Our Island is overloaded with financial service companies that supply the mechanisms used for corruption, crime and tax avoidance in the developing world.

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The following letter in the Jersey Evening Post is too good not to reproduce. I do so with permission of the author:

From Jean Andersson.

TWO sentences in particular in the Jersey Overseas Aid Commission annual report caught my eye, and I would like to respond to these.

'Year after year Africa is provided with money, but it disappears into the bottomless pockets of corrupt officials and politicians,' stated the report. 'One can only hope that international aid agencies can keep their heads above water until Africa itself can find some way of standing on its own two feet.'

Of course there is corruption in Africa, but this is only a very small part of the real problem. Let's not take the moral high ground, as much of the corruption has been learned from the West and still operates there today.

And to say: 'One can only hope that international aid agencies can keep their head above water until Africa itself can find a way of standing on its own two feet' is not only simplistic, but displays an ignorance of how global economics work.

Yes, Africa has danced to the tune of the international community, allowed companies a virtual tax holiday so as to attract investment, and rich corporations and individuals have used the world's tax havens and banking systems to siphon money out of Africa

Back in 2004 Raymond Baker of the Brookings Institution quoted staff at the World Bank pondering the mystery of why so much development aid has done so little good. More recently he has prepared estimates that the World Bank considers the best available. He says that flows of illicit money, almost all of them through tax havens, cost the developing world between $500 billion and $800 billion a year. Placing that in context, aid amounts to just over $100 billion a year.

This money flows in our direction as well as to dozens of tax havens around the world. But it is our situation that concerns us and that we must look at more closely.

Our Island is overloaded with financial service companies that supply the mechanisms used for corruption, crime and tax avoidance in the developing world. Without the banks, lawyers and accountants working in this field, the tax haven would collapse. It is a painful truth that much of the business that goes on here is the cause of many grave injustices in the poorest parts of our world.

With capital flight from Africa so, too, is there a flight of people. One example highlights the problem. Malawi has one doctor to 36,000 people but has reportedly exported more doctors to Manchester (with one doctor to 550 people) than can be found in the whole of Malawi. Why have they left their own countries? It is simply that the countries cannot sustain them.

Back in 2005, just before the G8 summit, Charles Abugre, head of policy and advocacy at Christian Aid, wrote a paper entitled My Image of Africa. In it he stated: 'To address governance, governments have to first be relevant to the aspirations of their poorest. This means getting taxes from the rich and investing them in economic and social development.

'It means not only building roads and ports, but also providing teachers, public services, price and storage support to producers. It also means investment and research and development to help promote science in the interests of production. The state must rediscover its purpose in Africa.'
If such capital infrastructure existed in African countries, would doctors and other professionals leave in such numbers?

The Tax Justice Network points out that the capital held by tax havens, a large part of which is from developing countries, exceeds $11 trillion. If the returns on the capital were to be taxed at an average of 30%, it would generate more than $250 billion. This is double what rich countries are called upon to provide in aid.

It is admirable that people go to help the developing world, and in the short term we still need aid of this kind. Often those helping return enriched by their experience, receiving a lot more than they have been able to give. I speak from my own experience.

However, we need to put our own house in order. There is no way that the day will ever come when 'Africa itself can find some way of standing on its own two feet' because the world is inter-dependent and justice for Africa will only come when the developed world behaves in a fair and just way.

We would not need all this charity if justice prevailed. Justice will prevail when the tax havens of the world no longer offer a safe haven for those who are only concerned about their own well-being.

42 Clubley Estate,
St Helier.

You've got to be brave to say things like that in Jersey.

Thankfully there are brave people in this world. Jean Andersson is one of them.


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