'$11.5 trillion of personal wealth held offshore'

From Public loot since 1947: Let us bring back our money by M R Venkatesh

It is one of the biggest loots witnessed by mankind -- the loot of the aam aadmi (common man) since 1947 by his brethren occupying public office.

It has been orchestrated by politicians, bureaucrats and some businessmen. The list is almost all-encompassing. No wonder, everyone in India loots with impunity and without any fear.

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In fact, some finance experts and economists believe tax havens to be a conspiracy of the western world against the poor countries. By allowing the proliferation of tax havens in the twentieth century, the western world explicitly encourages the movement of scarce capital from the developing countries to the rich.

In March 2005, the Tax Justice Network (TJN) published a research finding demonstrating that $11.5 trillion of personal wealth was held offshore by rich individuals across the globe. The findings estimated that a large proportion of this wealth was managed from some 70 tax havens.

Further, augmenting these studies of TJN, Raymond Baker -- in his widely celebrated book titled Capitalism's Achilles Heel: Dirty Money and How to Renew the Free Market System -- estimates that at least $5 trillion have been shifted out of poorer countries to the West since the mid-1970s. It is further estimated by experts that one per cent of the world's population holds more than 57 per cent of total global wealth, routing it invariably through these tax havens.

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In fact, elections in India offer a choice between Tweedledum and Tweedledee to the electorate. As the Hindi saying goes: Hamam mein sab nangey hain (everyone is naked in the bath). No wonder, in India, while democracy facilitates frequent changes of government, the Indian brand of democracy has not been potent enough to tackle the issue of corruption.

And this substantially -- if not wholly explains -- as to why Indians, especially youngsters, are so cynical about political leaders, democratic institutions and even democracy. And this when Barack Obama, the Democratic Party candidate for the US President elections, has along with few other colleagues in the US Senate introduced a bill in early 2007 titled 'Stop Tax Haven Abuse Act.' This Act broadly seeks to:

• Establish presumptions to combat offshore secrecy to presume that non-publicly traded, offshore corporations and trusts are controlled by US taxpayers, unless the taxpayer proves otherwise;
• Provide special and sweeping powers to the Treasury authorities to deal with tax havens;
• Strengthen detection of offshore activities by requiring US financial institutions that open accounts to report such actions to the concerned authorities;
• Strengthen penalties to deter such activities.

No wonder Obama, despite all the apparent disadvantages, has endeared himself to the electorate in the US.

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