Monday September 27, 2021

$1 trillion from developing countries land into tax havens annually: PM

April 07, 2021

ISLAMABAD: Citing the FACTI report, Prime Minister Imran Khan on Tuesday said that annually $1 trillion from developing countries land into the tax havens, or into properties and richer countries, being the one reason behind huge inequality in the world. The prime minister said he would personally talk to the IMF head against the backdrop of the coronavirus third wave as the government would be coming up with a second relief package. Speaking on the UNDP’s Pakistan National Human Development Report here, he continued that $7 trillion of these poor countries’ money were laundered and parked in unsafe tax havens, and this is the reason behind huge inequality in this world. So, he said, the poor countries were not only deprived of employment which this money could provide. When so many dollars leave the poor countries, the currency gets affected.

“And when the currency gets affected and when it devalues, it causes more poverty and inflation. So, this is a vicious cycle going on. And really, unless something is done about it, the richer countries will have to build these walls to keep these economic immigrants out, who will be trying desperately risking their lives to get to richer countries,” he pointed out.

He thanked the UNDP for the report and said it was about things “we have talked about in these past two and a half years. My government's concern is to lift people out of poverty”. Referring to the coronavirus and the inequality, he said it was not just a problem of Pakistan, it was a problem of almost all the developing world. It was also of course a problem in the richer countries where you see this incredible situation. He quoted a report that about 60 people own about the same amount of wealth as about three and a half billion people on this earth, which are shocking figures, because there has to be something wrong with the world order where such inequality exists.

“And on the other hand, you have extreme poverty and then the COVID which has made poor people, whether they're in the rich countries or in the poor countries, it's made people poorer. So more and more people have gone below the poverty line, it hasn't affected the rich people. In fact, some of the rich people have got richer during the last one year,” he noted.

He said the elite capture was a problem, specifically of the developing countries. “Now I come to the elite capture in our country, in our experience of two and a half years. I'm proud to say that we are the first government that has gone after the cartels. No one in our history has gone after the most powerful sugar cartel. Because it's like the dessert of a poor family, and for the poor, sugar is everything. We intend to strengthen the Competition Commission again to stop these cartels from making mega profits at the expense of people who actually bear the burden because of inflation and they get poorer,” he said.

The prime minister said: “I am proud of the performance of Khyber Pakhtunkhwa, a province that was devastated when we in 2013 took over the province, it was devastated by the war on terror. There were bomb attacks going on, people had migrated to Islamabad and other cities because of the danger to their lives. And so, it gives me great pleasure, what you pointed out, what the report says that the province reduced poverty has almost caught up with Punjab, so that is a source of great satisfaction for my government.”

“We are going to speak to the IMF, because we see disruptions ahead just when our economy was recovering and all the indicators were positive. Unfortunately, now we will have to review the whole situation, and a new Ehsaas programme because the service industry has been badly hit everywhere in the world. And now with this third wave, we will have to give incentive packages. So I think it's time for the second package, and we will obviously talk to the IMF. And I think, the head of the IMF realizes that this is a very unique situation. And you have to, you cannot suppress demand and you cannot impose conditions. I will personally talk to her…,” he said.

“Finally, all I would like to say that this UNDP report is going to really help us, because you have gone into details, we talk in theory, but now with all this data you've gathered, this will really help us in fine-tuning policies and the main thing is to protect our poor section of the society, and also the regional disparity we're already working on. And Sania has been gathering this data, we've covered almost 75pc of our population, and we hope to have this data of covering the entire population by June,” he said.

“We will then be able to directly help them and their basic foods which they consume, the basic staple diet, we will be able to directly fund them, because, unfortunately, the commodity prices are rising all over the world because of the COVID disruption of the supply side, so we will be able to protect these people by directly subsidizing them and that's why this data is extremely valuable for us,” he said.