India must lead in global war against black money: Think Tank
Brisbane: Ahead of Prime Minister Narendra Modi's visit here for the G20 Summit, a leading global coalition against corruption has said India must take the lead in addressing black money, that affects the poor and developing countries the most.
"Prime Minister Modi made addressing black money one of his first priorities on taking office," said the Financial Transparency Coalition, a global network of over 150 civil society organisations, 13 governments and dozens of experts on illicit financial flows.
"India has a powerful role to play in the debate around developing country inclusion in systems for the cross-border exchange of financial information and country-by-country reporting for multinational corporations," it said.
"Modi has made bringing black money home a national priority. Now it's time for India to do the same on the global stage," said the coalition, which has the New Delhi-based Delhi's Centre for Budget Governance and Accountability as a member.
The Indian prime minister had left New Delhi Monday on a 10-day, three-nation tour and will be in this west Australian city Nov 15-16 for the G20 Summit.
According to the coalition, an estimated $1 trillion leaves developing nations every year by way of illicit financial flows -- money that is illegally earned, utilised or transferred, thereby depriving funds for projects to end poverty and push development.
This money should be generating economic growth, upping tax revenues, and funding new roads, schools, and hospitals. Instead, this capital is finding its way into bank accounts in tax havens, often inside G20 countries, it said.
"While the G20 may represent 85 percent of the global GDP, financial transparency standards to be adopted in Brisbane cannot forget the world's poorest countries, whose economies are losing billions to black money each year," said the coalition's Porter McConnell.
"The G20 may not provide a proper seat at the table for the world's poorest, but that doesn't mean its policies shouldn't take them into account."
The coalition said even as some troubling international crises in places like Syria and Iraq continue to fester, the G20 leaders should not forget the link between global instability, economic growth and black money.
Bolstering economic growth and creating jobs will require the commitment of G20 leaders to tackling loopholes and secrecy in the global financial system and the Brisbane summit holds the key to bring transparency to an opaque global financial system.
Pooja Rangaprasad, of the Centre for Budget and Governance Accountability, said one has seen progress on issues around financial transparency through the Base Erosion and Profit Shifting Project of the Organisation for Economic Co-operation and Development.
But such progress in the form of a cross border information exchange system and some national-level commitments on beneficial ownership, is not enough to create the necessary systems to address the larger issue of illicit outflows of ill-gotten wealth.
"You must make sure they are implemented correctly and inclusively."