Anti-poverty organization urges G20 leaders to act against corruption costing $1 trillion

  • Article by: ROD MCGUIRK , Associated Press
  • Updated: September 2, 2014 - 9:30 PM

CANBERRA, Australia — Anti-poverty organization ONE is urging leaders of the 20 largest economies to act decisively at an annual summit in November against money laundering, bribery, tax evasion and corruption which it estimates costs the world's poorest countries more than $1 trillion a year.

The Washington, D.C.-based advocacy group launched its report on the economic cost of corruption on the developing world on Wednesday in the Australian capital Canberra at a Parliament House event attended by diplomats from the United States, Canada, Saudi Arabia and South Africa.

ONE is lobbying Australia to use its presidency of the G20 leaders' summit in the city of Brisbane on Nov. 15-16 to end what it calls a culture of secrecy that allows corruption and criminality to thrive in many countries.

The report, The Trillion Dollar Scandal, estimates that as many as 3.6 million deaths could be prevented if money drained from the poorest economies by corruption was invested in health systems.

"Developing countries are losing a trillion dollars every year as result of money laundering, bribery and tax evasion, and the uncomfortable truth is that often the policies put in place by G20 countries are facilitating those outflows from the world's poorest countries," report author David McNair said.

McNair pointed to World Bank research that found 70 percent of major international financial scandals since 1980 involved shelf companies in which the owners were unknown. The British Virgin Islands and the U.S. state of Delaware were the most popular places for such companies to be registered.

The report found that the losses could be significantly reduced if policies were put in place to increase transparency and combat corruption in four key areas: money laundering, a public register of principals of phantom firms in which ownership structures are hidden, public disclosure of company payments made in natural resource deals and an international exchange of tax information to combat tax evasion.

McNair held meetings in Canberra this week with officials from Prime Minister Tony Abbott's office, Treasury Department and the Department of Foreign Affairs and Trade to seek support for the recommendations.

Parliamentary Secretary to the Prime Minister Alan Tudge told the launch there was "significant alignment between the aspirations of the Australian government and the G20 on the one hand, and the call to action that you (ONE) have in your report, on the other."

"In some cases, your suggestions might be running ahead of what some G20 members are currently able to achieve," Tudge said, add that "Australia, as president of the G20 and co-chair of the G20 Anti-Corruption Working Group, is absolutely determined to lead the work to improve transparency and to combat tax evasion and corruption," he added.

ONE used three methodologies to calculate the costs of secrecy and corruption to the poorest countries. All methodologies agreed that the cost was between $1 trillion and $2 trillion.

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