MH Rajesh writes: Panama leaks have just filled our media and minds as the week opened. Some of the finds have been of relevance. However, beyond the news, there is a need to head for a consensus and policy in this regard, argues Rajesh
The Isthmus of Panama is getting some sunlight this week. If it was for opening a nautical conduit that altered global geography a hundred years ago, it’s a financial conduit for ill-gotten monies which have made it globally infamous today. A brilliant journalistic coup by a well-known German newspaper, the Süddeutsche Zeitung (SZ) in collaboration with the International Consortium of Investigative Journalists (ICIJ) with an impressive trove of financial data have exposed billions stashed away through shell companies facilitated by a firm in the isthmus. The well-heeled, blue blooded clientele were all managed by the Panamanian firm Mossack Fonseca that made its killing by facilitating the rich across the globe to get richer, by clever and often illegal means. In quantitative terms, with 2.6 terabytes of data, this can probably subsume all leaks thus far into its fold and covers a period from 1977 to 2015. The expose was facilitated by source material supplied by an informer who took no remuneration- that’s a silver lining in this otherwise grey story.
Given the international spread of this web, its ripples have been understandably large and will take some time for its exact contours to fully seep into the mainstream news. Several global leaders or their associates have been named in this scoop. UK, Ukraine, Iceland, Russia, Saudi Arabia, Argentina, China and Pakistan all have their heads of states or people close to heads of states linked to this leak.
Will such reports affect geopolitics? The simple answer is, yes, it indeed does. International relations are plain extension of domestic politics and are hugely dependent on the latitude of action available to the leaders. When that latitude and aura gets dented a little with such events, the degree and nature of their action could vary. To begin with, the leaders themselves, their aides and media managers in affected capitals could currently be busy crafting denials and strategizing a route out of the mess. Some have spoken and some have chosen silence. Even if the allegations were untrue, there is some lost ground which took precious focus away from the political ball. About five hundred Indians, mostly from business and entertainment community were named, according to media reports. The political impacts in India have therefore been negligible. However, neighbourhood hasn’t been as lucky. Pakistan Prime Minister Nawaz Sharif’s and Chinese President Xi Jinping’s associates have been listed in the media reports. Of some consequence are ICIJ reports that reveal that relatives of Politburo Standing Committee members, in China including Xi’s brother-in law owned offshore companies through Mossac Fonseca. In the context of a tectonic anti-corruption campaign steered by the President himself how such news will be treated domestically will be of interest.
Some of these investments could be ‘technically’ legal in respective domestic laws. Some could have happened before leaders took office given that the trove covered a period commencing from 1977. But there is little doubt that almost of all of this will fail the test of probity in public life and reputations. When one examines as to why wealth is spirited away to foreign shores at all, the answer becomes bit more complicated as this piece from the guardian shows us. If the current noise about Panama has been about volumes and politics, a little earlier in February there were the Swiss leaks by ICIJ itself. The Washington Post brought out a great piece based on that leak which showed that piles of cash often assemble strange bed fellows. Hold your breath here- USA, UK, Google, Apple, Starbucks, Fiat, the bad Kims, Amazon all appears in it together as if at a comic soap opera in this offshore haven drama. US and UK has offshoring havens within their country and the vanguards of information economies like Amazon and Google utilizes several off shore financial havens as per the report.
Here comes the role of global policies. Effects on personalities are transient in nature- they come and go from world stage and will be fallen or forgotten in due course. There is a larger global policy issue thrown up on offshoring debate with such shady firms as the Fonseca’s. This parallel economic system has not only facilitated laundering of money which is a white collar crime, but has shaded and protected criminals according to the report. Black money has been a cause for security concern globally. From drug, gun and sex traffickers to terrorists’ routinely taps into the easy flows of this dirty drain. It is in these exact offshore nodes that the twine of tax dodging elite in white collars meets its nefarious black collared other half making a common cause. If world has the will and wits in place it must utilise this opportunity and go for the jugular – which is the system and not just fiddle with the symptoms of alternate financial flows. Fonseca is just one cog of that juggernaut. With so many high and mighty irrespective of ideology, identity and legal status across globe in it should be of interest that India had to initiate a well-received global move against black money at the 13TH UN conference on Crime Prevention and Criminal Justice at Doha last year.
Till a global policy becomes a reality, some sunlight, naming and shaming is always good for the world’s underbelly. If true results are to be achieved, beyond the sleaze, we must straighten policy and have a global consensus over it. Let us hope Panama paves way for that.
Please follow the link for details