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Illicit financial flows (IFFs) such as tax evasion are a major policy challenge for developing and emerging economies, in particular as the COVID-19 pandemic has drained domestic resources. This report presents results from a joint project between the OECD and the National Treasury of South Africa, which assesses tax compliance and IFFs in South Africa.

FEUTURE Online Paper No. 9 This paper focuses on the role of financial flows in the future of EU-Turkey relations. The size of financial flows has increased along with increasing integration between EU and Turkey. In this process many macroeconomic variables in Turkey have been significantly influenced by the movements of financial flows through assets and credit channels. The movements of financial flows can be significantly affected by the tone of the relations between EU-Turkey. Especially, under the assumption that EU stabilizes itself, in a world in which global liquidity evaporates, Turkish policy makers cannot afford the conflict scenario. Even in a world of a high global liquidity, the possibility of financial reversals creates huge uncertainty and a potential high cost for the Turkish part. Therefore, focusing on the role of financial flows, under normal conditions, Turkey EU relations are destined to evolve into either convergence or cooperation options. Further-more, the vulnerability of Turkish economy to financial flows can increase the leverage of Europe on Turkey. Turkish authorities should find ways to decrease the sensitivity of the economy to the flows in order to increase their negotiation power in the process. ; This project has received funding from the European Union's Horizon 2020 research and innovation programme under grant agreement No 692976. This publication reflects the views only of the authors, and the Commission cannot be held responsible for any use which may be made of the information contained therein.

After decades of billion dollar scandals around long-serving dictators removing vast fortunes from their impoverished nations, the broader phenomenon of which this is part has acquired a label: Illicit Financial Flows (IFFs). The term encompasses the international transfer of moneys generated by bribery, tax evasion and illegal markets. IFFs have been the object of much attention from high level bodies such as the G20 and G7. The purpose of this Note is to develop a better understanding of the drivers of the phenomenon itself in terms of governance and also of the governance challenge in trying to reduce IFFs. It deals with the distribution of power as a factor in both aspects. The discussion does not examine the drivers or consequences of the activities that generate most IFFs, such as bribery and tax evasion. Thus a statement that IFFs from criminal earnings does not affect development institutions is not a statement about the adverse effects of a large criminal sector, which may indeed have very serious economic and development consequences. The paper deals only briefly with the contested issues of definition and measurement. This paper has been relentlessly speculative that reflects the state of understanding of the IFF phenomenon. For reform efforts, a good understanding of the governance issues and the obstacles to aligning the interests and capacities of the many participants is crucial.

Every year, the government in Uzbekistan forces up to a million of its own citizens to pick cotton without pay. Uzbekistan's cotton industry is crippling the economy, degrading the environment, and creating tensions between Uzbekistan and its neighbors. Given these problems, why does the government of Uzbekistan persist with this abusive and antiquated system? In the context of the hyper-authoritarian system of government in Uzbekistan there are two answers: because the government can and because it profits handsomely from doing so.In order to challenge forced labor in Uzbekistan, advocates and policymakers need a deeper understanding of how the cotton industry works. A new report produced by the Open Society Foundations contributes to this understanding and offers tools and analysis that can help in the planning and financing of major reforms. Uzbekistan's Cotton Sector: Financial Flows and Distribution of Resources provides new insights into how a small circle surrounding President Islam Karimov's government realizes huge profits by ignoring human rights and keeping a centralized business alive.The paper uses data and analysis about the costs of the cotton production system to produce recommendations for allowing farmers and markets to work. This includes strategies for de-monopolizing agricultural service industries such as seed and fertilizer suppliers and cotton gins.