*PM Imran Khan proposes measures to curb illicit financial flows
Addressing a high-level panel on FACTI (Financial Accountability, Transparency and Integrity) on the sidelines of the ongoing United Nations General Assembly session, Prime Minister of Pakistan Imran Khan said the international community must take decisive actions to halt what he called bleeding of the poor and developing countries. The Prime Minister’s Office said the event was organised to current interim report of the FACTI panel, which identified main gaps in implementation and systemic shortcomings of the existing international frameworks for tax cooperation, anti-corruption [and] anti-money laundering.
Khan said Pakistan appreciated the initiative by Norway and Nigeria to organize a panel on international financial accountability and added that billions of dollars illicitly flew out of developing countries yearly. Imran Khan pointed out that his government had come with a robust public mandate to rid Pakistan of this menace. He said although the government of Pakistan had taken various initiatives nationally, the required action was to strengthen international cooperation to bring perpetrators of financial crimes to justice. He said the FACTI panel report urged that $1 trillion was taken out each year by the white-collar criminals, while $20-40 billion was in the form of bribes received through these corrupt white-collar criminals; $7 trillion in stolen assets was parked in these safe tax haven destinations; $500-600 billion was lost each year in tax avoidance through multinational firms. Prime Minister said proposed these measures that the world must take to curb illicit financial flows. The stolen assets of developing countries, counting proceeds of corruption, bribery and other crimes, must be returned immediately. The authorities in haven destinations must impose criminal and financial penalties on their financial institutions which receive and utilise such money and assets. It is also said that the enablers of corruption and bribery like accountants, lawyers and other intermediaries must be closely regulated, monitored and held accountable. The beneficial ownership of foreign firms must be revealed immediately upon inquiry by the interested and affected governments. Multinational corporations must not be permitted to resort to profit-shifting to low-tax jurisdictions for avoiding taxation. A global minimum corporate tax could prevent this practice. Revenues from digital transactions should be taxed where the revenues are generated, not elsewhere. Unequal investment treaties should be discarded or revised, and a fair system for adjudication of investment disputes set up. All official and unofficial bodies set up to control and monitor illicit financial flows must include all the interested countries.
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The UN should set up a procedure to coordinate and supervise the work of the various official and non-official bodies dealing with illicit financial flows to ensure coherence, consistency and equity in their work. The prime minister said the need of developing countries to protect their precious resources had become even more vital because of recession triggered by the Covid-19 pandemic. Using Leadership and the Multidimensional Poverty Index to Build Back Better, Imran khan noted that around one billion people – approximately 15 percent of the world’s population – survived in poverty, lacking income and capabilities to live with dignity. Over the past 30 years, poverty had visibly declined. However, the COVID-19 has triggered the worst worldwide recession in over a century. One hundred million people are likely to be pushed back into extreme poverty. A decade’s development could be reversed, Imran Khan added. My government has done its utmost to shield the poor and the vulnerable. Despite our financial difficulties, we implemented a $1.25 billion package to deliver emergency cash to over 15 million families, covering over a 100 million people. My government is implementing a multisectoral poverty alleviation program – Ehsaas. It is the largest poverty eradication program in Pakistan’s history, Prime Minister said. My government is committed to reducing poverty from 24.3 percent to 19 percent by 2023. Inequality is the hallmark of our times. Today, he added, 26 richest people in the world owned as much wealth as half the world’s population does. The richer countries have mobilized over $10 trillion to recover from the COVID crisis. On the other hand, the developing countries are struggling to find even a small fraction of the $2.5 trillion they need. The financial resources, he stressed, needed through the developing countries must be mobilized, by debt relief – which I called for last April; the creation of new Special Drawing Rights; and expanded official development assistance. Imran Khan concluded by saying, “I am confident that this important event will contribute significantly to our collective fight against worldwide poverty and promotion of SDGs.