Global Policy Watch: Debt Crisis & Illicit Financial Flows



 Round Up 1 July 2022
 Does  Our Common Agenda  advance solutions?
 In This Issue
 African countries express concerns on
 damaging effects of IFFs
 CSOs question many proposals in the S-G’ s
 flagship report -  Our Common Agenda  -
 and its central concept of networked
 S-G’ s report on  Our Common Agenda    :
 https://www eport/
 PGA  s letter on  Our Common Agenda    :
 https://www -from-the-p
 Video link for 2nd thematic cluster of  Our
 Common Agenda  on “Accelerating the
 SDGs through sustainable financing and
 building trust”:
 Definition of Illicit Financial Flows  (IFFs)
 Defined as the transferred monies that ar e earned,
 transferred or utilized thr ough illicit means, into or out of a
 country . They include legally ear ned value, money and
monetized instruments that are transferred illicitly or value,
money and monetized instruments that are acquired through
illegal activities, such as the proceeds of crimes, including
corruption and tax evasion. They can also capture tax
avoidance and trade mis-invoicing. Although the UN
Economic Commission for Africa, UNDP, Global Financial
Integrity and others have produced global
country-by-country estimates for losses due to illicit
financial flows, more work on methodologies would be
S-G’s Proposal for Biennial Summit
S-G proposes “Biennial Summits between the G20, the
Economic and Social Council, and the heads of
International Financing Institutions, at the level of Head
of State or government. This is to strengthen the role of
the United Nations as the main pillar of the multilateral
These Summits will align global financial
decision-making around the 2030 Agenda, and tackle
questions of financing for sustainable growth, poverty
reduction and resilience – key aims not just of SDG 17
on partnerships, but of all the SDGs that require
increased investment, and of the Addis Ababa Action
Mali/African Group emphasizes asset
recovery as key goal of work on IFFs
On Tax: The African Group takes note of
establishing an international tax structure; to be
“based on consultation with all Member States of
the United Nations rather than a limited number of
countries (G20)".
On Corruption/IFFs: The African Group
recommends “that any work on illicit financial
flows should address the legal, political and
practical obstacles facing timely and efficient
asset recovery”, not just transparency in
international financial flows.
On Biennial Summit: The African Group
expressed concern about the non-inclusivity of
the Summit which would “defeat the very purpose
of inclusivity and listening to all Member States”.
On Green Protectionism: The African Group
“believes that it is too early to make interlinkages
between international trade and sustainable
economies, especially where developing countries
are involved. Most developing countries still lack
resources and knowledge necessary for transition
to sustainable economies at the current stage,
and would therefore be significantly affected
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Round Up 1 July 2022
negatively if this linkage is applied in international
trade systems".
IFFs are being used to wage wars and
destabilize Africa - Ethiopia
On Corruption/IFFs: Ethiopia reminds that US$ 1
trillion has been lost over 50 years to illicit
financial flows and this exceeds the development
assistance Africa received in that period. “The
finance is being used to wage war and destabilize
On Biennial Summit: Ethiopia echoes South
Africa’s sentiments; requests “Secretary-General
to involve the General Assembly and the ECOSOC
as primary participants in the summit”.
On Rule of Law: Suggests having instructions for
conduct instead of ‘rule of law’. “Adherence to
international laws is what economically and
militarily weaker states do. Unilateral coercive
measures are used in contravention with the
widely agreed on norms".
On Listening and Inclusion: “Need to adopt
non-prescriptive methods for national affairs of
states. The listening exercise by the UN must
focus on the work of the organization and its
Morocco/Arab Group calls for reforms in
tax structure, closing corruption loopholes,
raises doubts on Biennial Summit
On Tax: “The idea of reforming an international
tax structure to respond to the realities of the
growth of international trade, cross-border
investment and the digital economy, and the
establishment of an international mechanism for
this purpose, must be based on consultation with
all UN Member States and not on the basis of a
mechanism prepared within the framework of a
limited number of countries".
On Corruption/IFFs: Morocco on behalf of the
Arab Group points to the “Global Anti-Corruption
Network” under the auspices of the United
Nations Office on Drugs and Crime as a tool to
combat corruption. Wants loopholes in money
recovery to be addressed given the “growth in
international trade, cross-border investments and
the digital economy”.
On Biennial Summit: Seeks clarity on the
establishment of an Economic Security Council
and stresses that this summit be inclusive.
Agenda of action must be based on the Rio
Principles of Equity and Common but
Differentiated Responsibility (CBDR),
including the implementation of Addis Ababa
Action Agenda
South Africa calls for substantial reforms in
On Tax: “Believe that there should be an
international tax treaty based at the UN…reiterate
our support for the work of the FACTI Panel and
remain in agreement with most of its
On Debt: South Africa calls for massive increase
in finance: “Finance needs to be predictable and
appropriate to allow developing countries to
implement their development plans and to avoid
exacerbating the debt crisis".
On Non-GDP Metrics: South Africa suggests
alternatives in the form of “the human
development index, the inclusive wealth index, the
Genuine Progress Indicator, the multidimensional
poverty index, and the inequality-adjusted human
development index”.
On Biennial Summit: Believes UN should “remain
the center of global economic policy making”.
South Africa believes in creating an “international
treaty based at the UN as it would cover all
countries”, to reduce extreme inequalities in
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Round Up 1 July 2022
CSOs for FfD: need to shift the center of
economic governance in favour of UN
centered processes
“.…need a new UN tax convention, new
multilateral legal frameworks to address debt
crisis, regulation of credit rating agencies, the
need to really initiate a process of regulation of
asset management agencies, discussion on new
trade regimes that are able to tackle commodity
dependence and IP regimes”.
On Debt: Issue of financing is primarily a
governance issue. “Reality is we continue to be
confronted with outflows from the South to the
North…on one hand we have theatrical
discussions at the UN (about
multi-stakeholderism) but the decisions are
dominated within the traditional developed
country dominated institutions and consolidating
existing frameworks that have not worked. Many
proposals under the Common Agenda will deepen
and institutionalize this approach".
On Biennial Summit: In a letter to Member
States, the Civil Society Financing for
Development Group raises concern of the Summit
being redundant and undermining the existing FfD
process. Finds it “unacceptable for the United
Nations to promote structures that privilege an
exclusive group of Member States (such as the
G20), instead of reaffirming existing universal
inclusive processes”.
Support for multilateral negotiations at UN to
address loopholes in tax transactions
The Arab Group √
Canada/ Australia, New Zealand and Canada
Like-Minded Group of Countries Supporters of
Middle-Income Countries √
The EU √
The African Group √
Egypt √
Poland √
Liechtenstein √
Morocco/ Arab Group
Canada/ Canada, Australia and New Zealand (CANZ)
Colombia/ Like-Minded Group of Countries Supporters of
Middle-Income Countries
European Union
Botswana/ Landlocked Developing Countries
Mali/ African Group
Jamaica/ Caribbean Community (CARICOM)
Syrian Arab Republic
South Africa
Bolivia (Plurinational State of)
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Round Up 1 July 2022
Botswana/LLDCs urge for shared tax
revenues from digital MNEs with users in
the LLDC
On Tax: To address the endemic tax evasion and
aggressive tax avoidance, the LLDCs “urge that
mechanisms be developed to share tax revenues
fairly from digital Multinational Enterprises (MNEs)
that have users in developing economies,
including LLDCs, despite not being based there”.
On Debt: Calls for “special recognition to the
financing needs of vulnerable economies,
including LLDCs, whose challenges have been
further amplified by the COVID-19 pandemic".
On Listening and Inclusion: Countries may feel
the risk of being left behind due to “geography,
dispersed populations and weak digital
infrastructure”; urges the Secretary-General to
consider “assistance towards the development of
digital infrastructure”.
On Non-GDP Metrics: “It is crucial that any such
complement indicators capture their
disadvantages due to the geography,
disproportionate trade and transit costs and
vulnerability to crises”.
Senegal offers a clear vision for a new
international economic and financial
On Tax: Calls out the lack of a tax treaty with
universal vocation and suggests: “First,
international cooperation in tax matters (taxation
of the digital economy, financial information and
information exchange production and publication
of data) and dispute resolution (international tax
disputes, non-judicial resolutions, compensation
abroad, confiscation, restitution and disposal of
assets, etc.). Second, support for regional
initiatives such as the Common African Position
on Asset Recovery (CAPAR), adopted at the 33rd
African Union Summit, and the African Legal
Support Facility (ALSF), under the aegis of the
African Development Bank (ADB)”.
On Debt: “First, it is necessary to revise the
cumbersome and rigid rules and procedures
which hinder the access of developing countries
to capital markets at sustainable costs, consistent
long-term loans and affordable conditions, for the
funding for their development. Then, it is
imperative to revise downwards the too high
interest rates, because of an inequitable system of
evaluation of the risk of investment in the
developing countries, particularly in Africa where
the insurance premiums are more expensive and
hamper the competitiveness of its economies".
On Biennial Summit: “OECD takes an active part
in this (Biennial) meeting because some of its
rules, in particular those related to the conditions
for granting export credits, deserve to be
corrected. We cannot apply the same standards
to everyone".
On Non-GDP Metrics: Supports non-GDP
metrics “The debt architecture reveals glaring
inequity. For example, in West Africa Economic
and Monetary Union countries, the debt ceiling is
set at 70% of GDP and the budget deficit
threshold not to be exceeded at 3%. However, the
GDP in these countries does not really reflect the
structural transformation of the economy and the
substantial change in the lives of their peoples.
This is why supplementing it with new indicators,
in particular the well-being and the sustainability
of the planet, is an excellent initiative".
Jamaica/ CARICOM calls for reforms but
cautions against biases
On Tax: Supports reformed international taxation
because “decisions taken by the few have caused
enormous harm to many small island developing
states like ours".
On Corruption/IFFs: Wants to continue fighting
against money laundering and IFFs but “cannot
support actions such as “de-risking” and
blacklists, which imperil economies and
livelihoods in well-regulated jurisdictions like
those of CARICOM countries. We urge, therefore,
that any action in this area be genuinely inclusive
and ensure that the interests of all are taken into
On Non-GDP Metrics: “GDP per capita tool is an
outdated measure of developmental success and
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Round Up 1 July 2022
in many cases, that it masks several underlying
conditions including fragility and vulnerability and
therefore misrepresents the actual reality on the
ground faced by small island developing states".
Emphasizes the importance of MVI.
On proposed Biennial Summit: Constant
dialogue needed but cautions “against creating
yet another process or forum from which key
stakeholders are excluded, including those
directly affected”.
Agenda of action designed to accelerate the
implementation of existing agreements, including the
Sustainable Development Goals”. The report includes
S-G’s key proposals across the 12 commitments from the
Declaration on the Commemoration of the 75th
anniversary of the United Nations as well as proposed key
moments. This report was in response to a request from
UN Member States for a report-back with
recommendations on how to move forward on current
challenges".- Women's Major Group
Per President of General Assembly’s letter on OCA
1. Accelerating and scaling up the SDGs, leaving
no-one behind
Covers inter alia [proposals in chapters II and III of Our Common
Agenda report, including] paragraphs 19 (social contract), 28 (fund
for social protection), 29 (informal economy), 30 (World Social
Summit), 31 (transformative gender measures), 32 (CSW), 34
(human rights mechanisms), 36 (legal identity), 46 (youth in
politics), 47 (youth office, youth engagement), 49 (education
summit), 51 (job creation), 80 (just transition) and 112 (UN
Development System).
2. Accelerating the SDGs through sustainable
financing and building trust
Covers inter alia [proposals in chapters II and III of Our Common
Agenda report, including] paragraphs 21 (listening exercises), 23
(rule of law), 25 (tax and illicit financial flows), 26 (public
information code of conduct), 35 (disinformation), 38 (GDP);73
(global economy, biennial G20-ECOSOC-SG-IFI summit), 74
(fairer trading system), 75 (financial integrity), 76 (sustainable
business models) and 124 (UN budget).
3. Frameworks for a peaceful world – promoting
peace, international law and digital cooperation
Covers inter alia proposals in chapter IV of Our Common Agenda
report, including paragraphs 89 (new agenda for peace), 91 (outer
space), 93 (digital compact) and 127 (intergovernmental organs);
[23] (rule of law), [34], (human rights mechanisms, Universal
Periodic Review), 35 (application of human rights to frontier
issues), [36] (legal identity), 96 (international law), 113 (UN support
to social contract) and 129 (funding human rights mechanisms).
4. Protecting our planet and being prepared for the
Covers inter alia proposals in chapter IV of Our Common Agenda
report, including paragraphs 79 (climate finance), 82 (1.5 degrees),
83 (global stocktake), 85 (green finance), 86 (adaptation, territorial
threats of climate change) and 87 (biodiversity); 54 (representing
future generations), 56 (future impact/lab), 58 (Envoy for Future
Generations), 59 (Declaration on Future Generations) and 125
(Trusteeship Council or alternative); and 100 (foresight), 101
(emergency platform), 103 (Summit of the Future), 67 (global
vaccination plan), 68 (WHO), 69 (pandemic preparedness), 70
(access to health technologies) and 71 (universal health
5. Enhancing international cooperation
Covers inter alia proposals in chapters IV and V of Our Common
Agenda report, including paragraphs 32 (CSW), 102 (High Level
Advisory Board), 111 (age, gender, diversity), 112 (governance
and funding of development), 114 (recruitment), 117 (Scientific
Advisory Board), 123 (UN 2.0) and 124 (UN budget), 126-128
(intergovernmental organs), [129] (funding human rights
mechanisms); and 118 (regional organizations), 119 (local and
regional governments, parliaments), 120 (private sector
engagement and accountability), 121, 122 (civil society) and 130
(engagement of civil society and other stakeholders across
intergovernmental organs)
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