Posted by: gppn | 13/11/2009

Aid Governance – G20 can Plug Holes in the emmental of African Kleptocracy

Speaker: Vinay Nair, LSE

Moderator: Wilson Tan (SIPA/LKYSPP) – Rapporteur: Kayo Matsushita (Tokyo University)

Problem

Kleptocracy in Africa

G20 has pointed out the following in Africa;

  • To ensure promised funding made available for sustainable development,
  • Tackling tax havens ‘grey listed’ by the OECD.

However the cost of achieving this is high and with the financial crisis things became more difficult. Africa needs an additional funding of 27 billion dollars per annum by 2015.

Definition of Kleptorcacy

To strengthen personal power, using state funds; even pretending as honest service.

It’s a phenomenon which is hard to measure though efforts have been made. A study was carried out by UK All Party Parliamentary Group.

Analysis

TIEAs (Tax Information Exchange Agreements)

Three TIEAs have been signed so far with France and UK but African leaders were not included in the negotiations. As to why this happened, following hypothesis has been formulated;

Hypothesis

  • Obviation may suit many African leaders.
  • Role for African Union – joint liable model, 1 meta- agreement, all 52 nations are not mutually accountable .

Kleptocracy is at the very roots, corruption itself has to be tackled.

Given obviation risk from both African and swiss leaders, what role other countries leaders, particular G20 leaders should play:

  • Financial crisis aftermath should be accepted as a reality
  • Alternative funding sources should be found
  • The ‘root cause’ of the problem should be tackled

Possible Solutions

Giving the means to the African leaders, backed by the will of the international community.

  • This is an important policy window and we risk it closing – 12 bilateral TIEAs with OECD countries but no African nations have been included
  • Enforcing adoption of 13th TIEA gives an opportunity to tackle kleptocracy
  • gain a new source of income to close funding gaps
  • Must be on the Agenda for next G20 summit in Huntsville, Canada, June 2010
  • Precedent must be established for other ‘grey listed’ countries and other kleptocratic regions of the world

Question and Answers

How to motivate the G20 leaders?

  • Leaders who really want to tackle the issue should be engaged
  • Stronger regulations, institutions are required
  • Additional/Alternative source of funding is essential
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