NEW YORK (Thomson Reuters Foundation) - Debt relief campaigners called on world financial leaders on Tuesday to find a global plan to improve budget transparency in developing nations and drastically reduce poverty while in talks this week ahead of a July summit.
Officials fromn the United Nations, World Bank, International Monetary Fund and finance ministries are meeting in New York to try to reach an agreement on how to finance growth in the developing world ahead of a major summit to be held in Addis Ababa in Ethiopia in July.
The third international Financing for Development conference will take place ahead of United Nations negotiations in September to finalize a set of Sustainable Development Goals that will mark a new era in the global fight against poverty.
Earlier this month, U.N. Secretary-General Ban Ki-moon suggested that financing was key for creating and unveiling an ambitious post-2015 development agenda.
Eric LeCompte, executive director of Jubilee USA Network, a faith-based group lobbying for debt relief in poor nations, said this was the time to shift the focus of financial growth onto the developing countries themselves.
“This is a rare opportunity to create a binding global plan to drastically diminish poverty in our lifetime,” LeCompte said in a statement.
“Lending, borrowing and budget transparency is key ... Adopting responsible lending and borrowing raises billions of dollars and costs nothing.”
LeCompte said developing countries were “hemorrhaging money”, pointing to a recent report from researchers Global Financial Integrity that found for each $1 of aid received, more than $10 in illicit financial flows left a developing country.
Illicit financial flows include money lost through corruption, tax evasion and crime.
He said transparency was the cure for the corruption that costs the developing world almost $1 trillion a year, citing a figure from the report by the Washington, D.C.-based non-profit organization.
LeCompte said he expected the world’s wealthy nations, which are continuing to experience an overhang from the 2008 financial crisis, will reduce foreign aid so developing countries needed to stop these illicit flows if they were to address poverty.
“The Financing for Development outcomes can curb corruption, tax evasion and unsustainable debts in the developing world,” LeCompte said.
“If we succeed in changing tax, trade and debt policies, we can raise trillions of dollars to address poverty.”
Reporting By Leslie Gevirtz