The OECD along with the African Development Bank (AfDB), the Inter-Governmental Action Group against Money Laundering in West Africa (GIABA), the New Partnership for Africa’s Development (NEPAD) and the World Bank, recently published another excellent analysis of IFFs (illicit financial flows) specifically relating to the economy of illicit trade in West Africa. I highly recommend taking the time to read this very detailed report.
It’s available here: http://www.oecd.org/dac/illicit-financial-flows-9789264268418-en.htm
The OECD’s investigation goes farther than historic conventional methods to simply quantify illicit financial flows but offers a qualitative analysis of the entire economic, social, political landscapes that are affected.
Nevertheless, the negative impact of illicit financial flows (IFFs) on progress towards development goals increasingly features on international political agendas. There is now a consensus that resolving the problem of IFFs requires responding to underlying development challenges, and tackling all parts of the problem in source, transit and destination countries.
The harvesting of subsoil wealth is too often a source of poverty, conflict, environmental degradation, symptomatic of a vicious economic circle. Many call this the “resource curse”. Daron Acemoglu, author or Why Nations Fail, believes that “evidence suggests that countries with bad institutions are likely to experience the natural resource curse.” However Frederick van der Ploeg OxCarre Research Paper 5, Natural Resources: Curse or Blessing?, he states: “Are natural resources a “curse” or a “blessing”? The empirical evidence suggests either outcome is possible.” Both Acemoglu and Van der Ploeg offer very interesting points of view.
Natural resources inevitably are not a curse but should be a blessing for the nations that harvests them. However, evidence proves that the extractive industry needs a contemporaneous deliberate strategy of human development, in order to leave human wealth in each respective nation. Human development can take the form of employment creation, financial self-sufficiency for the micro-collectivities that are directly involved in the extractive sector, agriculture development, creating economic alternatives for women and children, educational development through high education initiatives instilling knowledge and know- how that will transform the nation from within. Without an authentic territorial approach including sustainable development initiatives the term resource curse might remain in our modern post-enlightenment cultures.