(Photo: Jim Lopez/Getty Images)

We Give but Not as Much as We Take

Aid from rich countries to the developing world is a fraction of what we take from it.
Sep 12, 2014· 1 MIN READ
David McNair leads advocacy and policy work for ONE on government transparency and open data.

The ONE Campaign last week released a report exposing the biggest heist you’ve never heard of. ONE’s analysis shows that every year, criminals, corrupt officials, and dodgy secretive firms siphon more than $1 trillion from developing countries.

The theft occurs in the form of money laundering, corrupt deals for natural resources, drug trafficking, and much more. If developing countries cracked down on this scandal, taxed the siphoned funds at normal rates, and spent the proceeds on basic health services in the world’s poorest countries, an average of 3.6 million lives a year could be saved, ONE found.

The ONE report follows an analysis last summer by a group of nongovernmental organizations—including Health Poverty Action, Friends of the Earth Africa, and Tax Justice Network—alleging that while Africa receives $30 billion annually in aid, which is delivering tangible results throughout the developing world, more than $192 billion leaves the continent via “profits made by multinational companies...debt payments, often following irresponsible loans...illicit financial flows facilitated by the global network of tax havens,” illegal resource extraction, and an ongoing brain drain.

If it’s so obvious, why can’t poor countries fix the problem?

Because the solution lies not only in Addis Ababa or Accra but in decisions made in places such as Washington, London, and New York.

Rich countries’ policies enable the scandal. Dodgy money is funneled through shell companies in sunny Caribbean islands or Alpine havens. (The World Bank analyzed the biggest corruption scandals of the last two decades and found that 70 percent involved secret companies based in such places as the British Virgin Islands and Delaware.)

When money is paid to governments in poor countries, for oil or gas for example, often little is made public about the deal. So the people from whom the government derives its legitimacy don’t know how much money their government has received or how it spends the proceeds. Funds that ought to be used for lifesaving services may get channeled elsewhere. The effect is like rust eating away at the structures of society, undermining trust in government, scaring off foreign investment, and stifling job creation. At every stage, the poor pay the highest price.

ONE has a four-point plan that will help end the trillion-dollar scandal. The information will put power in the hands of the people, enabling them to follow the money. The plan is as follows:

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

G20 leaders with the power to change all this will meet in November. ONE is calling on them to make these changes.