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

Prime Minister Imran Khan said on Thursday that while it is true that illicit financial flows negatively affect rich countries, that battered money movement is "devastating developing countries" worldwide.

The prime minister 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 don't think people fully realize the impact that (illicit financial flows) has on causing poverty, death and destruction in human development in the developing world," said Prime Minister Imran, who was welcomed to dialogue with A big round of applause from the audience.

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He said that in the last decade Pakistan had a corrupt leadership that carried the accumulated national debt for 60 years up to four times in the last 10 years. "Most of the money that was made with corruption was sent abroad," the prime minister said, adding that the funds that could have been spent on human development in the country ended up in extraterritorial bank accounts and western capitals.

"We have been doing everything possible to recover that money," he said, acknowledging that even when his government locates properties made of illegal money by Pakistanis abroad, it faces a series of legal loopholes and difficulties in trying to recover that money.

He called on developed countries to improve in regards to the return of illicit wealth, and said that "there is a lack of political will in rich countries because they benefit from it."

The poorest countries, on the other hand, do not have the resources to recover the money laundering, he added.

Prime Minister Imran said that the help provided by the richest countries to the poor countries is "tiny" compared to the money stolen from the latter and taken abroad.

"I don't understand why in these times you have these safe tax havens on the high seas," he said, wondering why rich countries continue to protect tax evaders.

He stressed the need to treat laundering money from poor countries to rich nations in the same way as "drug money" and terrorist financing "because it kills many more people."

In addressing the same event previously, UN Secretary General Antonio Guterres emphasized cooperation between countries to curb corruption and the flow of illegal funds.

"Collaboration is crucial to take strong measures against tax evasion, tax evasion, corruption and illicit financial flows that deprive developing countries of tens of billions of dollars in potential resources for their development each year," said.

"Cooperation will also be necessary to address the new challenge of taxing the digital economy."

The discussion also saw other leaders and experts emphasizing the importance of suppressing illicit financial flows.

Sneha Shah, a financial analyst at Refinitiv at Thomson Reuters, shared alarming figures with the forum, including that 86 percent of badly received money flows through the global banking system.

"We are losing 1.5 trillion dollars in illicit financial flows every year and we are not winning this battle. How much are we recovering? One percent of that wealth," he said. "And the flow of 86pc is through the banking system, so we are not winning."

Source: https://www.dawn.com/news/1507494/illicit-financial-flows-devastating-developing-countries-pm-imran-tells-un-event

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