Dear Editor,
The recent letter of former Ambassador Kenrick Hunte that “EEPGL and auditors should explain why total revenue is included in the PSA’s cost function” (SN 4 Oct 2022) offers considerable detail on mechanisms associated with Illicit Financial Flows (IFF) as capital flight from developing countries. An extensive literature exists on this subject, and it is one with which the African, Caribbean & Pacific (ACP) Group of States has consistently grappled.
In June 2022, the UN Economic Commission for Africa (UNECA) estimated that more than $84bn is lost in Illicit Financial Flows (IFF) from Africa each year. (https://african.business).
Ambassador Hunte’s letter, along with details of the cost function analysis, also stated that “EEPGL will have the advantage of imputing costs through transfer pricing, among other avenues to claim revenue disguised as costs” (my emphasis in bold).
There seems to be merit for research to be done, if not already ongoing, to determine the extent to which and the associated amounts (“losses”) related to “transfer pricing” in respect of investments in the oil and gas sector, as well as gold mining and timber industries in Guyana.
Perhaps this is a task to be undertaken by the University of Guyana, in collaboration with UN ECLAC, which I recently read, has done related work on Foreign Investment in Trinidad & Tobago.
The results could enhance the share of wealth for the people of Guyana from the extractive industries.
Sincerely,
P.I Gomes
Former Secretary-General,
OACPS.
