May 11, 2016
The price the global South in particular is paying in the form of undermined growth and development prospects, as a result of ‘Black Money outages’ or financial resources that are drained out of it by illegal means, is disclosed in the contents of the Panama Papers, which documents are now public knowledge. This issue is, rightly, highlighted by sections concerned with good and transparent governance as a foremost development problem for the world’s poorer countries. This is not to discount the importance of the issue for the global North.
Depositing one’s moneys in international banks, offshore financial institutions and the like, does not in itself constitute an offence but it becomes one if local taxes are not paid for such income; that is, if the paying of taxes for such financial wealth is evaded by the holder of these moneys. Likewise, commissions and kickbacks earned by individuals belonging to a country, while engaged in financial transactions on behalf of their state, qualify for the label of ‘Black Money’ and illegally earned and owned wealth, if such moneys are not disclosed to the state authorities concerned but are secretly stashed away in overseas financial institutions and invested in fake, anonymous business bodies abroad, for instance.
The latter type of money laundering exercise is also resorted to by criminal outfits engaged in a plethora of illegal activities, such as, drug and human trafficking. All such’ ill-gotten gains’ constitute ‘Black Money’ or finances which are undisclosed to state fiscal authorities.
Over the past two or three decades, ‘Black Money outages’ from particularly the economies of the South are said to have assumed staggering proportions. Such illegal outflows of moneys are said to be occurring in some of the foremost of ‘emerging economies’, such as China and India. Some Sri Lankans too have won ‘honourable mentions’ among international ‘Black Money’ outlaws, indicating that Sri Lanka too is a notable ‘Black Money’-afflicted country.
Cash-strapped countries, such as Sri Lanka, cannot afford to be complacent about the ‘Black Money’ syndrome because, more often than not, they are compelled to resort to emergency loans to see them through. This is not to imply that major Southern economies could afford to turn a blind eye on the problem either. Needless to say, these foremost Southern economies would do even better in economic performance if a halt could be put to the outflow of ‘Black Money’. State authorities have no choice but to wield the big stick to halt this process of impoverishment.
International development organizations, such as the UN, are yet to highlight the ‘Black Money’ issue in a major way. The UN has done well to make the transition to Sustainable Development Goals from Millennium Development Goals but it is not clear whether it has factored in ‘Black Money’ as a major obstacle to development. It would be in the interests of the world community for the UN to take up this issue in a major way and to call for a cooperative global effort to defuse the ‘Black Money’ scourge.
This undertaking could prove a thorny thicket for organizations such as the UN. This is because some of the biggest ‘Black Money’ perpetrators are political strongmen and their supportive sections. That is, major elements among some national governments are party to the process of swindling their countries of financial resources. However, justice must be done on this score and making even the most prominent government leaders accountable on these questions is something the UN cannot avoid.
At the time of writing the London Anti-Corruption Summit, with the participation of some government leaders and other relevant quarters, is being held and this is cause for comfort among those sections battling global corruption. However, the Summit would need to ensure that there would be no bar for the removal from public office of those found guilty of corruption.
Meanwhile, it is relevant to realize that it is political and social elites worldwide that are at the heart of corrupt practices in the public sphere. To be more precise, it is what is referred to as the Transnational Capitalist Class (TCC), at the helm of political power almost everywhere, that is the prime mover in the amassing of wealth by powerful sections, through sleaze and kickbacks.
The above are some the grosser irregularities of economic globalization, which are going unchecked. Economic liberalization which proliferated in tandem with globalization in its many dimensions, was expected to be a great leveler of economic opportunities and earning capabilities, but it is mainly the political and social elites everywhere that are gaining by it. And to the extent to which the TCC is enriched by them, the more questionable features of economic globalization, such as opportunities to acquire unaccounted for wealth, will be perpetuated by the TCC and its supportive sections.
Accordingly, a prime issue for the international community, headed by the UN, is to evolve the legal and accountability systems which could help in checking corruption in particularly ‘high’ public places worldwide. Considering the near helplessness of publics everywhere, this challenge must be squarely met if even a dent is to be made in the corruption millstone. If not, it will be a question of the powerful and rich progressively consolidating their positions at the expense of the ‘ordinary people’.
The Panama Papers revelations, then, are further evidence that ‘Black Money’ is a principal stumbling block to development. When this commentator says this, he does not have in mind the global South or the developing world only. He has in mind the lesser economic players of the West as well, that are not proving success stories in the current global economic environment which is highly volatile. The ‘ordinary people’ the world over are the sole victims of such fluidity.
Such iniquities would thrive to the extent to which the ill gotten gains of the corrupt are not detected and acquired for tax purposes by democratic governments and those at the bottom of these sleazy operations are allowed to operate freely. Accountable governments have no choice but to crack the whip hard on these scourges of the ‘free market’.
2016-05-11
