While civil society organizations deplored the failure of the recently drafted Addis Ababa Action Agenda to include the establishment of an intergovernmental body to oversee tax matters, the recognition of the role of illicit financial flows in undermining the economic growth of developing countries in the document was nevertheless a welcome and unprecedented move.
“Including illicit flows in the A4 document indicates that the international community now fully recognizes the problem and embraces the idea that it must be addressed in a substantial way,” Tom Cardamone, Global Financial Integrity’s managing director, who was in Addis Ababa, Ethiopia, for the third International Conference on Financing for Development to advocate for specific and measurable targets to curb illicit financial flows, told Devex. “Such an outcome could not have been predicted even two years ago and is a monumental shift in the conventional wisdom on development.”
The challenge now, however, is to actually halt the practices that continue to rob developing countries of hundreds of billions a year. While the Addis action agenda’s proposal to redouble efforts to “substantially reduce” illicit financial flows by 2030 includes strengthening national regulation and improving international cooperation, it fails to even mention the largest and perhaps most easily overlooked component of these losses.