New report links child hunger to global financial corruption

New research published by Results UK to mark World Health Day calls on the UK to meet its responsibilities to the countries most affected by child undernutrition. The report found that these countries experience at least $310bn in trade-related illicit financial flows (IFFs). And it says the UK must transform its response.

Trading Hunger: How tackling illicit financial flows can help to overcome child undernutrition argues that the UK is allowing the countries most affected by child undernutrition to be harmed by IFFs.

Not only is the UK government doing far too little to support these countries directly and in global forums, it is failing to take action domestically to end the UK’s status as a hotbed for illicit finance.

Countries lose billions to corruption

The report conservatively estimates that 20 of the countries most affected by child undernutrition experienced at least $309.8 billion in trade-related IFFs in 2024. It further estimates that government revenue losses from trade-related IFFs amount to 86.3% of India’s and 65.1% of Nigeria’s domestically funded public health spending in 2023, respectively.

Tackling these and other IFFs would generate substantial resources for Global South governments, which would enable them to address child undernutrition more effectively.

Domestically, the UK government must strengthen financial transparency to prevent illicit money from undermining the integrity of Global South economies. First and foremost, it should force the British Overseas Territories and Crown Dependencies to establish comprehensive public registers of beneficial ownership.

It should also ensure HM Revenue & Customs publishes data on wealth held by foreign nationals in UK financial institutions that can be used by all foreign authorities to crack down on IFFs.

UK response undermined by cuts

In addition, Global South governments need, and are calling for, direct support to combat IFFs. However, the UK government’s cuts to official development assistance (ODA) mean that its funding for this work is in danger.

One area in which the UK can assist these governments relates to strengthening legislation and regulations targeting IFFs. Although it is vital to protect whistleblowers and civil society.

Another area is increasing the capacity and coordination of customs, tax, financial intelligence and law enforcement authorities in Global South countries. For example by investing in digital technologies and in joint risk assessments.

At the global level, the UK must reverse its current oppositional stance, and support a United Nations (UN) Framework Convention on International Tax Cooperation. The UK should also advocate for a UN coordination and oversight mechanism on IFFs.

The world needs legitimate, effective and accountable governance structures to combat IFFs, rather than the current unequal, unsuccessful and fragmented system.

Child hunger symptoms getting worse

Undernutrition is devastating for affected children and costs trillions of dollars in lost economic productivity. Yet the prevalence of wasting (ie low weight-for-height) has barely changed in recent years while the prevalence of stunting (ie low height-for-age) has actually increased.

The report demonstrates how this is happening despite the existence of extremely cost-effective child nutrition interventions. It is unacceptable that a lack of funding, driven in large measure by damage caused by IFFs, means that real-life nutrition success stories cannot be scaled up or strategically replicated in other contexts.

Sunit Bagree, author of the report for Results UK, said:

The UK lies at the centre of a web of financial secrecy and theft. The UK government must use its ongoing vice-presidency of the Financial Action Task Force, as well as upcoming opportunities starting with the UK-hosted Illicit Finance Summit in June, to fulfil its promise to support Global South governments in increasing their domestic revenues.

Forcing British Overseas Territories and Crown Dependencies to establish comprehensive public registers of beneficial ownership is the best way of stopping them from facilitating illicit financial flows.

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Ensuring the Financial Conduct Authority is adequately resourced to meet its new duties for anti-money laundering supervision will crack down on the professional enablers who drive the UK’s £100bn-a-year money laundering problem.

These steps would particularly help the countries worst affected by child undernutrition to generate funds to invest in proven interventions in line with the Sustainable Development Goals.

Rosemary Mburu, executive director at pan-African advocacy organisation WACI Health, said:

We urge the UK to boost its support for the Global South to tackle illicit finance. Building the capacity and coordination of African authorities, in the context of rights-based legal and regulatory frameworks, would help them to detect and punish offences, deter and reduce illicit financial flows, and increase the recovery and repatriation of stolen assets.

It is also hugely important for the UK to now back African efforts to create a fairer global tax system through a UN tax treaty and to advocate for the UN to be at the centre of global decision-making on illicit finance. This will ensure global economic governance becomes far more inclusive, results-orientated and accountable.

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Countering illicit financial flows is in the security and economic interests of all countries. Genuine partnerships among nations can see the battle against illicit finance translated into sorely needed investment in child nutrition.

Featured image via the Canary