Africa – Global Pirates Vs. Tax Justice
A new report from the Tax Justice Network estimates that the global super-rich have at least $21 trillion in secret tax havens, the equivalent of the United States and Japanese economies combined. While these estimates presumably include funds such as those held by Mitt Romney in “offshore” accounts in the Cayman Islands, they also include as much as $944 billion estimated last year to be derived from capital losses to Africa between 1970 and 2008.
And a report from a High-Level Panel sponsored by the African Union, Illicit Financial Flows from Africa: Scale and Developmental Challenge, announced recently but not yet published (see http://tinyurl.com/clvch9b) estimates that Africa loses as much as $1.5 trillion in illicit financial flows each year.
All such figures are of course estimates, with secrecy and incomplete data making more precise calculations impossible. But there is no doubt about the astounding order of magnitude of sums hidden from tax authorities of developing and developed countries alike. The entire process is facilitated by a “pirate” network dominated by the world’s leading banks and related financial institutions, and by consistent failure of governments in both rich and poor countries to enforce anti-money-laundering regulations that in theory are supposed to prevent such transactions.
In other words, Africa’s capital losses, which by far exceed the international debts on the books of African countries or the official development assistance provided to Africa, are part of a more general pattern which pervades the international financial system.
This AfricaFocus Bulletin contains a press release and a memo on key issues from the report “The Price of Offshore Revisited,” released late last month. The full report and other related material is available http://tinyurl.com/9bp73wq and on the websites of the Tax Justice Network (http://www.taxjustice.net and http://www.tjn-usa.org).
For additional commentary on this report, see the Democracy Now interview with author of the study James Henry, video and transcript at http://www.democracynow.org / direct URL: http://tinyurl.com/cma8u5q
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