Jersey Finance today published a research report which concludes that, far from killing 1000 babies a day as recent Christian Aid reports alleged, global trade actually saves the lives of up to 5,000 children every day.

The report – “Transfer mispricing and child mortality” – by Richard Teather, Senior Lecturer in Taxation in the Bournemouth University Business School, reviews two reports published by Christian Aid into transfer pricing and child mortality and concludes that the data contained in the two studies is flawed. His research completely undermines the validity of Christian Aid’s claims that “illegal, trade-related tax evasion alone” is responsible for the deaths of 1,000 young children every day, and instead concludes that global free trade has in fact had a hugely beneficial impact on poor countries.

Commenting on the publication of the report and on the previous findings of Christian Aid’s reports on the issue, Richard Teather said:

“Much of the debate on the subject of international trade and tax “mis-pricing” is based upon well meaning but fundamentally flawed studies which should not be used as the basis for the development of policy. The methodology and assumptions used to analyse the trade data are biased, and artificially inflate the scale of any mispricing.” 

He continued: “Far from being a major source of child death, the sort of multi-national transactions criticised in these reports are potentially a major factor in reducing child mortality, lifting half a billion families out of poverty.”

Jersey Finance commissioned this research in order to increase understanding of the issues involved in transfer pricing, to promote an open debate based upon a rigorous and dispassionate analysis of the facts on what is an increasingly important subject and to examine allegations that financial centres such as Jersey are somehow implicated in child mortality. This debate has been given added significance by the interest of global policy makers in this area following the global financial crisis. The purpose of this report is not to attack Christian Aid, but is simply analysing the robustness of the data used to calculate alleged losses resulting from transfer mispricing. 

Ends.

For further information,

Aura Financial
Michael Oke / Andy Mills
Telephone: +44 (0) 207 321 0000