Information service of the Pontifical Mission Societies since 1927
Rome (Agenzia Fides) – While the world is witnessing a dramatic international financial crisis, very few are worrying about the fact that, according to the President of the World Bank, this economic situation “will produce” 100 million new poor people, the majority being in underdeveloped countries, especially in Africa.
It is a situation of profound injustice, that when examined in depth with the economic and financial facts, becomes an authentic social sin of great magnitude. According to the report: “New Estimates of Capital Flight from Sub-Saharan African Countries: Linkages with External Borrowing and Policy Options,” made by two analysts from the University of Massachusetts, Amherst, the sum of capital hidden in foreign countries, taken from the 40 African sub-Saharan nations, from 1970 to 2004, is 607 billion dollars. The external debt (total) of these countries in 2004 was 227 billion dollars. In other words, sub-Saharan Africa is a net creditor to the rest of the world, in that the subcontinent’s private external assets exceed its public external liabilities This debt, the two analysts say, is for the most part a problem of the banks themselves, where there are deposits of stolen funds from corruption and embezzlement. The annual flight of capital in sub-Saharan Africa is equal to the annual aid that these countries receive for development.
“The individuals who engage in capital flight generally are members of the subcontinent’s economic and political élites, who take advantage of their privileged positions to acquire and channel funds abroad. Both the acquisition and the transfer of funds often involve legally questionable practices, including the falsification of trade documents (trade misinvoicing), the embezzlement of export revenues, and kickbacks on public and private sector contracts,” the report said.
The flight of capital is a crime that affects the poorest among society. The report demonstrates how the negative effects of the flight of capital (few state investments and lack of foreign money) has a heavy effect on the most vulnerable in society. The impact of the flight of capital is worsened when there is devaluation involved. The rich who have money abroad do not perceive these effects, while the poor have no protection from it.
It is necessary, therefore, that strategies be identified in reclaiming the money hidden in foreign banks. Some hopeful signs have been recently observed. The Swiss banks have collaborated in trying to track down the checking accounts of two African dictators who have been deceased for some time: Mobutu (Zaire) and Abacha (Nigeria). This occurred thanks to an intense international pressure. (LM) (Agenzia Fides 14/10/2008)
