Tax lost in tax havens is enough to end global extreme poverty twice over according to new figures published by Oxfam, Wednesday.Although a deal was done earlier this month to get some of these tax havens to be more transparent and share tax information, there is still no tax deal on the table that will benefit poor countries who are struggling to reclaim billions of dollars.In the agreement British tax havens in the Caribbean have said they will provide information on offshore bank accounts.Tax havens take desperately needed cash from poor countries as well as from citizens at home who are being hit by austerity measures, the international agency said.Some of the major world, EU and British tax havens are the Bahamas, Luxembourg, the British Virgin Islands and the Isle of Mann, which is located under 50miles away from the UK mainland.“These figures put the UK at the center of a global tax system that is a colossal betrayal of people here and in the poorest countries who are struggling to get by, and put the government on the side of the privileged few,” said Emma Seery, Oxfam’s head of Development Finance and Public Services, in a statement.The $156 billion in lost tax revenue is estimated by Oxfam to be just a fraction of the total tax lost, as it only reflects the amount of tax individuals are neglecting to pay and doesn’t include tax dodged by companies that costs poor countries a further $160 billion a year.Oxfam is part of the Enough Food for Everyone IF campaign, which is calling on the G8 to make all tax havens join a multinational agreement to share tax information.The campaign includes more than 200 UK anti-poverty organizations and calls on the British government use its presidency of the G8 to launch a Convention on Tax Transparency, where countries would commit to preventing individuals and companies from making their wealth untraceable.“The crucial thing at G8 is that any tax deal is multilateral, which means the developing world would be able to recoup the money owed to them,” Emma Seery told RT.The UK Prime Minister David Cameron is attending an EU summit Wednesday where European heads of state and government will be addressing the unfair global tax system. Two thirds of the world’s offshore wealth, some $12.29 trillion is sitting in European linked tax havens, including the British ones.“Britain’s credibility is on the line; talking tough on tax, whilst continuing to usher a third of the world’s wealth into UK tax havens, risks making a mockery of David Cameron’s leadership at the G8 summit in June,” Seery said.Oxfam says the EU is set to fail on imposing countermeasure sanctions against tax havens and those using them and that they won’t come out of Brussels with a deal.In fact the EU meeting will be about harmonizing tax across the trading bloc. Attempts for a better exchange of information on what tax multinationals are paying, which were meant to be global rather than European in scope, have been taken over by various attempts to create a consolidated EU corporate tax base. … Read More
Federal Reserve: rising inequality jeopardizes economic recovery
Fed Board of Governors member Sarah Bloom Raskin was in Washington, DC on Thursday, and during an address before the Society of Government Economists and the National Economists Club she said the widening gap between the rich and poor is just one of the issues being investigated as attempts are made to rebound from the financial crisis of 2009.“In my view, the large and increasing amount of inequality in income and wealth, which has been an ongoing development for decades, may have exacerbated the crisis and I think more research is required to determine whether it may also pose a significant headwind to the recovery from the crisis for years to come,” Raskin told the crowd. “So, while I am hopeful that pressures will ease further as home prices continue to rebound, I also believe that some of the restraints on the recovery may be quite long-lasting.”When the Pew Research Center released their findings on inequality last month, they concluded that the wealthiest 7 percent of Americans saw their average net worth surge by 28 percent when the great recession ravaged a majority of US households. In that same span between 2009 and 2011, those on the bottom 93 percent saw their net worth drop 4 percentage points.“It has been a very good recovery for those at the upper end of the wealth distribution,” Paul Taylor of the Pew Research Center wrote of his report, “But there has been no recovery for the lower 93, which is nearly everybody.”And as that trend is obvious to pollsters, economists are worrying that a widening gap between sectors will reduce the likelihood of a rebound anytime soon. Before Raskin touched on inequality during this week’s address, she admitted that the recovery process in the post-recession years has been “a very weak one.”According to Raskin, the problem stems from massive lay-offs in the wake of the recession’s start that primarily had an impact on workers of certain sectors that have been unable to find employment elsewhere. Raskin said “currents of globalization and technological change” meant that many Americans fired in 2009 have been unable to adopt for the jobs that are in demand today.“About two-thirds of all job losses in the recession were in middle-wage occupations — such as manufacturing, skilled construction, and office administration jobs — but these occupations have accounted for less than one-fourth of the job growth during the recovery. By contrast, lower-wage occupations, such as retail sales, food service and other lower-paying service jobs, accounted for only one-fifth of job losses during the recession but more than one-half of total job gains during the recovery. As a result of these trends in job creation, which could well have been exacerbated by the severe nature of the crisis, the earnings potential for many households likely remains below what they had anticipated in the years before the recession,” she said.“The increase in economic activity and the decline in the unemployment rate are, of course, welcome, but we still have a long way to go to reach what feels like a healthy economy. In fact, the pace of recovery has been slower than most had expected. The gap between actual output and the economy’s potential remains quite large, according to estimates from the Congressional Budget Office, and the unemployment rate today remains well above levels seen prior to the recession, and well above the level that the Committee thinks can be sustained once a full recovery has been achieved,” added Raskin.Thursday’s remarks by the Fed board member was actually the third time in as many months that she warned of what widening inequality was doing to America. During an event in New York City last month, Raskin said, “Of course, it is not part of the Federal Reserve’s mandate to address inequality directly, but I want to explore these issues today because the answers may have implications for the Federal Reserve’s efforts to understand the recession and conduct policy in a way that contributes to a stronger pace of recovery.” … Read More
India and China to dominate world savings and investment by 2030
In 17 years time developing countries will provide for more than 50% of the total global stock of capital, up from about 33% they do today, the World Bank said in its Global Development Horizons report. The largest portion of that stock will reside in East Asia and Latin America. In absolute terms, China is projected to become the largest saver by a landslide, accounting for $9 trillion in 2010 dollars by 2030. India ranks the second with its $1.7 trillion.On the investment side, China is also projected to become the largest, providing 30% of total investment by 2030. Taken together, the remainder of the popular BRIC club of developing nations – Brazil, India and Russia – will account for 13% of global investment.“Productivity catch-up, increasing integration into global markets, sound macroeconomic policies, and improved education and health are helping speed growth and create massive investment opportunities, which, in turn, are spurring a shift in global economic weight to developing countries,” the report explained.The service sector – one of the key criteria for distinguishing between the developed and developing world – is also going to make a huge leap in developing countries. Employment in services is projected to become more than 60% of their total employment, which brings them closer to the developed world.Results of the research signal a real reshuffle in the alignment of world economic forces, according to Maurizio Bussolo, lead Economist and author of the report.“GDH [Global Development Horizons report] clearly highlights the increasing role developing countries will play in the global economy,” he said. … Read More
Arctic becomes focus of development concerns
In an odd but not unexpected move, the Arctic Council has granted observer status to countries nowhere near the Arctic.
The decision was made by the current members, which include Russia and the US, as well as Canada and other countries which have an Arctic coast.
New observer members include China and India as well as Singapore and South Korea.
Erkki Tuomioja, Finnish Foreign Minister said “This is very much about the environment ….it’s a good learning process also for them to sit at the same table and learn what the real concerns are.”
Any development concerns the indigenous peoples, but the granting of observer status is being seen as a boost for the rising powers which are already active in the region.
The Arctic holds an estimated 13 per cent of the world’s undiscovered oil and 30 per cent of the planet’s undiscovered gas.
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France not in Mali to protect population, but ‘ensure its position in Africa’
Dubreuil is also a spokesperson for Survie, an organization that battles against colonialism.RT: Given the security situation in Mali, is this summit aimed at funding reconstruction good timing?Danyel Dubreuil: It’s only the next stage in the operation… At the beginning, the French government said that it was meant to be only a military operation, and a short military operation. However, after a few days they said they would have to stay for a long time to rebuild the country, so now their goal is to rebuild the country. So they have to find money anyway to do that. RT: Mali is seeking 2 billion euro in compensation. Do you think that pouring money into Mali help bring stability and democracy as promised, or will we see another Afghanistan where lots of money has little result?DD: I don’t know about the comparison with Afghanistan, but bringing so much money into a country never led to any results in terms of development. If you look 50 years back, we did these kinds of policies in countries like Mali. So it’s all the conception of development policies that they have to change. And pouring money into the system that is greatly corrupted [means that] the money never goes to the people who really need them…You have to have strong political institutions, strong policies that aim to improve the conditions, the worst conditions of the people.RT: Let’s turn to the French operation in Mali – why exactly is Paris planning to keep a thousand troops in the country even after UN peacekeepers take over later this year? Are we looking at an occupation here?DD: It depends on the side you’re looking at. If you’re at the side of the French people, at the traditions we have since 1960, at the colonization time, we kept thousands of soldiers on the African soil. We still have four permanent bases and 5,000 soldiers there. So now the question is whether they will permanently stay in Mali. They spoke about 1,000 soldiers for an indefinite period of time. The French government didn’t say they would settle a new base in Mali, but they say they will stay there as long as they need.RT: What are the true intentions of Paris in this ongoing conflict? Are we talking about sowing the seeds of democracy, or are we talking, more simply, about protecting the natural resources in the best economic interest of France?DD: It’s to restore the French position in Africa, as this part of the world has been directly targeted by a lot of powerful countries who were looking for natural resources. And France has a traditional strong position in this continent. They are looking not to lose this position, they are showing [their] muscles, if you want. … Read More
International community pledges €3.25bn to rebuild Mali as conflict rages on
The money will go towards helping Mali recover from the conflict with Islamist militants who took control of the country’s north last year. The total sum exceeds Mali’s original target of 2 billion euro.The EU commission is supplying a large portion of the sum, allocating 524 million euro, while the US and Islamic Development Bank also pledged significant capital.”It went beyond what we could have hoped for … This conference marks a new chapter in the fight of civilization against terrorism,” Malian President Dioncounda Traore told a news conference.The funds will be invested into the “total relaunch” of the country, a 4.3-billion-euro initiative that includes organizing the elections for July. However, doubts have been raised over the viability of holding elections so soon given the tens of thousands of Malians displaced by the conflict and taking refuge in neighboring countries.The money will also go towards installing basic infrastructure in Mali’s north, the lack of which has undermined public support for the interim government.In spite of the ongoing presence of 1,000 French soldiers in the embattled nation, European Commission Leader Jose Manuel Barroso told press the donation “is essential to establish a Mali that is stable, democratic and prosperous.” The French government has made repeated statements during the conflict that they are close to eradicating insurgency.“We are winning this war, now we have to win back the country,” said French Foreign Minister Laurent Fabius on Tuesday. When France originally intervened back in January, Fabius insisted the French military presence would stay for “a matter of weeks” until regional forces could take over.The French military presence has thus far served to push back Islamist militant forces advancing on the country’s capital Bamako four months after they intervened. However, pockets of resistance still remain deeply entrenched in Mali’s northern mountainous zone which they use as a base from which to launch attacks.Concerns have been voiced that a prolonged campaign against insurgency could lead to a spill-over into other African nations. Independent journalist Robert Harneis told RT that Libya would be an “ideal place” for the Malian immigrants to take refuge as it is in a “state of chaos” following NATO intervention.“They disperse, they conceal their weapons, their assets, they merge with the population and they wait because they know that sooner or later the intervention forces will go home,” said Harneis.Of the 4,500-odd French troops that were initially deployed the majority have been withdrawn, but the 1,000 that remain are expected to stay until the end of the year until regional forces are ready to take on full security responsibilities.The Malian government called on its former colonial ruler, France, to intervene in January when northern militants took control of key cities in the center of the country. Islamist extremists took control of the North African nation last year following a coup. The Islamists forced extreme Sharia law on the inhabitants of the northern territories. … Read More
Market Buzz: Chinese macro data to drive floors
The Asian economic powerhouse is expected to release data on retail sales, industrial manufacturing and April’s urban investment figures. “Forecast readings are shadowing forth a slight growth for all of the free indicators,” Investcafe analyst Darya Pichugina said, adding that some analysts are not quite so optimistic.“There’s no visible improvement in the macro situation,” analyst Liu Guangming of Beijing’s Dongxing Securities Co. said, according to Bloomberg.China’s overall economic performance has been largely disappointing: Despite recent trade figures showing an improved economic climate, fears persist of a downturn in the world’s second-largest economy.In April, Chinese exports rose 14.7 percent year-on-year and imports increased 16.8 percent, both outperforming analyst expectations, the People’s Republic Customs Administration reported last Wednesday. However, Citigroup economist Ding Shuang warned that the improved figures may be reflecting “over-invoicing [by exporters].”China also faces a brutal GDP forecast in 2013. In March, China’s projected GDP growth was cut from 7.9 percent to 7.7 percent, due to weak global export demand. April manufacturing data was also disappointing, with an HSBC report on the service sector showing its weakest expansion since August 2011.Across Asia, Japanese shares are trading higher on Monday, with the Nikkei 225 gaining 1.24 percent; floors in Hong Kong and Shanghai are currently closed.Russian stocks closed Friday’s session in the red, with the RTS falling 1.54 percent to 1,429.78 and the MICEX declining 0.47 percent to 1,426.25. A sharp cut in economic forecast for Russia issued by the European Bank for Reconstruction and Development (EBRD) on Friday could be one of the main reasons the selloff on Russian floors, Investcafe analyst Anna Bodrova explained. The EBRD revised its forecast for the Russian economy, predicting GDP growth of 1.8 percent in 2013 – a sharp downgrade from the previous forecast of 3.5 percent.European markets finished higher on Friday, with French stocks leading the region. The CAC 40 was up 0.64 percent, London’s FTSE 100 added 0.49 percent and Germany’s DAX gained 0.19 percent to close at a record high of 8,278.59 points.North and South American markets have traded mixed recently: The S&P 500 and the Dow Jones remained above key psychological levels last week – 15,000 and 1,600, respectively. The Nasdaq rose 1.7 percent for the week, and the Latin American Bovespa lost 0.61 percent. … Read More
