Wednesday, 23 June 2010

The Budget - The Real Problem

In all the fuss about the Budget there was something that was not mentioned and given zero attention by the media. It is the extent to which a nation state like the UK is able to control its own financial economy. The answer to that is not much and the risk is that the nation states may start to disappear from the map. See the item below from Tax Justice Network:

What does not get measured does not get remedied

Over 30 years ago the British and American governments launched a massive experiment in opening up financial markets by abolishing exchange controls and de-regulating banking and related financial services. This experiment proceeded in full knowledge that financial markets are riddled with fiscal distortions and shaded in secrecy. Following Gresham's Law, the experiment has led to a vast increase in illicit financial flows and related economic crime. Developing countries have been the principal victims of this process as huge amounts of capital have flowed northwards into the major global financial centres in Europe and North America. Secrecy jurisdictions have played a central role as conduits for these flows; and they have thrived accordingly (80 percent of the top twenty states and sub-states ranked by the CIA by gross domestic product per head of population are classified by TJN as secrecy jurisdictions).For obvious reasons the scale of cross-border illicit flows is unknown and can only be estimated using a variety of available tools, some of which you can read about - in summary form - in a just-released briefing paper by the renowned anti-corruption centre at the Chr. Michelsen Institute in Norway.TJN and our allies have argued for many years that the scale of illicit financial flows and economic crime conducted via offshore secrecy jurisdictions has reached proportions that impact on macroeconomic stability while also undermining law and order, democracy and the welfare of the vast majority of people.


It is almost as if we are trying to live on two parallel planets and the old one is fading out.

1 comment:

  1. You make a very good case, Demetrius. However ultimately a nation can rebel and often has in the past. Trouble with The Brits it takes for ever to wake the buggers up!