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tv   Inside Story  Al Jazeera  October 1, 2020 10:30am-11:01am +03

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a hate crime. a charge that biden has failed to denounce the actions of mt fuck kolisch and of left wing activists but i'll tell you what i'll tell you what somebody has got to do something about the anti for and the left because this is not a right and teachers an idea not an organization you got it now delicious for a nation embroiled it ongoing social unrest the exchange has only added to the irony is felt by many americans with the u.s. election now less than 5 weeks away both candidates hit the campaign trail to play of their strikes and downplay the blunders of the 1st presidential debate kimberly held at al-jazeera the white house. this is al-jazeera these are the headlines armenia and azerbaijan have rejected international calls for talks to end fighting over
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a disputed region yes ari president says armenian troops must leave nagorno-karabakh before any negotiations can begin bernard smith has more from armenia's capital. we're told it was quiet overnight but remains tense of course in the gorno karabakh however the azerbaijani defense ministry says that this morning armenian forces shelled a train station in the town of. a civilian was killed in the shelling of this town has been previously targeted we have no confirmation of what's happening because of course regarding that from the armenian side but this is now day by since fighting broke out on sunday for nagorno-karabakh is the most serious really confrontations that there be since 2016 and there are fears that if it isn't contained it could spiral into an all out war. thousands of police are writes in
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force in hong kong to deter protests on china's national day it's the 1st major hole is a since beijing and post its national security law hong kong. a technical glitches forced trading on the tokyo stock exchange to be suspended for the day for the 1st time in its history it's the 3rd largest stock exchange in the world officials say the problem is with the system that relays market information and couldn't say when its will be fixed previous sites jews have happens when the electronic trading platform became overwhelmed with too many orders at one time. and world leaders are expected to visit kuwait's this week to pay their respects to the late samir shaikh subba. a funeral was held for the 91 year old on wednesday and the burial was limited to relatives chicha the coronavirus pandemic his half brother chick now off . has been sworn in as kuwait's new and near those are the headlines stay with us and al-jazeera inside story is up next. russia now seems to be going after the main
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economic resource which is of course oil we bring you the stories in development is that a rapidly changing the. president's promise america 1st policy triggered by war that morphed into a technological war counting the cost on al-jazeera. if a 9 shoreham or edge that's what the united nations says is happening to africa a new report shows the continent has lost hundreds of billions of dollars from illicit financial transactions what can be done to stop this and how much has it held africa back this is the inside story.
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welcome to the program africa lost $836000000000.00 between $22015.00 in what's being termed. elicit capital flight that's the finding of a report from the united nations that sanders africa would be debt free if it hadn't lost that money the un says the problem is robbing the continent and its people of their future that acard by nigerian president will how much it will harry has has the funds in for often come from jurisdiction with scarce resources for development financing and depleted foreign reserves drastic reduction in collectible revenue tax underpayment or evasion and poor investment inflows the un says these illicit financial flows now cost africa $88600000000.00 every year but what exactly are they well march of the last is through
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corruption tax evasion and mis invoicing of exports such as gold for example zambia reports that more than 50 percent of its copper exports go to switzerland but switzerland doesn't record any of it being imported this means african governments have much less to spend on things like health education and infrastructure in sierra leone for instance the lives of more than 2000 children could be saved every year if these practices were stopped and the money reinvested. let's bring in our guest in geneva junior davis is the lead author of the report from the united nations conference on trade and development in capetown solution idaho is a senior research fellow at the institute for global dialogue
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a south africa based think tank in london edwin kuria is the africa executive director at one a global movement campaigning to and extreme poverty welcome to the program julia you are the lead author of the report just give me what was your 1st reaction when you saw those staggering figures. thank you for inviting me i mean yes they are staggering because the motivation for this report really it was 2 and it basically contradicts your going and and recent initiatives to tackle this a financial flows both at the multilateral and the method in africa. and we wanted to try to improve and have a better understanding of the key chance through which these mechanisms are conducted and how they affect the try and sustainable development prospects for the continent. now you know these things very very important because they
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starve countries of. much needed financial resources to. boost investment in building their own productive capacity is supporting their social welfare systems and investing for the future so they are critical to their economic development is to find such a large amount of money every year equivalent to around 3.7 percent of their g.d.p. is basically leaking out of their economy is quite stunning. so mischa hundreds of billions of dollars evaporating in the african continent could this be the reason why the often the continent is always suffering mrs social development and sustainable development benchmarks. i think you it's part of the
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problem and i think it does actually speak to the devastation that illicit transaction flows have on the it cannot social economic landscape of the country i mean just reading the report and looking at the numbers are staggering and i think it's with what my colleague has suggested that amounts to 3.7 percent of africa's g.d.p. i think one of the important takeaways for me is that africa does not have to be a debtor it's actually a creditor to the world everyone else is benefiting out of africa's natural resources around these illicit financial flows and it's not necessarily african elite that are basically suffering but is because africa's ordinary citizens people on the ground who don't have access to sustainably out who don't have access to clean running water affordable sanitation. access to. just basic amenities and are constantly in a state of social economic struggle and and live on the periphery of the margins of
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society i think that in itself is just so unconscionable and i think that's what this report does it exposes the unconscionable lity of the fact that the money that is supposed to be within africa where we don't have to have for example you mentioned zambia zambia is $1.00 of the 1st countries in a covert phase of of the continent that's going to default on its loans we don't have to have that situation right now doing a someone's complaining to and extreme poverty this must be something very depressing to blame for the situation. i would say the blame there is enough for the blame to go around and i don't want to say it is $11.00 particular set of people but i would say 1st of all. that the story it didn't start today so he hasn't had the trend came from colonialism right a system as they put in place where the constant on the development of the commodity sect on the african continent you know was done in such
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a way that you really can't have even when africans to go over governance of their own countries they still didn't have the capacity to put in place the right processes and tax and tax in arrangements that would enable them to really account for what leaves the continent so there was that capacity gap in terms of not not even have it not knowing what to do to really control this flows and then there is of course the difficult of the people who actually trade in in this business and for most of them for people who are going to be taken commodities i'm focusing on the commodity part of things for those who are taking commodities out of the african continent aids sue other countries right and not small players this multinational corporations these are people who are involved in international trade so there is there is those they the multinationals themselves that you want to put some blame on then there is the system that allows it that is there is the
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international trading system the tax and system that allows for 4 processes or trade in process that allows for mis invoicing because of the lack of cooperation or the lack of you know aggregation and the ability of data you just talked about you know don't be a saint x. amount of gold or copper was sent was sold through to sweden or switzerland and then it doesn't have a cog in the other and it and so does the blame goes around for ok but on the commodity front you know junior the the un. it is with poor sousa's most of the time mccaffrey credited to knology like the us the illicit financial flows the way i see it is a theft of public funds could you explain to our international audience to the people who are watching us in sub-saharan africa north africa in zambia in zimbabwe in south africa what do you mean by the i fess ok in the report 'd we define you
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see financial flows as movements of money and assets across borders and basically illegal in source transfer or use now as we've just discussed. these are significant country was shit problem. both the developed and developing countries now there are at least 4 categories of illicit financial flows that can take the form of tax in commercial practices illegal markets. terrorist or criminal financing and corruption now the tax and commercial practices which people who were he alluded to the other guest accordion entity or in the areas of for example trade missing voicing tax avoidance and to beijing and these probably most estimates say these accounts for 65 percent 50 percent of the illicit
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financial flows. that we see taking place. in africa. and since most countries in africa are commodity dependent they are exposed and they mainly export growth commodities and these commercial flows. very very much related to these commodity exports and that's why it's a local area in our study on the financial flows. i would say and we place much more emphasis on the the channels for cross border transfers of these illicit financial flows. and i guess because most of this appears to be coming from the extractive sector we place quite a bit more emphasis there that we do for example of financial services or or or telecoms so we're talking about extractive commodities such as
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diamond goldblatt other all materials that could have turned africa into a thriving always is unfortunately what you see is poverty unemployment instability war and famine i mean couldn't this be the opportunity to start talking about the need to plump down all of these practices. indeed i think the opportunity has always been there and i want to go back to a point that was made by one of my fellow colleagues and that was it's not just now that we seeing these flows and the intensity of what these fellows have done to africa but it's been there for a long period of time even before independence of many african countries and it's just the way the world works i think it's the systemic and the systematic practices and the way the global economy is heavily skewed and biased in many ways in terms of pricing mechanisms and so forth and the cross border flows and i completely
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agree i think the time has come to reimagine some of these governance compaq's i mean one of the things that i found very disconcerting when i was reading the report was the whole question of the fact that this is not just a group of people that are basically engaging in lissa transaction flows this goes really deep it's almost like a mafia that operates a kind of illuminati of the of the world that basically looks at how to make profit extract profit and maximize profit for selfish gains and don't care about what's happening to other people around the world but talk about poverty reduction talk about alleviation talk about development in a very rhetorical way and i think the time has come for example to reimagine global compact like the kimberly process i mean i thought diamond was one of the commodities mentioned in the report as part of that 6. the 65 percent that was referred to think this is an ideal opportunity to redefine the definition of of the
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fact that damage and not just about the community process should not just be about conflict diamonds it should be about the role of illicit transfer of diamonds that contribute to different dynamics around enriching people that basically have no interest in stopping the richmond and i think that's the challenge for the for for us and secondly i think it's that it may be ideal to also ask the question is why haven't we seen a kind of well judy cation body like a similar kind of i.c.c. international criminal court bringing to book these multinationals think that the big players who essentially are quite embedded and entrenched but never come to book and never become accountable for their activities and i think that is really the political will do and this is what baffles me most of the time is when the u.n. talks about the 2030 agenda and sustainable development goals the african union steps in and says yes by 20 or 30 we absolutely going to guarantee that poverty is
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going to be eradicated but when you see this figures it looks like the biggest hoax of all times the biggest lie of all times. this let's take it let's start from where what we are passing through now it's one of mccovey as we speak right now developed countries are spending trillions of dollars to stimulate the economy right to provide salary support to what are called pay support to provide you know checks to their citizens african countries cannot afford that in fact they can't even afford to tests for copied they can't they don't even have a health infrastructure to you know to take in if we had seen the same numbers that we have seen in other climes if we had seen them in africa the african health system would have collapsed completely but the question is that why do we have constant on the investment in the sectors that affect the poorest people the simple truth is that there is no resources and so we have all the talk about financing for
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development so financing the s. the g.'s has been estimated to cost about $200000000000.00 annually right. if africa is bleeding out it is 6000000000 of that how on earth are we ever going to have the investment you know to make the edges realizable and this is that this is the challenge so financing it as digits is a core part of achieving the esta g.'s and that is why on. overseas development assistance you know for a direct investment all the kind of mechanisms that people are talking about in the private sector investment to help achieve that has just been touted but a question is when domestic resource mobilization is constantly you know hampered by this illicit financial flows there is no way no magic will enable us to achieve the early stages and this is the reason why this report you know heats up the core of the matter if africa does not develop itself does not mobilize the resources it
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needs to to even effect or to actually have the s. digits there is no help from outside that can help us achieve that that is the reality julia many people are saying that this report should have begun a step further in a sense that it should have shown us how embezzlers of public fund funds are to cry it's gangsters are stealing the money from africa sending this money to western countries which are very good at lecture in africa on democracy and transparency and then by the end of the day when you read the report you don't get that sense of that if the embezzlers are to be held accountable those who are on the recipient and should also be held accountable. no i hear what i hate the you know what you say and that and i and i and i and i think you are you
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have a point in a sense. you know the determinants was it financial flows are complex and that. there are a whole panoply of actors evil ranging from multinational and trade it isn't government officials a tax advisor on financial institutions lawyers accountants banks other financial institutions. so of course in the middle we do recognize that you know my levels of corruption are nice to tuition problem where you have a weekly situation and governance capacity temples to rule of law. together with low levels of transparency in economic and financial transactions or. opal it comes to ability then of course. the incidence of illicit financial flows can be worse but i think we've tried to to to look at the issue also from i suppose
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a multilateral level. an institutional level and also a region of the domestic level ok. you know i mean because these activities are by themselves inherently difficult to requote and they are saluted by lack of transparency a legal regulator affright works which you know government different elements of this. and across different jurisdictions you know in the eighty's something quite challenging. to address and i think as i said before it is a ship problem and it will be quiet she ate solution the problem was a pick up but it's also 'd a problem in europe absolutely it's a problem that all europe has to reconcile with solutions the reason why i'm asking this particular question is is that we do understand that it will take ages and ages to reconcile with a democracy and transparency in the meantime what do you think should be the
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immediate measures to be taken. into place to put an and to what is happening. i think firstly it's going to be difficult to end it immediately i think we've already seen initiatives and interventions set by the african union through the annal on the illicit transfer of capital flows led by the former south african president thabo mbeki i do feel that that panel needs to get a little bit more. action to to through its to its to what it can achieve and i think that in terms of its recommendations except for there needs to be at the a level a serious political dimension i mean we keep referring to the term political world and it becomes very tiresome to keep saying it but i think that as long as at this end of the spectrum with the flows leaving the continent if we see a little bit more kind of punitive action sanctions taken and trying to get that
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money back i mean i don't i don't necessarily believe that just saying that we need to return the money is going to happen whether or not we africa is able to play some kind of colonial after some kind of tax. or some kind of punitive action or transactional value to how you get that money back is going to be important because i think we could end up in a situation where we're going to be able to know the full capacity the full depth of this i think this report tells us that it's just the tip of the iceberg and we haven't even looked at the informal dynamics of any transaction flow we have young girls to cover here and when very refeed if you don't mind do you have any concerns that if this pattern continues then the ones who are going to pay most. particularly those in touch with the health systems it occasion and infrastructure on the continent will continue to lag far behind particular income so those 3
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particular vital sectors. of course i think the most important way to end extreme poverty is to empower people and empowerment comes to education and if you don't invest in education public access to education in africa as well as we speak and it's at this point the last study is that the aggregate study in africa show that more than 90 percent of the kids between 6 and 9 years old or 6 to 10 years or 20 got the ellie ellie ellie great could not read a sentence and that basically just shows a lot of the failure in the system and the failure is caused by lack of investment i don't teacher training and equipment or access in general quality of the infrastructure so that is a key part because domestic resource is key to supporting the social sectors in education and health if this continues we will continue to have on day investment in those sectors around and in extreme poverty will continue to be a challenge so does has to end needs the cooperation of the international community you mentioned the passage of the international banking system or the other or the
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complexity of the whole institutional mechanisms which govern the whole thing but many people say at the same time that it's easy to set up a monitoring mechanism that can easily spot the red flags not if i those concerned in the european community in the african community named those abusers shame them and that could play a significant role in reducing the amount of money that goes into different markets. i think that does that into ice on the one hand i think we should not and the glen the role that africa steps the african union and african governments themselves and there are several governments that i could name that are quite notable in 1000 these efforts to try and scale up you know african led anti money laundering initiatives i mean in this regard for example the african parrot me give you making mechanism which is
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a voluntary pointing mechanism for 80 member states you know it needs to be given a stronger mandate to devise binding legislated to spec can address mad matter corruption money laundering and move into the issue of how we can secure in the continent more capacity to keep their revenue base them ethically generated i think that african countries must themselves play a much more active role in the international code of tax reform. in having a kind of a stronger intergovernmental position basically the o.e.c.d. and the g 20 proposals on the international tax code have to be more engaged there . so i mean the report says that curbing illicit capital flight could generate something. enough cash by 2030 to finance 50 percent of the $2.00 trillion dollars needed to tackle the ramifications of climate change we
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don't think this is going to happen anytime soon and climate change is potentially the biggest challenge facing the continent what what's next how do you see the continent in 1020 years from now. i think if we don't stop putting these processes into place we're going to end up even worse in terms of the the climate change you're right as a destructive climate change is not stopping i mean we seeing different aspects of desiccation issues of climate refugees and so forth so i think if it doesn't if we don't address it i don't think we should be thinking of 2030 because 28 that is just around the corner and we we still in of a very difficult situation in africa and i think the problem is also the fact that whilst we want to upgrade an upscale certain initiatives in africa there's also a question of hollow africa can get its voice heard on the international arena and i think the g 20 as much as as much as that africa is there it needs to have more
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traction in terms of opening up african thank you to the g. 20 and dealing with these issues unfortunately we're running out of time general davis i really appreciate the fact that you have worked on that report and made it public so that people understand what's happening so now and it went i love the way your continue your fight to make africa a better continent by the way i come from africa thank you i really appreciate that thank you for what you can see the program again and the time by visiting our website dot com for further discussion go to face our facebook page that's facebook dot com forward slash a.j. inside story you can also join the conversation on twitter handle is. a j inside story from the house of obama and the entire team here in doha i for now. i. examining the headlines that said to me business wire is going round and they watch it on the news and i think implies the communal good for unflinching journalism how
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relevant is the debate here in this day and age how he characterized the protest movement i would say that we are observing awakening over the nation sharing personal stories with a global audience. explore an abundance of world class programming the world is watching on al-jazeera. north korea isolated and heavily sanctioned yet earning billions around the globe there are $39.00 is involved in everything that makes money for those korea. to carry defer the cost for us so they called us. the money that's earned it goes straight into the coffers of. a 2 part people in power investigation bureau 39 cash for came 2. young women with a passion for space i used to dream about working in a vessel company like not enough so that
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