We’re empowered citizens.

Having my personal items stolen I felt, beyond loss, frustration. My laptop is my mobility. Technologically, socially and professionally I use it everyday to skype, work and relax. With it gone, I felt incapacitated - that I couldn’t achieve what I would like to. In short, it’s simply an inconvenience to try and work without it.

But that is all it is. An inconvenience - nothing more. I’m insured. I will be duly compensated. Ultimately, I have agency – the opportunity and ability to change my situation.

My experience cannot compare with those who live in extreme poverty. What is to me an inconvenience e is unfortunately the reality for many. It should not and it need not be like this.

When it comes to grand theft, robbery and corruption the citizens of developing countries suffer immensely. The previous evening the Africa All Parliamentary Group along with the Royal African Society hosted Dev Kar, a lead economist at Global Financial Integrity, who presented the findings of his report on Africa’s Missing Millions.

The figures detailed were astonishing.

Kar calculated that between 1970 and 2008 Africa had lost $854 billion in illicit financial flows. That was the conservative estimate. The most generous estimate put the figure at $1.8 trillion. To put that in perspective, Africa has a population of 1 billion. This means that every single citizen in Africa has effectively lost between $854-1,800 dollars. In other words, they’ve all been robbed of their own laptop.

How does this happen?
Through the flow of money that is illegally earned, transferred or utilised. In short, illicit money. As we blogged recently, Hosni Mubarak is a textbook example. As leader of Egypt for over 30 years he abused his office to privately benefit at the expense of his people. Using his position Mubarak built a personal fortune estimated to be in the region of $70 billion.

But here’s the catch. It’s not just corrupt governments that are privately benefiting from this outflow of money. Kar’s report concluded that total outflows from government officials in the form of bribery and theft represented only 3 percent of the global total.

Rather, the main culprits are large Western, yes Western, multinational companies. Through the proceeds of tax evasion, mainly through commercial trade mispricing, Western companies contribute a staggering 60-65 percent of the global total of illicit financial flows .

How is this possible?
To quote:

This massive flow of illicit money out of Africa is facilitated by a global shadow financial system comprising tax havens, secrecy jurisdictions, disguised corporations, anonymous trust accounts, fake foundations, trade mispricing and money laundering techniques.

In other words: our financial systems.

And who suffers the most from this? Once more, straight from the report:

It has its greatest impact on those at the bottom of income scales in their countries, removing resources that could otherwise be used for poverty alleviation and economic growth.

What the report academically refers to as those at the ‘bottom of income scales’ = the poor.

This problem is huge. It’s bigger than aid. Dev Kar estimated that for every one dollar given in aid to Africa, three returns under the table. And across all developing countries, it’s even worse. For every one dollar of aid, ten escapes.

Basically, if we’re serious about ending extreme poverty, we need to tackle this.

In the face of it all, what we can do?

For too long innocent citizens of developing countries have been robbed. This must change. And we have a critical role to play. Unlike us, they don’t have an effective recourse to effectively complain to. Theydon’t have a police station and an insurance company to lean on. This is where we can step in.

First, to understand how this system operates and who benefits we need to get educated.

Read.

A great place to start is Nicholas Shaxson’s just published book ‘Treasure Islands: Tax Havens and the Men who stole the World’. His book details the murky and little known world of tax havens and the central role they play in the global economy and importantly, in keeping people poor.

The good: it reads like a thriller. The bad: it’s all true.

Talk.
Share the book with your friends. Have conversations.

Get active.
The answer is simple and the solutions are straightforward. Unfortunately, getting there will be one long, hard fight. But we’re committed to this. The Global Poverty Project will be campaigning on this as it is the key to solving extreme poverty and if like us you feel outraged join our movement and add your voice to the chorus of those calling for change.

Comments

23/03/11 9:12pm - Posted By Perrin - Reply to this comment
I forgot to mention that I'd like my bag back so if anyone knows anything that could help me that would be great :)
23/03/11 9:14pm - Posted By Noj - Reply to this comment
If you do ever get a chance of watching the movie "Animal Farm" please do.

http://www.youtube.com/watch?v=NZldlyeR8DU
24/03/11 3:45am - Posted By Marc - Reply to this comment
Interesting way to present some of the facts around this gross injustice.
24/03/11 2:29pm - Posted By Tam - Reply to this comment
Planning to read this book, as well as "Half the Sky" while doing LBTL in May.

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