2 September 2019 by Sunit Bagree , ACTSA
According to a new report, The Money Drain: How Trade Misinvoicing and Unjust Debt Undermine Economic and Social Rights in Southern Africa, launched today by ACTSA on the eve of the SADC Summit in Dar es Salaam, rich countries may be accused of neo-colonialism if they fail to assist SADC countries to address these financial outflows.
ACTION FOR SOUTHERN AFRICA (ACTSA) PRESS RELEASE
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While SADC governments are primarily responsible for realising the economic and social rights of their citizens, the governments of rich countries have significant legal and moral obligations to support these efforts. The report demonstrates that the scale of unrealised economic and social rights in Southern Africa remains immense. For example, the youth unemployment rate is 31%, 5.4 million people are undernourished, there are at least 617,400 new HIV infections a year, and more than 40% of the population in 12 countries do not have access to basic sanitation services.
Meanwhile, as a result of trade misinvoicing, the SADC region loses at least US$8.8 billion a year from trade-related illicit outflows. After falsely declaring the price, quantity or quality of a good or service on an invoice submitted to customs, criminals can use intermediaries in secrecy jurisdictions to capture and divert illicit profits to offshore accounts. The report estimates that South Africa alone is drained of at least US$5.9 billion a year due to trade-related illicit outflows.
The SADC region is losing even more – at least US$21.1 billion a year – from external government debt payments. The external debts of governments are not necessarily problematic for their citizens. But some of the region’s external public debt is illegal, some is odious, and some is illegitimate. The report calculates that Angola alone is drained of US$12.1 billion a year in principal and interest Interest An amount paid in remuneration of an investment or received by a lender. Interest is calculated on the amount of the capital invested or borrowed, the duration of the operation and the rate that has been set. payments on public debt. Moreover, Southern Africa, parts of which were devastated by Cyclones Idai and Kenneth earlier this year, is owed major climate debts by rich countries.
Multilateral institutions dominated by rich countries, such as the Organisation for Economic Co-operation and Development
OECD
Organisation for Economic Co-operation and Development
OECD: the Organisation for Economic Co-operation and Development, created in 1960. It includes the major industrialized countries and has 34 members as of January 2016.
http://www.oecd.org/about/membersandpartners/
(OECD) and the G20
G20
The Group of Twenty (G20 or G-20) is a group made up of nineteen countries and the European Union whose ministers, central-bank directors and heads of state meet regularly. It was created in 1999 after the series of financial crises in the 1990s. Its aim is to encourage international consultation on the principle of broadening dialogue in keeping with the growing economic importance of a certain number of countries. Its members are Argentina, Australia, Brazil, Canada, China, France, Germany, Italy, India, Indonesia, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, USA, UK and the European Union (represented by the presidents of the Council and of the European Central Bank).
, have raised concerns about trade misinvoicing and debt in poorer countries. Yet progress on tackling trade misinvoicing is fragmented and slow, and virtually nothing has been achieved to ensure debt justice.
Sunit Bagree, ACTSA’s Senior Campaigns Officer and author of the report, said: “It’s a scandal that rich countries barely seem to care Care Le concept de « care work » (travail de soin) fait référence à un ensemble de pratiques matérielles et psychologiques destinées à apporter une réponse concrète aux besoins des autres et d’une communauté (dont des écosystèmes). On préfère le concept de care à celui de travail « domestique » ou de « reproduction » car il intègre les dimensions émotionnelles et psychologiques (charge mentale, affection, soutien), et il ne se limite pas aux aspects « privés » et gratuit en englobant également les activités rémunérées nécessaires à la reproduction de la vie humaine. that Southern Africa is haemorrhaging money. A broken international economic system is, fundamentally, why trade misinvoicing and unjust debt are depriving SADC governments of massive funds that they could use to realise economic and social rights for the many people living in poverty in the region. SADC governments can certainly do more, for example by employing innovative tools to detect potential misinvoicing of trade transactions and organising comprehensive public debt audits. But they must also call out powerful international countries for failing to live up to their responsibilities and turning their collective backs on vulnerable people in Southern Africa.”
The full report can be downloaded here.
General media enquiries: Millie Martin, ACTSA Communications & Events Officer, millie.martin at actsa.org / +44 (0)7590 487503
Further comment and interviews:
Notes
Source: ACTSA