NGO Another Way (Stichting Bakens Verzet), 1018 AM Amsterdam, Netherlands.

 

Edition 03: 22 April, 2010

 

01. E-course : Diploma in Integrated Development (Dip. Int. Dev)

 

Quarter 1.

 

 

SECTION A :  DEVELOPMENT PROBLEMS.

 

 

Study value : 04 points out of 18.

Indicative study time: 112 hours out of 504.

 

Study points are awarded only after the consolidated exam for Section A : Development Problems has been passed.

 


 

First block : Poverty and quality of life.

 

Study value : 02 points out of 18.

Indicative study time: 57 hours out of 504.

 

Study points are awarded only after the consolidated exam for Section A : Development Problems has been passed.

 


 

First block : Poverty and quality of life.

 

First Block : Section 1. Analysis of the causes of poverty. [26.50 hours]

First Block : Section 2. Services needed for a good quality of life.

First Block : Exam. [ 4 hours each attempt]

 


 

Block 1 of Section 1. Analysis of the causes of poverty. [26.50 hours]

 

Part 2 : In depth analysis of the causes of poverty. [14.00 hours]

 

01. In depth : definition of poverty.

02. In depth : some factors linked with poverty.

03. In depth : debts and subsidies.

04. In depth : financial leakages : food and water industries.

05. In depth : financial leakage : energy.

06. In depth : financial leakage : means of communication..

07. In depth : financial leakage : health and education.

08. In depth : financial leakage : theft of resources.

09. In depth : financial leakage : corruption.

10. In depth : the industry of poverty.

 

Report on Section 1 of Block 1 : [06.00 Hours]

 


 

Part 2 : In depth analysis of the causes of poverty. [14.00 hours]

 

 

09. In depth : Financial leakage : corruption. (At least one hour).

 

Consider this slide :

 

09. Financial leakage: corruption, export of financial means, tax havens.

 

Corruption 

 

Foreign accounts in industrialised countries, especially those in tax havens.

 

“Recent estimates put the amount held in offshore centres at between US$6 and US$7 trillion, which is approximately equivalent to the annual world trade in goods and services or about one third of total global GDP.  Much of this, perhaps between US$3 and US$4 trillion, consists of savings held abroad by wealthy individuals.” (Source :  Tax Havens : Releasing Hidden Billions for Poverty Eradication, Oxfam, Policy Paper, London, 2000 p.3).

 

Reference is made to the situation in 2000. The amount referred to is world-wide. It includes financial leakage in all its forms from both rich and poor countries. It includes, for example, illegal profits from drug-dealing and other organised criminal activities.

 

“It is impossible to calculate the financial losses to developing countries associated with offshore activity. Secrecy, electronic commerce and the growing mobility of capital have left all governments facing problems in revenue collection. The borderline between tax evasion and tax avoidance is becoming increasingly blurred. But at a conservative estimate, tax havens have contributed to revenue losses for developing countries of at least US$50 billion a year. To put this figure in context, it is roughly equivalent to annual aid flows to developing countries. We stress that the estimate is a conservative one. It is derived from the effects of tax competition and the non-payment of tax on flight capital.  It does not take into account outright tax evasion, corporate practices such as transfer pricing, or the use of havens to under-report profit.”  (Source :  Tax Havens : Releasing Hidden Billions for Poverty Eradication,  Oxfam, Policy Paper, London, 2000, executive summary).

 

The following report is from 17 April 2009.

 

“A consensus is also emerging that the vast capital outflows from developing countries need to be tackled through measures on tax havens and trans-national company reporting practices. The latest report by Global Financial Integrity estimates that "illicit financial flows out of developing countries are $850 billion to $1 trillion a year." The volumes are staggering and they dwarf the $100 billion of aid flowing every year from Northern to Southern countries. (Source: Molina Nura, “Not much on offer for poor countries to counter the crisis”, Bretton Woods Project Update 65 – article 564208).

 

Warning! The total amount refers to «illicit financial flows » from developing countries. It includes both illicit profits from corruption and those from tax evasion, drugs trafficking and other organised criminal activities.

 

Read at least section 2 of resource : Tax Havens : Releasing Hidden Billions for Poverty Eradication, , Oxfam, Policy Paper, London, 2000

 

1. Opinion.

 

What do you think about this problem ?

 

How far do you think the problem applies to your country and to your project area ?

 

Purchases of luxury goods situated abroad.

 

The consequences of illegal funds and cash in relation to corruption have been discussed  The consequences also cover their  «legalisation » (white-washing) through the purchase of goods abroad.

 

Many residents in developing countries, such as business people and some politicians possess real and personal property abroad, for an example a villa on the French Riviera, or a yacht complete with crew in the Bahamas. These investments may represent a form of  legalisation («white-washing ») of illegal funds. Some examples of this are world renowned.

 

2. Research.

 

Do you know of some examples ?

 

Purchase of luxury goods abroad may be a perfectly legal investment, outside of any discussion of corruption.

 

On the other hand, even legal investments abroad can have a negative effect on local development in poor countries. The investments might otherwise have been invested and recycled locally.

 

3. Opinion.

 

Who benefit from the construction or manufacture of goods purchased abroad ? How long does such an investment last ?

 

What would it be possible to do with the same amount invested locally ?

 

How could an end be made to this form of “legal” financial leakage?

 

Importation of luxury items into developing countries.

 

A third level of financial leakage is caused by the importation of luxury items into developing countries. Funds used for this purpose may be either legal or illegal.

 

4. Opinion.

 

Who benefit from the construction or manufacture of goods imported from abroad?

 

Read the notes you made in part 03. In depth : debts and subsidies.

 

5. Opinion.

 

Where luxury goods are imported from abroad, how much of the price may be attributed to interest?

 

Payment for these goods may be made directly from a foreign bank account. In that case, the funds used may be illicit. The payment can also be made through a legal bank account in a developing country. In that case the funds are transferred abroad.

 

6. Opinion.

 

What likelihood is there that the amounts in question ever return to the developing country?

 

How do these “lost” amounts contribute to the local quality of life of people  in the developing  country ?

 

Banks and their investments.

 

Some members of local populations in developing countries have bank accounts. In that case they put their (meagre) savings into their bank accounts.

 

7. Opinion.

 

Where do the banks invest this money ?  What do they invest it on ?

 

8. Research.

 

Suppose you wanted to set up a local development bank in your project area ? Which form would it take?

 

 



 First  block : Poverty and quality of life.


Index : Diploma in Integrated Development  (Dip.Int.Dev)

 List of key words.

 List of references.

  Course chart.


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