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Poverty and Corruption in Zambia

Poverty and Corruption in Zambia. Zambia’s Abundant Poverty. 60% of Zambians live below the poverty line Historical, Geographical, and Social Reasons for poverty Economic Decline, Neglect of Agriculture Sector, Limited Access to Services, Markets, and Technical Knowledge

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Poverty and Corruption in Zambia

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  1. Poverty and Corruption in Zambia

  2. Zambia’s Abundant Poverty • 60% of Zambians live below the poverty line • Historical, Geographical, and Social Reasons for poverty • Economic Decline, Neglect of Agriculture Sector, Limited Access to Services, Markets, and Technical Knowledge • Tremendous Copper Reserves • Africa’s biggest copper producer

  3. Problems With Privatization • Multinational Companies control Copper Mines • Illicit Financial Outflows • $8.8 billion lost between 2001 and 2010 • Two times Zambia’s annual Government Revenue in 2011, $4.3 billion • MCs move capital through western banks to avoid paying taxes on their profit

  4. Finding the Leak • Commercial Activities • Trade Misinvoicing: Companies conceal true value of exports/imports to avoid taxation • 2008 Incident: Zambia robbed of chance to double its annual GDP • Use of opaque network of subsidiary firms

  5. Effects of Illicit Financial Outflows • Incentivize Domestic Corruption and Undermine Good Governance • Ready-made channels to smuggle illegal gains • Harm Development • Loss of Government revenue inhibits investment in necessary services and infrastructure • Exacerbate Inequality • Undermine Sensible taxation policies

  6. Halting the Flow • A case of David combating Goliath • Natural Resource Giants: Glencore Xstrata • Multinationals poach best talent from Zambian Revenue Authority

  7. Cautious Optimistic Future • International Relief • G8 Summit • Punishing Those Facilitating Illicit Financial Flows • Making Voices Heard in Global Discussions • Representation to ensure fair global solutions

  8. For More Information • Jamie Pickering, Zambia’s Tangled Webs and Flows, available at http://thinkafricapress.com/zambia/not-going-flow-iffs-tax-justice-copper • Rural Poverty in Zambia, Rural Poverty Portal, available at http://www.ruralpovertyportal.org/country/home/tags/zambia

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