(NI) – August this year saw one of few precious victories in the fight against the offshore economy. A European Union special commission ruled that Apple Inc has been paying an illegally low level of tax to the government of Ireland…
Nearly 800 million people suffer from hunger in the world, mainly in the so-called “developing” countries. Now, in these countries, every year at least 250 billion euros in tax revenues disappear to tax havens – that’s 6 times the amount needed annually to fight and conquer hunger by 2025 (1).
“It is estimated that 85% to 90% of these assets [private funds invested in tax havens] belong to less than 10 million people – or 0.014% of the world population – and at least a third of those assets belong to the 100,000 richest families in the world, with each having at least 30 million dollars” writes US economist James S. Henry. It’s the wealthy who profit most from the reduction of tax revenues to fraud, which perpetuates and exacerbates inequalities.
This past Tuesday, India’s prime minister, Narendra Modi, made an announcement that the existing ₹500 and ₹1000 currency notes would cease to be legal tender. The result was widespread chaos. People rushed to ATMs to withdraw smaller denomination notes, or to banks to get the old notes exchanged. The lines were long (even resulting in scuffles and stampedes). The ATMs quickly ran out of cash, and banks failed to supply enough notes.
People were unable to shop for basic things such as groceries and food. An 8-year old girl died, because her father could not get her to the hospital, since the petrol pump attendant refused to accept a ₹1000 note (which is essentially paper now).
This is just a small fraction of the horror stories from across India. The government has reintroduced these notes with a different design and added a new ₹2000 note. But what was the wisdom behind this whole exercise and making people suffer so much? Here are the excuses given by the government.
Remember the Panama Papers leak..anyone?? If you do, then several African nations are amongst you. Obscure “customers” within their borders, according to leaks, were linked to offshore activities on the continent. Welcome to a new chapter of a forgotten scandal. It’s complete with inquiries pending and leaders questioned, topped off with journalists allegedly warned to stay away.
Mossack Fonseca, a firm center-piecing the Panama papers leak, sent business cards to several customers in Africa in 2010. According to ICIJ, the firm regarded the continent as “target territory”, filled with wealthy “customers”. However, since the leak–which outed everyone and everything from celebrities to military contractors–many of those customers have been questioned by African governments.
What steps did the London Anti-Corruption Summit make towards eliminating corruption?
On 12 May 2016, David Cameron hosted the Anti-Corruption Summit in London. This summit aimed to bring together world leaders to discuss ways to expose corruption, punish those responsible, and to eliminate institutionalized practices that encourage corruption. I previously wrote an article explaining why this conference was unlikely to result in meaningful reform. So far, many civil society organizations have claimed that the Summit was underwhelming and did not go far enough. However, some positive steps were taken and as a result, I believe that it is worth exploring the end result of this Summit.
In the days before the Anti-Corruption Summit, tension started to brew as David Cameron was caught on camera stating that “Nigeria and Afghanistan are possibly the two most corrupt countries in the world.” This was expected to cause problems as the Nigerian and Afghani presidents were high profile invitees to the conference. Fortunately, this faux pas appeared to have been forgiven and the summit was able to proceed in a cooperative manner. At the Summit, several commitments and provisions were agreed to and published in a communiqué. Some of these provisions are as follows:
On 12 May, 2016, many world leaders will meet at a summit in London to discuss corruption. The objective of this summit is to foster international cooperation for combatting corruption. Since this is occurring in the aftermath of the Panama Papers, the summit is coming at a very opportune time when this topic is still salient amongst the public. However, while this summit has noble objectives, many have expressed skepticism towards it.
On 8 May 2016 Downing Street published a statement from David Cameron about the summit. This statement, which recognizes the myriad of poverty and security-related problems that corruption causes, stated Cameron’s desire to formulate and implement the first global declaration against corruption and mechanisms for combatting it. In the process, David Cameron set lofty goals for international cooperation to engage in anti-corruption efforts. To this end, David Cameron invited many prominent heads of state to his summit, the agenda of which includes exposing corruption, punishing those responsible, and eliminating cultures of corruption. The British government has expressed optimism that this will lead to meaningful anti-corruption reform.
Still in business.