Treasure Islands - Nicholas Shaxson [156]
25.The Soyo-Palanca Trust and the Cabinda Trust were used as efficient mechanisms for routing Angola’s oil money, enabling Angola to provide trustworthy collateral for oil-backed loans, ring-fenced from the inefficiencies of Angola’s domestic financial system. The problem was, essentially, that this ring-fencing also meant it was off the Angolan state’s balance sheet, and therefore outside any normal budgetary or political procedures, playing havoc with Angola’s ability to run a coherent budget.
26.Some economists, many with ties to the financial services industry and to tax havens, have tried to dispute these numbers—none successfully. In fact, the numbers are quite compatible with the only comparable official estimate available—a World Bank study from 1994, which estimated total capital flight from developing countries at $155–377 billion in 1992: Simply extrapolating this figure to 2006 dollars (using the IMF conversion rate of 287.2 percent) yields a figure of $443 billion to $1.1 trillion; evidence is, however, that the growth rate has significantly exceeded the inflation rate. For counterarguments and detailed discussions, see “Time to Bury the Oxford Report,” Tax Justice Network, July 16, 2009.
27.Léonce Ndikumana and James Boyce, “New Estimates of Capital Flight from Sub-Saharan African Countries: Linkages with External Borrowing and Policy Options,” Political Economy Research Institute, April 8, 2008.
28.Although one might argue that the problem of climate change is a bigger threat.
29.Letter to John Snow from Phil Gramm, February 19, 2003, republished by Center for Freedom and Prosperity, http://www.freedomandprosperity.org/ltr/gramm-irs/gramm-irs.shtml.
30.James S. Henry, The Blood Bankers: Tales from the Global Underground Economy (Thunder’s Mouth Press, 2003), p. 73.
31.“The Future of Money,” Wired News 4, no. 10 (October 1996), http://www.wired.com/wired/archive/4.10/wriston.html?topic=&topic_set=.
32.Eric Helleiner, States and the Reemergence of Global Finance: From Bretton Woods to the 1990s (Ithaca, NY: Cornell University Press, 1996), p. 177.
33.Michael Hudson quotes are a mix of the author’s interview with Hudson and “An Interview with Michael Hudson: An Insider Spills the Beans on Offshore Banking Centers,” Counterpunch, March 25, 2004, http://www.counterpunch.org/schaefer03252004.html.
34.Luca Errico and Alberto Musalem, “Offshore Banking: An Analysis of Micro- and Macro-Prudential Issues,” IMF, January 1999.
35.Todd Moss, Gunilla Pettersson, and Nicolas van de Walle, “An Aid-Institutions Paradox? A Review Essay on Aid Dependency and State Building in Sub-Saharan Africa,” Center for Global Development, Working Paper 74, January 2006.
36.“Address by Trevor Manuel, MP Minister for Finance of the Republic of South Africa,” 4th Meeting of the Forum on Tax Administration Cape Town, January 10, 2008.
37.Chinese ministry of commerce. Total for Hong Kong was $27.7 billion, BVI $16.6 billion; the next largest was South Korea, with $3.7 billion.
38.See, for example, “India Gets 43% FDI through Mauritius Route,” Press Trust of India, April 20, 2009.
39.It was a French colony until Britain invaded during the Napoleonic Wars.
40.Author’s interview with Elmer, 2009.
41.Telephone interview with Rosenbloom, December 1, 2009.
CHAPTER 8 RESISTANCE
1.“Harmful Tax Competition: An Emerging Global Issue,” Organization for Economic and Cooperative Development, 1998, http://www.oecd.org/dataoecd/25/26/44430243.pdf.
2.The last major attempt at attacking the havens had been the so-called Gordon report published by the U.S. Internal Revenue Service in January 1981: “Tax Havens and Their Use by United States Taxpayers—An Overview,” report to the Commissioner of Internal Revenue, the Assistant Attorney General (Tax Division) and the Assistant Secretary of the Treasury (Tax Policy), submitted by Richard A. Gordon, Special Counsel for International Taxation, January 12, 1981. This was almost entirely ignored.