Part of the World Bank loans end up in tax havens

Text by: RFI Follow

A World Bank study reveals that on average 7.5% of money loaned to aid-dependent countries ends up in tax havens, and therefore in offshore, anonymous and private bank accounts.

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It is not the first time that the World Bank has examined corruption, but it is the first time that a quantitative report has established a correlation between the aid provided and an increase in remittances to tax havens. The 45-page study, entitled “Financial aid grabbed by the elites” , shows that when the World Bank lends money, there is systematically a peak in money transfers to tax havens or states that protect bank secrecy , like Switzerland and Luxembourg.

The document looks at 22 aid-dependent countries, including African countries such as Eritrea, Burundi, Guinea-Bissau and Sierra Leone, to name but a few. According to its authors, approximately 5% of the funds paid disappear in offshore accounts. This capital flight can sometimes reach up to 15% of the sums lent by the World Bank. The estimate, say the researchers, takes into account only financial transfers and does not include possible spending on property or luxury goods.

This report, very embarrassing for the World Bank, caused internal turmoil. The institution notably modified certain keywords. Thus, the “ causality ” link suggested by the researchers has become a “ correlation ”. Coincidence, correlation or cause and effect, the fact remains that the World Bank's chief economist, Penny Goldberg, left the door on February 5.

► Read also: A British territory put on the black list of EU tax havens

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• Economy
• world Bank

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