The greatest inequality in the world lies in the divide between extreme wealth and artificial man-made poverty; and, global financial inequality is rapidly growing as Oxfam reports:
“The combined riches of 62 of the world’s most well-heeled individuals in 2015 equaled the wealth of 3.5 billion people — the bottom half of humanity — a new report about extreme global wealth inequality released showed. The findings, published by the poverty-fighting organization Oxfam, highlight the growing divide between those at either end of the income spectrum. Since 2010, the wealth of the richest 62 people increased 44% to $1.76 trillion, the report found. Over the same period, the wealth of the world’s poorest half fell over a trillion dollars or 41%. “Our economic system is heavily skewed in their (the wealthiest) favor, and arguably increasingly so,” Oxfam said. “Far from trickling down, income and wealth are instead being sucked upwards at an alarming rate.” Oxfam added: “Rising inequality is a problem for all of us.”
Remedies for economic rights violations will solve most of the resulting problems created by artificial man-made poverty; see https://giftoftruth.wordpress.com/referendum/
Richest One Percent Bagged 82 Percent of Global Wealth – Poorest Half of Humanity Got Nothing
Oxfam Report on Global Wealth in 2017
Eighty two percent of the wealth generated last year went to the richest one percent of the global population, while the 3.7 billion people who make up the poorest half of the world saw no increase in their wealth, according to a new Oxfam report released today. The report is being launched as political and business elites gather for the World Economic Forum in Davos, Switzerland.
‘Reward Work, Not Wealth’ reveals how the global economy enables a wealthy elite to accumulate vast fortunes while hundreds of millions of people are struggling to survive on poverty pay.
- Billionaire wealth has risen by an annual average of 13 percent since 2010 – six times faster than the wages of ordinary workers, which have risen by a yearly average of just 2 percent. The number of billionaires rose at an unprecedented rate of one every two days between March 2016 and March 2017.
- It takes just four days for a CEO from one of the top five global fashion brands to earn what a Bangladeshi garment worker will earn in her lifetime. In the US, it takes slightly over one working day for a CEO to earn what an ordinary worker makes in a year.
- It would cost $2.2 billion a year to increase the wages of all 2.5 million Vietnamese garment workers to a living wage. This is about a third of the amount paid out to wealthy shareholders by the top 5 companies in the garment sector in 2016.
Oxfam’s report outlines the key factors driving up rewards for shareholders and corporate bosses at the expense of workers’ pay and conditions. These include the erosion of workers’ rights; the excessive influence of big business over government policy-making; and the relentless corporate drive to minimize costs in order to maximize returns to shareholders.
Winnie Byanyima, Executive Director of Oxfam International said:
“The billionaire boom is not a sign of a thriving economy but a symptom of a failing economic system. The people who make our clothes, assemble our phones and grow our food are being exploited to ensure a steady supply of cheap goods, and swell the profits of corporations and billionaire investors.”
…“People are ready for change. They want to see workers paid a living wage; they want corporations and the super-rich to pay more tax; they want women workers to enjoy the same rights as men; they want a limit on the power and the wealth which sits in the hands of so few. They want action.”
Almost a Billion People Go Hungry Worldwide
As global starvation spreads, charities warn that the total number of severely malnourished children is also rising.
US Has Taken 70% Of World’s Wealth Gains Since 2012
By Paul Buchheit
December 15, 2017 “Information Clearing House” – America’s super-rich are taking not only from their own nation, but also from the rest of the world. Data from the 2017 Global Wealth Databook (GWD: Table 2-4) and various war reports help to explain why we’re alienating people outside our borders.
From 2012 to 2017, global wealth increased by $37.7 trillion, and U.S. wealth increased by $26 trillion. Thus, largely because of a surging stock market, our nation took nearly 70 percent of the entire global wealth gain over the past five years. Based on their dominant share of U.S. wealth, America’s richest 10% — much less than 1% of the world’s adult population — took over HALF the world’s wealth gain in the past five years.
Read full article at: http://www.informationclearinghouse.info/48428.htm
US Corporate Tax Cheats Hiding $1.4 Trillion in Profits in Offshore Accounts
A report issued Thursday by the British charity Oxfam found that the 50 largest US corporations are hiding $1.4 trillion in profits in overseas accounts to avoid US income taxes, much of it in tax havens like Bermuda and the Cayman Islands.
The biggest tax dodger is technology giant Apple, with $181 billion held offshore. General Electric had the second-largest stash, at $119 billion, enough to repay four times over the $28 billion GE received in federal guarantees during the 2008 Wall Street crash. Microsoft had $108 billion in overseas accounts, with companies like Exxon Mobil, Pfizer, IBM, Cisco Systems, Google, Merck, and Johnson & Johnson rounding out the top ten.
Overseas tax havens have been the focus of recent revelations about tax scams by wealthy individuals, based on the leak of the “Panama Papers,” documents from a single Panama-based law firm, Mossack Fonseca, involving 214,000 offshore shell companies. The firm’s clients included 29 billionaires and 140 top politicians worldwide, among them a dozen heads of government.
But the sums involved in corporate tax scams dwarf those hidden away by individuals. According to the Oxfam report, the offshore manipulations by the 50 largest US corporations cost the US taxpayer $111 billion each year, while robbing another $100 billion annually from countries overseas, many of them desperately poor.
The $111 billion a year in US taxes evaded would be sufficient to eliminate 90 percent of child poverty in America, effectively wiping out that social scourge. It is more than the annual cost of the food stamp program, or unemployment benefits, or the total budget of the Department of Education.
How Tax Havens Plunder the Poor
Professor Jeffrey Sachs (Director of the Earth Institute, Columbia University)
When G8 leaders meet this June, they have a responsibility to end one of the biggest and most dangerous scams in the world economy: the global web of tax and secrecy havens that they so lovingly have nurtured over the years. These havens facilitate tax evasion, money laundering, bribery, and lack of accountability for environmental and social calamities.
The public did not really know the facts until recently. The rich and powerful kept the public distracted when stock markets were rising and budgets were full. Yet the tax haven system was eating away at the roots of the world economy, making it increasingly easier for wealthy individuals, corrupt businesses, money launderers, political parties, and of course the ever-more-powerful banks, hedge funds, and multinational companies to protect their profits from taxation.
The following extracts from Jubilee USA is presented by a UN sovereign debt expert and supports our proposal for an investigation into the feasibility of debt relief as a tool for poverty alleviation as well as a debt jubilee to resolve the artificial man-made financial crisis South Africa is facing.
Download ActionAid report: ActionAid-Tax-Havens-May-2013
Download annexure: HOW TAX HAVENS PLUNDER THE POOR
United Nations Economic Commission of Africa
Africans must seek growth that is primarily anchored on their priorities and that is capable of delivering structural transformation
Established by the Economic and Social Council (ECOSOC) of the United Nations (UN) in 1958 as one of the UN’s five regional commissions, ECA’s mandate is to promote the economic and social development of its member States, foster intra-regional integration, and promote international cooperation for Africa’s development.
Made up of 54 member States, and playing a dual role as a regional arm of the UN and as a key component of the African institutional landscape, ECA is well positioned to make unique contributions to address the Continent’s development challenges.
Read more at: Read more at: http://www.uneca.org/pages/overview
Africa is Plundered for Billions Each Year, Research Confirms
Posted by cubainsidetheworld
Underdeveloped, or overexploitated? Against the narrative that Western aid “helps” poverty in Africa, a new study shows that the pillaging of Africa by Western economic interests is still the major source of poverty. A coalition of UK and African-based development campaign groups published research on Wednesday that indicates that Africa has an annual financial deficit of over US$40 billion in capital leaving the continent each year, the Guardian reported.
New evidence of Africa’s systematic looting, provided by an increasingly schizophrenic World Bank
by Patrick Bond; Pambazuka News | February 08, 2018
A brand new World Bank report, The Changing Wealth of Nations 2018, offers evidence of how much poorer Africa is becoming thanks to rampant minerals, oil and gas extraction. Yet Bank policies and practices remain oriented to enforcing foreign loan repayments and transnational corporate (TNC) profit repatriation, thus maintaining the looting.
Central to its “natural capital accounting,” the Bank uses an “Adjusted Net Savings” (ANS) measure for changes in economic, ecological and educational wealth. This is surely preferable to “Gross National Income” (GNI, a minor variant of Gross Domestic Product), which fails to consider depletion of non-renewable natural resources and pollution (not to mention unpaid women’s and community work).
In its latest world survey (with 1990-2015 data), the Bank concludes that sub-Saharan Africa loses roughly $100 billion of ANS annually because it is “the only region with periods of negative levels – averaging negative three percent of GNI over the past decade – suggesting that its development policies are not yet sufficiently promoting sustainable economic growth… Clearly, natural resource depletion is one of the key drivers of negative ANS in the region.”
The Bank asks, “How does sub-Saharan Africa compare to other regions? Not favourably.” Contrary to pernicious “Africa Rising” mythology, the ANS decline for sub-Saharan Africa was worst from 2001-09 and 2013-15.
Economic Justice Equals Prosperity
It’s quite easy to attract an audience these days by documenting the scope and magnitude of the massive economic injustice in our societies – which has now reached an all-time extreme. However, begin to detail precisely how our monetary system and tax systems have been “rigged” in order to rob us blind, or even expressly point to the actual solutions to these problems and interest dwindles.
The lack of willingness among the majority of the population to learn about these issues because they are “too complicated” or “too boring” is, of course, a reflection of the endemic apathy which has gripped our societies for several decades now. Sadly, this is a natural symptom of the affluence which existed in the decades prior to our economic exploitation. Even more tragically, this mass-apathy has been ruthlessly capitalized upon by the “top 1%”, or as I regularly label them: the ultra-wealthy.
International Review of Financial Analysis
Thank Ben for bringing this one to our attention;
The International Review of Financial Analysis (IRFA) is a non-affiliated refereed journal whose primary goal is to provide an outlet for high quality Financial Research. The journal is open to a diversity of Financial Research topics and will be unbiased in the selection process.
- Can banks individually create money out of nothing? — The theories and the empirical evidence Richard A. Werner
- A lost century in economics: Three theories of banking and the conclusive evidence Richard A. Werner
- How do banks create money, and why can other firms not do the same? An explanation for the coexistence of lending and deposit-taking Richard A. Werner
The Network of Global Corporate Control
Stefania Vitali, James B. Glattfelder, and Stefano Battiston; all three a Chair of Systems Design, ETH Zurich, Kreuzplatz 5, 8032 Zurich, Switzerland,
8.3 Top Control-Holders Ranking
This is the first time a ranking of economic actors by global control is presented. Notice that many actors belong to the financial sector (NACE codes starting with 65,66,67) and many of the names are well-known global players.
Download PDF at: Download http://arxiv.org/PS_cache/arxiv/pdf/1107/1107.5728v2.pdf
And, granted the Competition Commission of South Africa has launched an investigation into a few megabanks for market rigging as reported at: http://www.bloomberg.com/news/articles/2015-05-20/six-banks-pay-5-8-billion-five-plead-guilty-to-market-rigging/
However, nothing came of this…
Also read the Capitalism page: https://giftoftruth.wordpress.com/capitalism/
Money Laundering: Is It Really True that Switzerland Is the #1 Most Corrupt Nation, and the U.S. #2?
The Tax Justice Network produces a Financial Secrecy Index, ranking countries for the assistance their legal systems provide, to money-launderers, and to all people who seek to protect corruptly-obtained wealth. The higher the score, the more corrupt the government is. The last time this Index was published, in 2015, Switzerland was rated the world’s most-corrupt country, and Hong Kong was then #2.
But now, in its newly released global rankings, “Financial Secrecy Index — 2018 Results”, though Switzerland still holds its #1 (most-corrupt) spot, the U.S. has become #2, and Hong Kong has now fallen to #4, which is immediately below Cayman Islands (which is #3, and which had been #5 in 2015).
The detailed report-card for Switzerland says
Jubilee USA Network is an alliance of more than 75 US organizations and 550 faith communities working with 50 Jubilee global partners. Jubilee’s mission is to build an economy that serves, protects and promotes the participation of the most vulnerable.
Jubilee USA has won critical global financial reforms and more than $130 billion in debt relief to benefit the world’s poorest people. Eric LeCompte, the executive director is a UN sovereign debt expert. He states:
“Our efforts build the political support needed to influence world-wide decision makers, the White House, Congress, the G20, International Financial Institutions and the United Nations to promote poverty reduction and move solutions to the international debt crisis. Ultimately, we work to create an international financial system that protects and ensures participation of the most vulnerable within the context of human rights. Our advocacy promotes responsible lending and borrowing, increasing debt relief for poor countries, curbing illicit financial flows and corporate tax avoidance, moving forward an international debt resolution process, pushing reforms in international financial institutions and protecting poor people from predatory financial behavior. Our efforts focus on the following areas:”
- Responsible Lending and Borrowing / Expanded Debt Relief-
- Tax and Transparency-
- Fair and Transparent Debt Arbitration Process-
- Reform of international financial institutions-
- Establishing trade policies that promote the common good-
For further background information see: http://www.jubileeusa.org/ourwork
Download annexure: JUBILEE USA
Further References: Debt_Relief_Works_2010
The following extracts are from the Thabo Mbeki Foundation: http://www.thabombekifoundation.org.za/
[Note: this website was mysteriously removed 2 months after we started referring to it in our correspondence with RSA INC. agencies… It seems Thabo Mbeki did his homework into the financial system and was campaigning internationally for an investigation; but, it seems that the pressure from the RSA cabal was too much; we are quite sure that his spats with the Hawks and others were because of the following;]
Tackling Illicit Capital Flows for Economic Transformation
Thabo-Mbeki Elaborated News
- In finance literature, illicit finance is generally described as a form of illegal and is often associated with money that is illegally earned, transferred, or utilized. The movement of such types of money is made with clear intention to make it disappear from any record in the country of origin. Illicit financial flows can be generated through a number of means that are not revealed in national accounts or figures, including trade mis-pricing, bulk cash movements, hawala1 transactions, smuggling and more. By some expert’s estimate, illicit flows from Africa each year could be as much as double what ODA allocate to Africa and this estimate may well be short of reality as accurate data does not exist for many African countries. Illicit financial outflows drain hard currency reserves, heighten inflation, reduce tax collection, cancel investment, undermine trade, worsen poverty, and widen income gaps. Most illicit financial flows today are facilitated by some 60 international tax havens, secrecy jurisdictions creating and operating disguised corporations, shell companies numbering in the millions, anonymous trust accounts, fake charitable foundations, money laundering techniques and trade mis-pricing.
Download annexure: TACKLING ILLICIT FINANCIAL FLOWS FOR ECONOMIC TRANSFORMATION
ILLICIT FINANCIAL FLOWS FROM AFRICA
HIDDEN RESOURCE FOR DEVELOPMENT
In December 2008 Global Financial Integrity released its groundbreaking analysis of Illicit Financial Flowsfrom Developing Countries: 2002 – 2006. We estimated such flows at $859 billion to $1.06 trillion a year.
We are pleased now to release our analysis of Illicit Financial Flows from Africa: Hidden Resource for Development. This study examines the 39-year period from 1970 through 2008. Utilizing accepted economic models, namely the World Bank Residual Method and IMF Direction of Trade Statistics, we estimate that such flows have totaled $854 billion across the period examined. This estimate is regarded as conservative, since it addresses only one form of trade mispricing, does not include the mispricing of services, and does not encompass the proceeds of smuggling. Adjusting the $854 billion estimate to take into account some of the components of illicit flows not covered, it is not unreasonable to estimate total illicit outflows from the continent across the 39 years at some $1.8 trillion.
Much attention has been focused on corruption in recent years, that is, the proceeds of bribery and theft by government officials. In the cross-border flow of illicit money, we find that funds generated by this means are about 3 percent of the global total. Criminal proceeds generated through drug trafficking, racketeering, counterfeiting and more are about 30 to 35 percent of the total. The proceeds of commercial tax evasion, mainly through trade mispricing, are by far the largest component, at some 60 to 65 percent of the global total. While we have not attempted in this study to verify these approximate percentages for Africa, we believe that they are likely to be of roughly the same order of magnitude.
This massive flow of illicit money out of Africa is facilitated by a global shadow financial system comprising tax havens, secrecy jurisdictions, disguised corporations, anonymous trust accounts, fake foundations, trade mispricing, and money laundering techniques. The impact of this structure and the funds it shifts out of Africa is staggering. It drains hard currency reserves, heightens inflation, reduces tax collection, cancels investment, and undermines free trade. It has its greatest impact on those at the bottom of income scales in their countries, removing resources that could otherwise be used for poverty alleviation and economic growth.
Addressing this problem requires concerted effort by both African nations and by western countries. The outflow from Africa and the absorption into western economies deserve equal attention. Through greater transparency in the global financial system illicit outflows can be substantially curtailed, thereby enhancing growth in developing countries and at the same time stabilizing the economies of richer countries.
Global Financial Integrity thanks Dev Kar and Devon Cartwright-Smith for their work in producing this analysis.
Raymond W. BakerDirector, Global Financial Integrity
Download Global Financial Integrity report: GFI REPORT – ILLICT FINANCIAL FLOWS FROM AFRICA
The Panama Papers
Offshore links of more than 140 politicians and officials exposed.
By The International Consortium of Investigative Journalists April 3, 2016
A new investigation published today by ICIJ, the German newspaper Süddeutsche Zeitung and more than 100 other news organizations around the globe, reveals the offshore links of some of the planet’s most prominent people.
In terms of size, the Panama Papers is likely the biggest leak of inside information in history – more than 11.5 million documents – and it is equally likely to be one of the most explosive in the nature of its revelations.
It is the largest cross-border media collaboration ever undertaken. Journalists working in more than 25 languages dug into Mossack Fonseca’s inner affairs and traced the secret dealings of the law firm’s customers around the world. They shared information and hunted down leads generated by the leaked files using corporate filings, property records, financial disclosures, court documents and interviews with money laudering experts and law-enforcement officials.
Most of the services the offshore industry provides can be used for legal purpose and are by law-abiding customers. But the documents show that banks, law firms and other offshore players often fail to follow legal requirements to make sure clients are not involved in criminal enterprises, tax dodging or political corruption. The files show that these fixers and middlemen protect themselves and their clients by concealing suspect transactions. In some instances, they work to head off official investigations by backdating and destroying documents.
The Panama Papers make it clear that major banks are big drivers behind the creation of hard-to-trace companies in the British Virgin Islands, Panama and other offshore havens. The files list more than 15,600 paper companies that banks set up for clients who wanted to keep their finances under wraps, including hundreds created by international giants UBS and HSBC.
The disclosures from the law firm’s leaked files dramatically expand on previous leaks of offshore records that ICIJ and its reporting partners have revealed in the past four years.
South Africa: Minister Pravin Gordhan Instructs Investigations Into Offshore Holdings
Download annexure: PANAMA PAPERS
Paradise Papers leak reveals secrets of the world elite’s hidden wealth
The world’s biggest businesses, heads of state and global figures in politics, entertainment and sport who have sheltered their wealth in secretive tax havens are being revealed this week in a major new investigation into Britain’s offshore empires.
The details come from a leak of 13.4m files that expose the global environments in which tax abuses can thrive – and the complex and seemingly artificial ways the wealthiest corporations can legally protect their wealth.
The material, which has come from two offshore service providers and the company registries of 19 tax havens, was obtained by the German newspaper Süddeutsche Zeitung and shared by the International Consortium of Investigative Journalists with partners including the Guardian, the BBC and the New York Times.
The project has been called the Paradise Papers. It reveals:
- Millions of pounds from the Queen’s private estate has been invested in a Cayman Islands fund – and some of her money went to a retailer accused of exploiting poor families and vulnerable people.
- Extensive offshore dealings by Donald Trump’s cabinet members, advisers and donors, including substantial payments from a firm co-owned by Vladimir Putin’s son-in-law to the shipping group of the US commerce secretary, Wilbur Ross.
- How Twitter and Facebook received hundreds of millions of dollars in investments that can be traced back to Russian state financial institutions.
- The tax-avoiding Cayman Islands trust managed by the Canadian prime minister Justin Trudeau’s chief moneyman.
- A previously unknown $450m offshore trust that has sheltered the wealth of Lord Ashcroft.
- Aggressive tax avoidance by multinational corporations, including Nike and Apple.
- How some of the biggest names in the film and TV industries protect their wealth with an array of offshore schemes.
- The billions in tax refunds by the Isle of Man and Malta to the owners of private jets and luxury yachts.
- The secret loan and alliance used by the London-listed multinational Glencore in its efforts to secure lucrative mining rights in the Democratic Republic of the Congo.
- The complex offshore webs used by two Russian billionaires to buy stakes in Arsenal and Everton football clubs.
The disclosures will put pressure on world leaders, including Trump and the British prime minister, Theresa May, who have both pledged to curb aggressive tax avoidance schemes.
The publication of this investigation, for which more than 380 journalists have spent a year combing through data that stretches back 70 years, comes at a time of growing global income inequality.
Meanwhile, multinational companies are shifting a growing share of profits offshore – €600bn in the last year alone – the leading economist Gabriel Zucman will reveal in a study to be published later this week.
“Tax havens are one of the key engines of the rise in global inequality,” he said. “As inequality rises, offshore tax evasion is becoming an elite sport.”
At the centre of the leak is Appleby, a law firm with outposts in Bermuda, the Cayman Islands, the British Virgin Islands, the Isle of Man, Jersey and Guernsey. In contrast to Mossack Fonseca, the discredited firm at the centre of last year’s Panama Papers investigation, Appleby prides itself on being a leading member of the “magic circle” of top-ranking offshore service providers.
It acted for the establishment offshore, providing the structures that helped to legally reduce their tax bills.
Appleby says it has investigated all the allegations, and found “there is no evidence of any wrongdoing, either on the part of ourselves or our clients”, adding: “We are a law firm which advises clients on legitimate and lawful ways to conduct their business. We do not tolerate illegal behaviour.”
Illicit Financial Flows