Address by Deputy Minister of Foreign Affairs of the Russian Federation Aleksandr Pankin at G20 Development Working Group Ministerial Meeting on illicit financial flows (IFFs) and social protection, Skukuza, 25 July 2025
25 July 2025 17:39
1257-25-07-2025
Distinguished Mme.President, dear colleagues,
We extend our gratitude to South African friends for a well-thought choice of topical issues. Illicit financial flows and social protection represent major present-day challenges.
As part of the implementation of the SDGs we promised to focus the efforts on human needs, «make sure nobody is left behind». A task was set to eradicate the inequality in development level between the countries. In this context, partnership between the donors and recipients and the reform of world economic institutions in favour of developing states are in our focus.
We acknowledge with regret that strategic targets have not been implemented into practical results. Certain positive developments of recent years, by that I mean the rise of the multipolar world and emergence of new centres of growth such as BRICS, faced the confrontational position from the West.
Dominating elites leave fair economic competition in the past. Instead world's economic system turns into an arena for confrontation, blackmailing, dictate and political pressure. Donors' obligations, such as the developed countries' allocation of 0.7 percent of GDP to the development goals or 100 billion USD to support the climate actions, are not fulfilled and get sidelined. The poorest states are now proposed to rely on their domestic material resources while discriminatory external environment remains unchanged.
Achieving SDGs benchmarks by 2030 apparently stumbles, progress forecasts are most discouraging. African countries are among the most vulnerable. Former colonizers are trying to restore their dominance on the continent with new methods - through deepening dependence on donor aid and enslaving loans.
The volumes of so-called "aid" that reach the states in need are significantly lower than the losses caused by illicit financial flows (IFF). According to UNCTAD, in Africa the IFFs reach 50‑90 billion USD yearly, while donor funding is no more than 60‑65 billion USD. Mining industries, where the Western transnational corps are rooted, are the most threatened ones. The money flows into the pockets of Western elites depriving the African governments of the resources they need for economic diversification.
We consider combatting the IFFs as key element of world economic stability. We note the unprecedented increase of scale and sophistication of financial schemes, especially those involving illegal online operators. Cryptocurrencies became a popular tool for concealing the source of funds and their cross-border transfer - they are part of over 75 percent of illegal schemes. In 2024, in Russia alone, over 1,300 web pages involved in illegal financial activities were blocked.
Virtual assets are increasingly often exploited by terrorist and organized criminal groups. Some countries deliberately use them to interfere in domestic affairs of sovereign states to incite hatred.
The IFFs can only be successfully countered through fair and open international cooperation, including in the areas of taxation and anti-corruption. A particular impetus should be given to the retrieval of assets. However, the West is persistently politicizing relevant multilateral formats, thus undermining cooperation. Biased anti-Russian steps of suspending Russia's membership in FATF and Egmont Group disrupted the integrity of global network of combatting the money laundering and rendered a number of international financial investigations impossible. The EU is ready for plain pillage - seizing foreign sovereign financial assets frozen in their jurisdiction.
The world majority needs to bolster its financial independence, establish control over capital circulation by reducing the dependence on unreliable West‑centric financial architecture. Promising initiatives are being discussed in BRICS, including those on cross-border payments and joint depository, payment and clearing infrastructure (BRICS Clear). We shall continue to strengthen the sovereignty of Global South in all aspects.
Access to social services is one of the fundamental human rights. However, almost half of planet's population is deprived of it. Such is the legacy of colonialism: while the Golden Billion enjoys almost universal basic social protection, in poorest countries barely 10 percent of population has access to it.
Developing economies are critically limited in their options to form the material basis for improving social support. Primary obstacle in this area is the subordinate positions (particularly vulnerable in the context of market and geopolitical volatility) in world's division of labour which is imposed on them.
Due to lack of a system of equal access to benefits, dependence of Global South on Western donor aid is increasing, while the volumes of external assistance are dwindling - they are reallocated for military spending, under the pretext of imagined threats, and for fuelling the conflicts. This is also the case for international development banks: while during the pandemic the World Bank allocated 12.5 billion USD as emergency funds for social welfare, at the same time, since February 2022, it granted astronomical 81 billion USD to Ukraine.
Development aid must be depoliticized, predictable and based on national priorities of the recipients. Setting out various pre-conditions for recipients of funds, including questionable climate and gender aims, is unacceptable.
Social protection is a long-term investment into the future. Russia is ready to share with all partners its expertise in building the national social welfare system and mobilizing tax revenues, including advanced digital solutions.
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