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September 25, 2020

Addresses UN high-level panel: PM Imran Khan asks rich states to return poor's stolen assets

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September 25, 2020

Addresses UN high-level panel: PM Imran Khan asks rich states to return poor's stolen assets

ISLAMABAD: Prime Minister Imran Khan Thursday called upon the rich nations to immediately return the stolen money of developing countries parked in their banks.

Addressing a high-level panel on Financial Accountability, Transparency and Integrity (FACTI) on the sidelines of the ongoing United Nations General Assembly session, Imran said the international community must take decisive actions to stop what he called bleeding of the poor and developing countries.

The Prime Minister’s Office said the event was organised to present interim report of the FACTI panel, which identified major gaps in implementation and systemic shortcomings of the existing international frameworks for tax cooperation, anti-corruption [and] anti-money laundering.

Imran said Pakistan appreciated the initiative by Nigeria and Norway to establish a panel on international financial accountability and added that billions of dollars illicitly flew out of developing countries each year.

The prime minister pointed out that his government had come with a robust public mandate to rid the country of this menace. He said although the government had taken several initiatives domestically, the required action was to strengthen international cooperation to bring perpetrators of financial crimes to justice.

He said the FACTI panel report stated that $1 trillion was taken out each year by the white-collar criminals, while $20-40 billion was in the form of bribes received by 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 by multinational companies.

He said proposed these measures that the world must take to curb illicit financial flows. “The stolen assets of developing countries, including 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.

The enablers of corruption and bribery such as accountants, lawyers and other intermediaries must be closely regulated, monitored and held accountable. The beneficial ownership of foreign companies must be revealed immediately upon inquiry by the interested and affected governments.

Multinational corporations must not be allowed 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.

The UN should set up a mechanism 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. “Unless these steps are taken, the difference between the rich and poor countries will keep growing. The existing migration crisis will be dwarfed by what will happen in future if the gulf keeps growing,” he cautioned.

Speaking on “Poverty at Crossroads: Using Leadership and The Multidimensional Poverty Index to Build Back Better”, he noted that around one billion people – almost 15 percent of the world’s population – survived in poverty, lacking income and capabilities to live with dignity.

“Poverty imposes massive human suffering. It is the most pervasive violation of human rights. It is also the root cause of socio-economic instability, and of most political and security problems across the world. It is thus only right that poverty eradication is the first among UN’s Sustainable Development Goals,” he said.

Over the past 30 years, he pointed out, poverty had visibly declined. However, the COVID-19 pandemic has triggered the worst global 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.

The COVID virus does not discriminate; but it is the poor and vulnerable who have suffered the most from it, he said, adding that in Pakistan, ‘we have been able to control the virus through our strategy of smart lockdowns’.

“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 programme – Ehsaas (which means compassion in Urdu). It is the largest poverty eradication programme in Pakistan’s history,” he said.

“My government is committed to reducing poverty from 24.3 per cent to 19 per cent by 2023. My aim is to create an Islamic welfare state based on the principles of Riaysat-e-Madina through inclusive equitable growth and economic modernization”.

He said as the UN Secretary-General had observed: “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. The developing countries on the other hand are struggling to find even a small fraction of the $2.5 trillion they need.

“Apart from the direct attack on poverty, we need to address its systemic causes. At the national and international levels, the structures of finance, production and trade must be made fair and equitable.

The exploitation of the resources of the poor countries must stop. The illicit flows of the fruits of corruption and crime must be halted and the stolen assets returned to the countries of origin. And, developing countries must be helped to recover from the COVID crisis, to realize the SDGs and to ward off the impacts of climate change,” the prime minister said.

The financial resources, he stressed, needed by the developing countries must be mobilized, through debt relief – which I called for last April; the creation of new Special Drawing Rights; and expanded official development assistance.

“The realization of the SDGs can be accelerated, especially through major investments in sustainable infrastructure – in renewable energy, transport, housing, water and sanitation. New technologies must be mobilized and the digital divide bridged to enable developing countries to leapfrog into a modern development paradigm,” he said.

He concluded by saying, “I am confident that this important event will contribute significantly to our collective fight against global poverty and promotion of SDGs”.