New report: $1 Trillion siphoned from poor countries every year

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Poor countries are poor and the money rich countries spend helping them is bigger than money coming the other way, right? Wrong.

The ONE Campaign has just launched a campaign exposing the biggest heist you’ve never heard of. ONE’s analysis shows that more than a trillion dollars is siphoned from poor countries every year by criminals, corrupt officials and dodgy secretive firms.

This is not aid money – which is making a tangible difference – but money laundering, corrupt deals for natural resources, drug trafficking and much more. If poor countries were able to crack down on this scandal, tax it at normal rates, and spend it on basic health systems, it could raise enough money to save an average of 3.6 million lives a year.

Read ONE’s report on the Trillion Dollar Scandal here

If it’s so obvious, why don’t poor countries make the changes and get cracking on saving lives?

The answer is they can’t. The solution lies not in Addis or Accra, but in decisions made in Washington, Whitehall and Wall Street.

For the uncomfortable truth is that policies put in place by rich countries play an enabling role in the scandal. All too often the dodgy money is funneled through secret firms in rich countries and ends up in sunny Caribbean islands or alpine havens- all linked to G20 countries.

Bad Vs Good Infographic

Click this infographic to expand. Open budgets make stronger governments, while hidden budgets make weaker, more corrupt governments.

The World Bank analyzed the biggest corruption scandals of the last two decades and found that 70% involved secret companies based in places like the British Virgin Islands and the US state of Delaware.

When money is paid to poor country governments, for oil or gas for example, the people living there don’t know how much is being paid or where the money goes. Not only is the money that should be used for lifesaving services channeled elsewhere – the effect is like rust eating away at the structures of society – undermining trust in government, scaring off foreign investment, stifling job creation. At every stage the poor pay the highest price.

It was Louis Brandeis, associate justice of the US Supreme Court who said “sunlight is the best disinfectant.”

ONE has a four-point plan that will help end the trillion-dollar scandal. The information will put power into the hands of people allowing them to follow the money.

1. End secret companies so criminals can no longer hide their identities.
2. Force oil, gas and mining firms to “Publish what you pay” to governments
3. Crack down on tax evaders – by giving tax collectors information on secret bank accounts held offshore
4. Open up government data – so people can follow the money from resources to results.

G20 leaders meet in November – and have the power to make decisions that will change all of this. ONE is calling on them to make these changes now.

Download the Trillion Dollar Scandal report here

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