Dear Prime Minister,

The Leading Group on Innovative Financing for Development composed by 59 member countries and several International Organizations and NGOs, held its Seventh Plenary Meeting in Santiago, under the Presidency of Chile, with the Permanent Secretariat of France. In the Plenary the work of the group was reviewed. It has contributed to raise more than two billion dollars for development. In the health sector alone such funds have helped vaccinate over 100 million children. Stable, predictable and complementary to traditional ODA, these additional resources for development are a critical component of poverty alleviation and social progress. I enclose the Declaration of Santiago issued by the Group.

I am writing to ask that you consider, within the context of the upcoming G20 meeting in Toronto, additional efforts to promote development. It is estimated that illicit money leaves developing countries each year in an amount several times ODA. This outward flow of capital greatly hampers economic progress across the globe. By instituting policies to curtail this flow, the G20 would go a long way in unleashing these hidden resources for development.

We acknowledge the very positive and strong statements regarding poverty alleviation made by the G8 and G20 countries at recent summits. Additionally, in L’Aquila, the G8 pointed to the challenges posed to economic development by illicit financial flows out of poor states. In London, on April 2, 2009, the G20 nations claimed that “the era of bank secrecy is over.”

While everyone applaud these ideas, neither the G8 nor the G20 has made explicit the connection that secret bank accounts in tax havens and other uncooperative states facilitate the flow of illicit money out of developing countries thereby exacerbating poverty. We would welcome that the G20 nations do move further and consider at its forthcoming communiqué language indicating that this linkage exists.

Mr. Prime Minister, on your Presidency of the G20 we are hopeful that it will be undertaken this step to address the development and human rights implications of massive amounts of money flowing out of poor nations each year. Slowing the outward flood of capital will greatly improve the lives of millions of people.

Looking forward to your leadership on this issue of global importance.

Sincerely yours,

Ricardo Ffrench-Davis,

Chairman of the Seventh Plenary Meeting of the
Leading Group on Innovative Financing for Development
Santiago de Chile, January 29, 2010