draining development.pdf - Khazar University

Introduction and Overview: The Dynamics of Illicit Flows 5attracted a great deal of media attention. Beyond one that is much discussedin this volume (Kar and Cartwright-Smith 2008), it has also publishedstudies showing the importance of these flows to specific countriesand regions (on Africa, for example, see Kar and Cartwright-Smith 2010).However, as with the estimates in Baker’s book, popular accounts generallyignore the caveats attached to the estimates in favor of the raw numbers.Though several contributors to this volume have raised questions aboutthe validity of the current estimates, there is no doubt that these numbershave helped galvanize attention on illicit flows and ways to deal with them.In addition to the work mentioned above, there has been a steady flowof reports from organizations such as the Tax Justice Network (forexample, TJN 2007) and Christian Aid that focus, in particular, on therole of contracts involving multinational corporations. These contractshave apparently allowed the exploitation of natural resources by the corporationsthrough failure to specify properly the price at which the gold,timber, and so on is to be exported from developing countries. Thetransfer may be legal, but, it is often alleged, the underlying contract isthe result of corrupt dealings between officials and the multinationalcorporations; the flows are thus appropriately classified as illicit.One disappointing note is that, since the appearance of Baker’s volumein 2005 to broad acclaim, our volume is the first substantial attemptto address the issue from a scholarly perspective. Of the over 100 GoogleScholar citations to Capitalism’s Achilles Heel, none is from a major academicjournal. 3When this volume was in final preparation, an odd affirmation of thereality of IFFs appeared fleetingly on the Internet site of the Bank ofChina. 4 The headline-catching sentence was as follows:According to a research report published by the Chinese Academy of SocialSciences, since the middle of the 1990s, the overall number of the escapedParty and Government cadres, officials in the judicial and public securitybranches, senior-level administrators in the state-owned enterprises, aswell as staff in the Chinese institutions stationed abroad, added up to16,000–18,000, and these corruptors have taken with them around RMB800 billion (circa US$100 billion).The report then detailed many major cases, identifying not only theoffenders, but also the methods that they had used to move the money