IFFs & the Horn of Africa Conundrum

IFFs & the Horn of Africa Conundrum

Political Corruption, Illicit Financial Flows & Livelihood Insecurity

Illicit Financial Flows to and from 148 Developing Countries: 2006-2015

2019 - Global Financial Integrity (GFI)

Respublica Litereria Public Lecture - RL Vol XIII No 411 MMXIX

Costantinos Berhutesfa Costantinos, PhD

Professor of Public Policy & Sustainable Institutional Reforms

https://addisababa.academia.edu/CostyCostantinos

Abstract

With over one billion people still living in extreme poverty, accelerating progress towards human development remains the primary goal of international development agencies in Sub-Saharan Africa. In this context, an angst-ridden rationality paralyses discourse contagious to economic growth that exhibits a stalled, self-reinforcing dynamic of stupor of a policy-strategy mix. On the popular psyche and political front, there is little credence among the elite that businesses can reverse the grinding poverty stemming from food insecurity, inflation and macro-economic imbalances. In finance literature, illicit finance is generally described as a form of illegal and is often associated with money that is illegally earned, transferred, or utilised. The movement of such types of money is made with clear intention to make it disappear from any record in the country of origin. The lecture discusses capital flight and illicit financial outflows, IFF & SDGs, some recent developments on combating IFF based on the annual Global Financial Integrity (GFI) reports. IFFs stem from the elite class of countries who felt uncertain about political stability and, therefore, increasingly looked for financial institutions in the West. Multinationals, which have operations in hundreds of locations in different parts of the world are devising creative ways to reduce or avoid corporate taxes—became a normal practice.

Stemming the tide of the impact of corruption & IFF requires the evolution of a political culture, enhancing governing institutions, oversight and regulation, enhancing executive & civil service accountability, anti-corruption & IFF agencies and watchdogs. Corruption & IFF cannot be seen in isolation, its effect permeates societies. Civil society watchdogs, consumer associations and religious leaders can build coalitions against corruption & IFF and demand greater governmental accountability. Political leadership requires intimate knowledge of public policy analysis, formulation and management and development of strategic plans and implementing them. We can identify four main aspects to this. Firstly, it is analysis, formulation and management of policy, strategy, process and organisation. Second, it is obtaining policy consensus and ensuring that the public service and ancillary organisations can actually carry out the stated policy, and not see it subverted, neglected or undermined. Finally, it is consistency and commitment: ensuring that the policy is implemented with sufficient energy to function, actually. An inspiring ‘job description’ of leaders must be not only the power over discourse but also their ability to shape morality, to determine what is socially acceptable, culturally sound and politically uplifting.  

Key words: Illicit Financial Flows (IFF), capital flight, mispricing, Africa, GFI, High Level Panel on IFF, political culture, governing institutions

See paper here or  https://www.academia.edu/38297897/The_Horn_of_Africa_Conundrum_-_Illicit_Financial_Flows_and_Livelihood_Insecurity_RL_Vol_XIII_No_411_MMXIX