Tom Cardamone is Managing Director of Global Financial Integrity
“The economy, stupid” is a phrase well-known to any student of American politics. As a rallying cry for the campaign of a little-known presidential candidate from Arkansas, its constant refrain during the summer and fall of 1992 helped put Bill Clinton in the Oval Office.
For European policy planners focused on the continent’s current immigration challenge it is a phrase that should be the front and centre of their efforts to bring about a long-term solution. However, it is not Europe’s economy that should be in focus, but Africa’s.
With approximately 700,000 asylum applications in 2017 alone, European governments have been under tremendous pressure to find the delicate balance between humanitarian concern and the practicality of caring for hundreds of thousands of people who have fled hunger and civil strife. The task of providing asylum for those who qualify and returning those who do not – while conducting the repatriation process with dignity and care for the returnees – has been fraught with numerous difficulties. The European Commission has taken strides to assist the return of people to the Horn of Africa with the creation of the EU Emergency Task Force for Africa. But at current funding levels of about €3.3 billion, the task force only addresses some of the symptoms but not the long-term systemic issues needed to handle an even greater number of refugees and asylum seekers in the future.
While the immigration challenge may seem severe now, it could be even worse in the coming decade
Indeed, while the immigration challenge may seem severe now, it could be even worse in the coming decade due to a confluence of economic factors facing Africa. These include a chronic and corrosive flow of illicit money out of the continent estimated at $70 billion per year; the World Bank’s predicted slowing of economic growth in the region over the next decade to a flat 4.3% annual rate; an infrastructure deficit estimated by the World Bank at $93 billion per year which limits economic progress, and the burgeoning job-seeking youth bulge with 70% of the population under 30 years old and growing. Individually, any of these issues and their collateral economic impacts will put huge pressures on the population which can result in increased migration. Taken together, and occurring concurrently with mounting “high water stress” and the degradation of democratic institutions in many nations, these factors could be a migration time-bomb.
Fostering job creation and economic development in Africa is the foundation needed to reduce the likelihood of massive immigration into Europe in the coming decade. In an interview with a French-language magazine last August, the Chadian Foreign Minister was succinct in his assessment of the situation when he noted that so many young people emigrate “because they flee misery, unemployment and lack of prospects”.
Fortunately, while the situation is dire, the challenges are not insurmountable. European governments have a path forward if there is a willingness to embrace innovative efforts to foster global development.
Primarily, the European Commission, in concert with the World Bank and the UN Economic Commission for Africa, should attack the illicit fund flows problem as if it is an existential threat to the continent – because it is. If just half of the estimated illicit funds now leaving Africa annually were to be captured, that money could be allocated ‒ in the case of collected taxes and fees ‒ to needed infrastructure projects, and the remainder could be churned through the economy to create demand for more workers who are readily available.
To achieve this, monetary assistance should be provided to improve the ability of customs departments to detect when goods are misinvoiced since the use of trade is the principal way illicit funds leave a nation’s economy. Little to no international focus is currently being put on this spigot for illicit money.
If just half of the estimated illicit funds now leaving Africa annually were to be captured, that money could be allocated to needed infrastructure projects
This assistance must be coupled with agreements to implement procedures to increase the probability that the newly-captured funds will not be diverted and to reduce the illicit flow of new money out of the economy.
Specifically, multi-agency government task forces must be established in each recipient country to share information and target the sources of illicit funds. Based on a very successful Australian model dubbed ‘Project Wickenby’, these whole-of-government teams will send a signal that impunity will not be tolerated. Additionally, independent investigative bodies modelled on the International Commission against Impunity in Guatemala (CICIG) must be established to battle organised crime and grand corruption. This well-funded unit, which is headed by a legal expert from outside Guatemala, has been an effective tool to root out fraud that, in some cases, led investigators to the highest levels of government. Last, guidance must be provided on statutory and regulatory changes each government in the region should implement in order to improve its financial and budgetary transparency.
So that these new institutions are not seen as unfunded mandates put upon African countries by Europe, funding to facilitate their creation and operation should come from the Commission and the international community. This approach is not for the faint-hearted or impatient, however. It will take time and money before progress is detected but this effort will go a long way to providing a reason for potential emigrés to stay in their homeland.
As the Foreign Minister from Chad cautioned last year, “The needs of the continent are huge, and unfortunately one or two billion euros will not change the situation.”
IMAGE CREDIT: ECHO/M.Eick April 2011/Flickr