TIPS - Janet Wilhelm - Results from #650

13 January 2021

Illicit financial flows and industrial development in South Africa: A discussion of policy options

This policy brief provides a broad introduction to illicit financial flows (IFFs), some key IFF mechanisms, and how these flows serve to undermine industrial development, particularly in developing countries. IFFs are usually connected to tax havens, and serve to maximise income for a handful of people while eroding the tax base, undermining government capacity and harming industrial development. There is strong evidence to suggest that IFFs are happening at significant scale in South Africa. This is likely to have a negative effect on the country’s existing industrial base and industrialisation efforts via a number of channels that require policy attention. Government departments and agencies with the authority to act on these illicit channels, including via industrial, competition and procurement policy, need to develop the capacity to do so. The brief concludes with recommendations of industrial policy measures that can be implemented to limit the extent and impact of illicit financial flows on industrial development in South Africa.

This policy brief is based on the Working Paper Illicit financial flows, tax havens and industrial development in South Africa. It can be accessed at the following link: main report.

Published in Policy Briefs

Topic:

11 January 2021

Just Transition Finance Roadmaps in South Africa and India: Project launch 19 January 2021

Presentations

Nick Robins, Professor in Practice – Sustainable Finance, Grantham Research Institute, London School of Economics: Just Transition Welcome and Introduction

Media

ESI Africa 20 January 2021: How to finance the just energy transition in South Africa and India

Engineering News 19 January 2021 Terrence Creamer: Project launched to define role of finance in South Africa and India's 'just transitions'

Background

Ensuring the transition to net zero and resilient economies is just and inclusive has never been more important as climate action builds momentum and the urgent need for a green and just recovery from COVID-19 arises.

South Africa and India, two of the largest coal-dependent emerging economies, are beginning to explore how to ensure no one is left behind in the transition, particularly in coal-dependent regions, and the most vulnerable can access emerging opportunities including new quality jobs in net zero sectors.

It is clear that financial institutions have a critical role to play in helping achieve a just transition in both countries - more practical guidance is now needed to signal where financing is needed and how it can be enabled by specific policy, market and regulatory mechanisms.

The Just Transition Finance Roadmaps in South Africa and India project will build on existing local processes and encourage tangible action, particularly on the road to COP26. The following partners are involved: Trade & Industrial Policy Strategies, National Business Initiative, Observer Research Foundation, LSE Grantham Research Institute on Climate Change and the Environment, and Harvard Kennedy School’s Initiative for Responsible Investment, with support from the National Institute of Public Finance and Policy.

This project has been catalysed with funding from CDC Group.

Agenda

14.30-14.40 Welcome and Project Launch: Nick Robins, Professor in Practice – Sustainable Finance, Grantham Research Institute, London School of Economics

14.40-14.50 Fireside chat: Nick O’Donohoe, Chief Executive Officer, CDC Group in conversation with Nick Robins

14.50-14.55 Opening remarks: What is the role of finance in enabling a just transition in South Africa? Joanne Yawitch, Chief Executive Officer, National Business Initiative

14.55-15.00 Opening remarks: What is the role of finance in enabling a just transition in India? Rathin Roy, Managing Director - Research and Policy, Overseas Development Institute

15.00-15.35 Panel discussion

Moderator: David Wood, Director of the Initiative for Responsible Investment , Harvard Kennedy School

• Amal-Lee Amin, Climate Change Director, CDC Group
• Rudi Dicks, Board member, Trade & Industrial Policy Strategies
• Royston Braganza, Chief Executive Officer, Grameen Capital India

15.35-15.55 Q&A session

15.55-16.00 Closing remarks: Suranjali Tandon, Assistant Professor, National Institute of Public Finance and Policy