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Issue 11 Vol I, March 15, 2006 features Where
do the Rich Hide their Illicit Cash?
If you believe that there is slush money all around in India, then what could be the state of affairs at the international levels where big business operates with impunity. London’s leading newspaper, The Observer quoted a study that said, “ The world's richest individuals have placed $11.5 trillion of assets in offshore havens, mainly as a tax avoidance measure. The shock new figure - 10 times Britain's GDP - is contained in the most authoritative study of the wealth held in offshore accounts ever conducted.” The study, by Tax Justice Network, a group of accountants and economists concerned at the escalating wealth held in offshore locations, shows that the world's high-net-worth individuals earn $860 billion each year from their assets. The $11.5trn does not include the vast amount of money stashed in tax havens by multinational corporations, which are using increasingly sophisticated techniques to run rings round the authorities.
Raymond Baker is a committed capitalist whose book, Capitalism's Achilles Heel, has already made waves in America and the entire West. He has vast experience as top class businessman and has seen the world of business from inside the capitalist world. Baker has worked in Britain with the Tax Justice Network that seeks to expose the abuse of tax havens and loopholes. He has drawn large audiences across America and Europe who cheer him all the way. This has truly earned him a celebrity status and rave reviews in world-class newspapers and magazines. Raymond Baker, after a long career in international business, is a guest scholar at the Brookings Institution and a senior fellow at the Center for International Policy, both in Washington DC. He appears often on television and radio in the United States and overseas and testifies before House and Senate committees. When we discuss corruption among politicians and officials in Asia and Africa or even Europe and America, the amount is trifle compared with the rich companies and individuals who use the world's tax havens and banking systems to hide sums of money that could address almost all of the financial needs of the world. Even if half of that money is spent on development, poverty would a thing of the past. Baker who believes that capitalism is "the greatest economic arrangement ever devised," accuses western governments and banks for failing catastrophically in their duty to police the system. For over four decades and 60 countries, Baker has been a witness to the free-market system operating illicitly and corruptly, with disturbing results. Capitalism’s Achilles Heel is a fascinating journey through the global free-market system. It shows how dirty money, poverty, and inequality is inextricably intertwined. We discover how small illicit transactions lead to massive illegalities and how staggering global income disparities are worsened by the illegalities that pervade capitalism. Drawing on his experiences, Baker shows how Western banks and businesses use secret transactions and ignore laws while handling some $1 trillion in illicit proceeds each year. Businesspeople, criminals and plutocrats have perfected the techniques to shift funds and how these tactics negatively affect individuals, institutions, and countries. Iraq is the latest example where American taxpayer’s money meant for welfare and development has reached somewhere else. "Falsified pricing and secrecy structures and the illicit movement of trillions of dollars out of developing and transitional economies break the social contract ... that Adam Smith incorporated into the core of the free-market system," Baker writes. Six out of 10 U.S. corporations pay no tax, and the recent Enron scandal [Indians remember it very well] demonstrated how cynically major household names in the U.S. exploit the system. Enron used around 800 different "Caribbean financial dumps" to hide its debts. "Laundered proceeds of drug trafficking, racketeering, corruption and terrorism tag along with other forms of dirty money to which the U.S. and Europe extend a welcoming hand," Baker concludes. More than 50 per cent of the cash holdings of rich individuals in Latin America is now held offshore and that some 30 per cent of the GDP of sub-Saharan African nations disappeared offshore in the second half of the 1990s. The situation in the Middle East and North Africa is even worse. Since the 1980s, banks have targeted the world's roughly 8 million "high net-worth individuals" and encouraged them to hide their funds offshore. As a result, around $11.5 trillion of their assets are now in tax-free or protected havens. Money laundering is the most damaging and heinous financial practice prevalent all across the world. This flight of capital is more damaging particularly to the poor countries. This is affected in a precise manner by all types of tax evaders, financial racketeers, corrupt officials, arms dealers, extortionists, drug traffickers and mafia. Added to this what passes as normal legitimate businesses. Foreign development is their special target. The sleazy capital transfer through hawala and underground networks is made possible by reputable international banking system. As banks flourish with this clandestine wheeling dealing, this capital flight comes harsh on the economies of the developing world where good of billions of people is involved. Jyoti Trehan, a senior police officer in his book, Crime and Money Laundering provides some insight into world of black money whose magnitude is hard to measure in any precise manner. This is not only a parallel economy but also a parallel political empire. A large amount of money is spirited away from India to tax havens, or to secret bank accounts in numerous western countries and later it returns and get invested ‘legitimately’ through sophisticated operations and complicated manoeuvres involving shell companies, trusts, remittances, gifts and amnesty schemes like bonds. At times it takes the colour of patriotism when during black money holders buy defence bonds. It becomes clean money and its power extends beyond what a normal economic activity generates. Money laundering helps global narcotics trade, financing of criminal syndicates and sub-state terrorist activities. Researchers at the Florida International University once tracked India’s trade with the US between 1993 and 1995 to look for evidence of under- and over-invoicing. They were shocked at the evidence. They estimated that in 1995, capital flight from India to America affected through the mis-pricing of trade was up to $ 5.58 billion. Says Srinivasan: “Were this maximum figure in the range to hold true for other countries with which India trades today, Indian money laundering through trade would exceed $ 50 billion annually. The armaments trade is a major issue too. India has emerged as one of the top three buyers of lethal weaponry in the world, with purchases totaling $ 5 billion in 2004. India’s arms purchase bill is likely to be as high as $ 95 billion spread over the next 15 years as one estimate put it. The merit of the book lies in its analysis of parallel banking systems such as money transmission services in places like Hong Kong, Singapore, Dubai, London and New York. Also. Systems like “hundi/hawala, chop shop/chitti banking” and “black market peso exchange” and their links with modern money transmission services, rapid intra-community transactions based on “trust”, and high-speed communications also the black money grow like wild bushes. Terrorism, drug and human trafficking, environmental degradation, income inequality, poverty, political repression...no matter what your angle or area of concern in international affairs, there is money behind every challenge facing civilization. Dictators need resources to pay off their political power bases passes and support their lavish lifestyles; terrorists need resources to acquire weapons and stealthily transfer wealth to aid allies across borders; criminals, such as poachers, drug smugglers and human traffickers need some way to stash their ill-gotten proceeds; wealthy corporations and individuals have to hide their money somewhere to avoid paying taxes. In the process, they skew the economic system further in their favour. No matter what problem you're looking at, money needs to go in, and money needs to come out, and somebody has to hide it. There is growing alarm among regulators and campaigners because exchequers worldwide are missing out on at least $255bn of tax each year. Governments appear unable, or unwilling, to prevent the rich employing aggressive strategies to avoid taxes by all means. The rulers only help them in these tax heavens. There are no illusions. | ||||||||||||||||||
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Pesticide Lobby Attempts to Shut Public Opinion THE Pesticide Industry has now gone on an all out war cry, not against the Pests, as is their mandate but against public science. The growing concern for health and the ensuing public opinion against the use of chemicals to fight pests has frightened the industry. It has gone into over drive to attack civil right groups, public health experts and even farmers, whom the pesticide industry has seemingly been serving for more than half a century! Umendra Dutt Executive Director of Kheti Virasat Mission warns about the impending battle between the industry and the public health institutions. Please be aware all environmental activists, NGOs and doctors that your concern for the growing debt stricken villages, or for the growing number of widows whose farmer husbands drank the very pesticides to save themselves from debt, or for the millions of consumers, exposed to pesticides causing ill-health. Your concerns could l be "anti-national" & "anti- farmer". The Agrochemical Promotion Group has invented a new theory. "Either you are with us or you are against the country” In this offensive against pests, which is incidentally making some as multi-millionaires, while thousands farmers or millions acres of farmlands could be poisoned. Moreover, the Crop Care Federation of India, another of the pesticide vending cartels, believes that any talk on the ill effects of pesticides is going to drag India behind. They have, it seems, done some "Research" on this aspect! Moreover, in their desperate, yet systematic build up of their poisoning industrial empires, they seem to have adopted some of the most emotive of claims. They are 'nationalists', 'progressive', and 'forward looking' and 'farmer friendly In addition, according to the CCFI formerly known as Pesticides Association of India, the environmentalists are indulged in "an organized attempt to mislead people. As a result India might lapse into wheat importing country." Ironically, this year, India did import wheat in spite of surplus production and stock. May we ask the pesticide industry why even after fifty years of your crop protection the farmers themselves are not able to afford to buy what they produce? Why millions of farmers, a known 40% of them at least are going to their beds with a hungry stomach, in spite of their production, and your crop protection. The reasons are there to see, if you have the heart to see them. While production has increased, and productivity doubled or tripled, the farmer has to spend more and more for the same, get more and more loans, for all the costly inputs you have formulated and developed for him, and in the end made him bankrupt, while the agro-chemical cartels and promotion groups live in sprawling bungalows counting the profits, and inventing methods to protect their pesticide products. Ironically, the Food and Agriculture Organisation, which has spent decades trying to convince and sell to countries the need for modern agriculture has off late seen better sense and is promoting IPM, Alternate methods of crop management and advocates minimal use of chemical pesticides. And in fact, the Agro-Chemical promotion Group, itself by name is a violation of the "International Code of Conduct on the Use and Distribution of Pesticides" of the FAO, signed by all countries and stake groups including industries and environmental as well as public health organisations. We advice that the APG change their name, as they should not, as per the code, be seen as an organisation "Promoting" the agro-chemicals. The irony is that even Chemical companies cannot openly promote their chemicals as a "safe", "non-toxic", "non-poisonous" etc, and they are bound to the code and have to advocate judicious use of these pesticides, as per need and only as per many state, national and international conditions, most of which are for protecting public health and the environment from damages. Of late the pesticide industry lobby has been levelling some hilarious allegations against environmental groups and anybody who finds evidence of their chemicals contaminating blood or food or the environment. In a statement to media on 14 February 2006 at Ahmedabad, one of the top officers of the Crop Care Federation of India stated that they had already initiated action against Maneka Gandhi and Kheti Virasat Mission for making false claims about ill effects of pesticides on human beings and environment. Now one would like to now what kind of actions these are? And who are they to take actions against civil society who have been raising the concerns of the farmers and consumers of this country. It seems that agro-chemical groups and pesticide industry is feeling threatened by environmental groups when they say, "Baseless allegations of environmentalists has seriously challenged interests of Rs.6000 crore pesticide industry in the country. As a result we have decided to challenge all such false campaigns." Now, we have one of these groups taking on this challenge that we as civil society have posed to them. We were waiting for this. We have evidence that people exposed to pesticides are being poisoned – farmers and consumers, women and children and we have evidence – even official government statements and data that many of these pesticides are extremely hazardous and many even are carcinogenic and Mutagenicity. Now we want the APG and CCFI to prove that our concerns, backed by studies are "false campaigns". After CSE's report on pesticides in colas, followed by their expose of pesticides in blood of Punjabis, then came the Greenpeace India's report on impact of pesticides on growth of children that has sharpened the debate. The PGIMER report on abnormally high incidents of cancer in Malwa region pointed the finger clearly on pesticides for the dance of death. The CSE's report on traces of pesticides in human blood in Bathinda district initiated the debate on health and environmental impacts of pesticides in media and larger civil society. A general feeling has grown that pesticides are creating havoc for man and nature. Mean while the campaign for No pesticide use by various organic farming groups has gained significant momentum and public support. Many of the modern farmers who had fallen to the pesticide trap in the last 5 decades, have now realised and come out of the trap and have even joined the organic movement. And now, we have a spate of studies that show that this regulation has miserably failed in the country. The Endosulfan Spray issue in Kasaragod, Kerala has shown that all-precautionary and safety systems are a eye-wash in the country. And following the medical evidence produced by a detailed epidemiological study by the NIOH, the jittery industry and the government arm-twisted the system to keep the pesticide in the market. The results are funny. "Endosulfan is banned in Kerala, but can be used in all the other states". The message is clear – If you want it banned in Punjab, then prove that Punjabis can also be poisoned or may die out of Endosulfan!! Never in history has agriculture scientists, officials and the industry ever distorted science to this blatant extent. Shamefully blatant. The entire eco-system of Punjab that sustained farming and was the food basket of India has literally collapsed. There are several health impacts quite visible in Punjab. The economy of Punjab is in great stress due to intensive chemicalization of agriculture, and its unchecked modernisation. The pesticide companies have earned corers of rupees from Punjab alone, while the farmers are committing suicides. Even the government has conceded the suicide data - 2116 numbers. Do the APG and CCFI have any idea how these widows are surviving now? How their children are being educated? It is also well established that cancers and pesticides are linked and that certain types of cancer are related to pesticides more than other factors. The higher incidence of pesticides-related cancers in the Malwa belt cannot be denied though banned about two decades in many countries and banned and restricted in India too later, many of the Persistent Organic Pollutants (POPs) are found in blood samples even today, all over the world. According to PGIMER study, the blood samples that they studied contain the residues of POPs like Heptachlor, DDT, Aldrin and other extremely toxic pesticides like Chlorpyriphos, Ethion and Endosulfan. The Centre for Science & Environment (CSE) also found six to thirteen pesticides in virtually all blood samples. Some of them were POPs as: HCH, Aldrin and DDT. They also found Monocrotophos, Endosulfan, Phosphamidon, Chlorpyrifos and Malathion, all of which are used in high volumes in Punjab. POPs are banned in a majority of countries in the world. They are to be eliminated from use all over the world through the Stockholm Convention (2002), of which India is also a signatory. POPs are known Endocrine disrupters and the main reason behind Neuro toxicity, immunotoxicity, reproductive disorders, testicular cancer, and congenital malformations. Even motherhood is challenged by POPs through foetotoxicity. Many of the POPs are also classified as carcinogens, mutagens and even teratogens. The World has changed a lot in the last 50 years when DDT was discovered and used widely; the world thought that this was a wonder chemical. Today it is a recognised POPs and countries have banned it, and in a few years it will be phased out of the earth. We strongly believe that in spite of the tirade unleashed by the Pesticide Industry, their lives are also not more than that, and very soon, the APG and CCFI will be forgotten names in history. Because mankind have always struggled to get out of any unsafe existence. We believe that in the wider interest of the farmers, consumers and the humanity as a whole, the APG and the CCFI and all the other cartels selling pesticides should stop this illegal promotional activity and their tirade against the civil society. They should stop selling their poisons. We invite all members of APG and CCFI to visit Punjab with us and find the reality – the reality that bites. |
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SOUTH
ASIA POST INC. |
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R
Add
to this the Five trillion dollars that has been corruptly removed from the
world's poorest countries and lodged permanently in the world's richest
countries. This is a conservative estimate not by any leftwing
anti-globalisation militant but of a leading American businessman devotee of
capitalism who has done a through study of how multinational corporations,
wealthy persons and unscrupulous governments are using the world's banking
systems in ways that swell poverty.