Government Issues Facing Developing Africa

Leading your country and being responsible for the future well-being and prospects of all your people is surely the greatest honour that can be bestowed on any man or woman. And any person rising to this lofty position of responsibility should be determined, first and foremost, not to let their people down.

Anyone assuming the mantle of leadership could consider heeding the advice of Sir David Brailsford, currently leader of Team Ineos (formerly Team Sky now Ineos Grenadiers) and ex-performance director of British Cycling, who put British cycling on top of the world. Writing in 'The Times' he gave his opinion on successful leadership. 'Is it fit for purpose? Have we got the right people in the right places who have the knowledge, skills, and expertise to lead? Leadership is about having a long-term perspective, dealing with change, inspiring others with a vision, asking why and why not, and not just how. It's about having drive, values and beliefs and setting standards of behaviour and influencing and empowering everyone to live them on a day-to-day basis.'

In seeking to find this leadership a wise head of government should bear in mind 'AID'. But not the kind of overseas aid given by rich countries, which so many poverty campaigners insist is vital for development, for this 'AID' is far more important. Taking advantage of real and effective 'AID' comes through appointing men and women with Ability, Integrity, Drive to head up the various departments of government/civil service. And merit should be the continuing determinant in all further appointments: nepotism, where family and friends are favoured, should be avoided at all cost. All government ministers should then be required, under oath, to make a declaration of total assets held when appointed. They should also have to relinquish any directorships/interests in corporations. At the same time government ministers and civil servants should all be well paid with the proviso that anyone found to be involved in any form of financial irregularity will be immediately dismissed and pursued for compensation.

Being part of a government, as well as prestigious, is a huge responsibility and it is important for all ministers to take their jobs seriously. That means trying to add value, not extract funds, from their time in office.

Right at the start any president/prime minister will be keen to ensure that the institutions of the state are trusted and competent. It is fundamental for governments to continue to seek to uphold the rule of law, build up the legislature, maintain the independence of the judiciary/central bank/police/press and to protect human rights. At the same time, devolved powers should be given to regional and district authorities so that local people are encouraged to engage and have their voices heard.

Within days of being elected the president/prime minister will also be keen to get down to the business of trying to improve people's lives, particularly the poorest, by giving them the tools to help themselves. For in the words of US President Ronald Reagan 'the greatest leader is not necessarily the one who does the greatest things; he/she is the one who gets the people to do great things.'

And with this in mind a good place to start, particularly in Africa, would be to grant people title to their own land. African lives would be energised and potentially change overnight if they were permitted to own their homes and fields which would allow them to borrow money to make improvements. Currently most land on the continent is vested in local chiefs and in towns and cities in local government which means that it can't be used as security leaving people little chance to borrow money to forge advances to their way of life.

Through time increasing production of goods and services should advance human development by generating the tax revenues for spending on social priorities.

Education is a vital necessity and plans should be drawn up to ensure that ALL children have access to at least free primary school education. In African countries where numerous tongues* are spoken, English or French, perhaps depending on history, should be taught in schools as a second language whilst all pupils should have a solid grounding in grammar, mathematics, science and technology. In time the aim should also be for universal free primary as well as secondary education with the more able pupils going on to college or to university. The training of the young to high standards is essential in our globally competitive world. (*In Kenya there are 43 different tribal groups all with varying languages)

Steps should also be taken to source and secure water supplies, improve sanitation and encourage good hygiene. It is reckoned that every US$1 spent on water, sanitation and hygiene in the developing world gives a return of US$9 - mainly through better health. Maintaining good health in the population is vital and plans should be developed that seek to establish medical facilities throughout the entire country as soon as enough nurses and doctors can be found or trained.

Infrastructure, too, is of great importance and should be upgraded so that good transport and communications can be established which would allow food supplies to be easily moved around the country. Power shortages should also be tackled.

For the old, the sick and the unemployed, there is in the West, a welfare system: pensions for the old, incapacity benefit for the sick and unemployment benefit/jobseekers allowance for the out of work are now accepted as vital support for those in need.

But deviating for a little, what is wrong, especially in the developed world, for the unemployed not to be doing some kind of 'voluntary' work e.g. tidying up cities/towns/villages or rivers/shores, supporting the old and frail or even charity work in return for benefits? Taking the UK as an example those on jobseekers allowance, which currently stands at £90.50 per week from April 2024 for those over 25, and with the living wage there currently set at £11.44 per hour, why shouldn't able-bodied claimants not be expected to do voluntary work for just 8 hours a week? (£90.50/£11.44) Now what would this pragmatic approach to unemployment do? It would not only give a face-lift to local communities, it would get the jobless out of their homes at least once a week, motivate them, help them keep fit and active and meeting people, and give them a sense of pride. Those seeking work should not be denied just because they can't find a permanent job whilst those of a lazy bent should not be permitted to sit at home everyday and contribute nothing in return for taxpayer support. The bottom line should be the expectation that all able hands should contribute something towards their communities. So maybe here, with this kind of positive approach, Africa could steal a march on the West!

(In other parts of the world, particularly in east Asia, family support plays the vital role in supporting family members who have fallen on hard times.)

When it comes to corruption, examples of this are not just found in the developing world as the recent case involving FIFA, football's governing body, showed with unexplained payments and allegations of flawed bidding in the award to Russia of the 2018 World Cup and to Qatar in 2022. Who wants to play football in the seering heat of Qatar anyway where new stadia needed to be built to accommodate the tournament and then apparenly immediately dismantled as there is no local need for them? That was a reprehensible decision by FIFA and the bidding should have been rerun. And it seems that FIFA is again open to accusations of questionable ethics when the 2030 and 2034 World Cups are set to be given without question to Spain, Portugal and Morocco in 2030 and then to Saudi Arabia in 2034.

However, corruption is more prevalent in developing countries where the opportunities are greater. There corruption comes in many guises including favouring friends for government contracts, police using protection rackets, faking the number of pupils/teachers at schools, stealing from employers, etc. And it usually has a devastating effect on economic life. In order to remove this blight the president/prime minister should set an example by setting up an independent body with power to investigate anyone at any time including himself/ herself and all government ministers/civil servants. This will reassure the people and any would be international investors that the government is working diligently for the good of the country. Media freedom, too, would further help expose corrupt practices whilst helping to keep the government on its toes.

In an age when boundaries are virtually guaranteed, is there any need for poor nations to spend billions of dollars accumulating sophisticated arms? For procuring expensive weapons surely is a waste of valuable foreign currency and is a major area for gross embezzlement. Most governments in the West now say they no longer supply arms to the poorest countries. We have to take their word for that but rich countries should go further and extend this ban to include all developing countries. Internal security should be the responsibility of the police backed by an army of appropriate size and border disputes should always be settled by continental organisations like the African Union, or the UN. War should be avoided at all costs for it destroy in days what has taken years to build. A good leader should never forget this.

(Costa Rica, in Central America, abolished its army in 1949 and now, sitting at 44 out of 195 in the just1WORLD league table 'in a league of their own - how all the world's governments compare', the country has never looked back. Meanwhile near neighbours Nicaragua, Guatemala and Honduras, which became independent at the same time, languish below 130.)

At the same time if any part of a nation wishes to breakaway, as South Sudan did from Sudan in 2011, it should be allowed to do so. No nation should hold a people against their wishes when they express the desire to be independent and free and to take their place in the world. And here it should be said that any government which allows part of the nation to go its own way shows maturity and deserves the highest respect for this magnanimous outlook. One word of warning here though. It will cost a massive amount to set up a new administration along with embassies, border posts and the re-negotiation of trade agreeements etc. Sadly the case of South Sudan is an unfortunate example for the government in Juba have not been up to the task and have led their people through a vortex of misery. This is unacceptable and they should not embarrass themselves further and step down.

Putting all these policies into action will not be easy and for a long time social and economic indicators may show few signs of positive change - like attempting to turn round of an ocean liner. Some people may even become critical and the government, eyeing an election ahead, may start to reach for easy options. But these calls should all be rejected. If a government is unwavering and seen to be honest and competent and working for the good of all the people, then the electorate will probably want to give that government a longer period for their policies to show results. For there is no alternative - history declares that better living standards can only be underwritten through an expanding economy.

So there should be no walking away when the going gets tough - governments need to stay focussed. And when their policies start to show results the economy will move forward rapidly, poverty indicators will decline, flight capital will start to return from abroad and even educated nationals who have been living abroad may consider returning. For at the end of the day there is no real debate: good government is the real 'wealth of nations'.

(According to the Economist the best way for a country to get rich in this digital age is still the same: stay open to trade, try to compete in global markets, invest in infrastructure and education and uphold the rule of law.)

You would think, then, that good governance would be the first priority of the United Nations (UN). But you would be wrong. Even though ALL UN members have signed up to the UN Declaration of Human Rights, too many leaders are still unable or unwilling to lay the foundations for social justice and economic advancement preferring, instead, to run their countries as their own private fiefdoms. And, all too often, there is no challenge from any authority anywhere, no matter how repressive a regime.

At the very least, though, when it comes to the giving of overseas aid, surely the rich developed nations of the world would seek to give their taxpayers money to governments in the developing world which are progressive so as to encourage good practice. Alas, here again you would be mistaken for due to a combination of political posturing, security intelligence, the need to secure vital supplies of natural resources, historical connections or the fear of being superseded by China, it means that, for most OECD countries, the quality of governance in the developing world is not a priority.

The continuing losers in all this, of course, are the ordinary people of Africa who continue to eke out an existence from the land as they have done since biblical times.

In 2024, more than 75 years on from the setting up of the United Nations, this seems totally incomprehensible and surely those far-thinking political leaders who helped create the UN in 1945 never envisaged that there would still be no minimum standards of governance after all this time. But sadly that is the reality - and it is set to continue. For in the new UN Sustainable Development Goals comprising 17 goals (and 169 targets) which replaced the Millennium Development Goals, under pressure from African leaders, good governance does not feature as one of the goals. Definitely an own goal by the UN! But then the UN lacks unity in too many issues and today is described by some as a tired, sclerotic bureaucracy incapable of bringing an end to the many wars across the globe.

So today, the quality of governance throughout much of the developing world is the ELEPHANT IN THE ROOM: everyone knows it is a fundamental problem in most developing nations but no western government, no multilateral organisation, no international NGO, few media organisations, no church and certainly no pop group, not even Bono and his ONE campaign, appear prepared to confront it. Yet Black Lives Matter. But apparently not in Africa!

There is an acceptance in our modern age that democracy is the gateway to good government or as Sir Winston Churchill once put it 'democracy is the least worst form of government'. And remarkably this form of government was first attempted in Iceland as long ago as AD 930 with the setting up of the 'Althing' - the world's first parliament.

Democracy* is the only political system that guarantees free expression whilst helping to protect the people from social, economic and political catastrophes. This form of government where the people are allowed periodically to freely choose their own leaders encourages positive renewal as defeated political parties need to keep reshaping their policies in order to make themselves electable at the next poll. Today, according to Freedom House, it is estimated that real democracy, where free and fair elections are held regularly, is now found in 85 countries representing 53% of the population of the world. Of the other countries in the world, some are pseudo democracies where, although there are periodic elections, the ruling party is singularly adept at retaining power and where, if the worst comes to the worst, in the words of ex-Soviet leader Jo Stalin, "it's not who votes that counts, it's who counts the votes." In yet other countries autocratic regimes and military dictatorships range from the semi-tolerant e.g. China, Cuba to the reprehensible e.g. North Korea, Syria.

Many countries in the South, particularly in sub-Saharan Africa, have struggled to come to terms with democracy. There the political landscape that exists today is the result of the carving up of the continent by the European powers at the Berlin Conference in 1885. Into the melting pot went 10,000 kingdoms, tribes and federations mixed up with Christians, Muslims and other religions and when they came out they had metamorphosed into just 54 countries which for the most part were then ruled over by the colonial powers (UK, France, Spain, Portugal, Belgium, Germany) until most gained independence in the 1960’s. Little training in administration was given to the indigenous people by their colonial masters and the few institutions that had put down roots in these countries struggled to survive after independence. And so with no middle class, tribal and religious conflicts breaking out and the political manoeuvrings of the Cold War pulling countries in different directions, it was little wonder that many of these newly independent states found themselves at the mercy of unscrupulous autocrats and military dictators as soon as the 'liberty' bell had been rung.

And that can be seen today as according to Freedom House, in 2022, only 9 countries in sub-Saharan Africa are considered to be democratic - Botswana, Cape Verde, Ghana, Lesotho, Mauritius, Namibia, Sao Tome & Principe, Seychelles and South Africa. At the other end of the scale the rule of despots backed by the military still dogs too many nations even after 50 years of independence - Angola, Burkino Faso, Burundi, Cameroon, Central African Rep., Chad, Congo Republic, Democratic Republic of Congo, Djibouti, Equatorial Guinea, Eritrea, Eswatini, Ethiopia, Gabon, Mali, Mauritania, Rwanda, Somalia, South Sudan, Sudan and Uganda.

*For many younger people in the West democracy is now being questioned, particularly in the English-speaking world. If you look at former President Trump and some of his outrageous statements you can understand why. But it is more than that: democracy in its essence is governance by the majority. Presdent Trump did not win the popular vote in 2016 losing by 3 million votes to Hillary Clinton yet the electoral college secured him victory. How can that be democracy? Also, in the UK, Boris Johnson did not win the 2019 general election for his party only secured 43% of the vote but was enough to give him a majority of 80 seats in the UK parliament. How can that be fair for it also meant that smaller parties were massacred! How can you govern for 'all of the people' if you do not even govern for the majority?

From the table it can be seen that total ODA in 2021 amounted to US$185.9bn after US$161.2bn in 2020 and US$152.8bn in 2019. Previous figures run at US$153.0bn in 2018 and $146.6bn in 2017. In 2016 ODA totalled $145bn after $131.5bn in 2015. For the rest of this century the figures were $137.2bn in 2014, $135.1bn in 2013, $126.9 in 2012, $133.7bn in 2011, $128.5bn in 2010, $119.8bn in 2009, $122.3bn in 2008, $103.7bn in 2007, $104.4bn for 2006, $106.8bn in 2005, $79.6bn in 2004, $69.1bn in 2003, $58.3bn in 2002, $52.3bn in 2001 and $53.1bn in 2000. The total for 2021 represents 0.33% of rich countries' combined Gross National Income against 0.30% in 2019. (Over the last 50 years developed countries are reckoned to have given more than $3.8 trillion in foreign aid.)

In 2021 Luxembourg leapt to the top of the ODA League Table with 0.99%GNI followed by Norway with 0.93% and Sweden with 0.91%. Then came Germany and Denmark with 0.76% and 0.71% respectively. Those are the only 5 nations reaching the 0.7%GNI target. Bringing up the rear are Czech Rep., Greece, Slovakia, Poland and South Korea.

The US, the largest donor nation in total with $47.8bn, provides aid to more than 100 countries with Afghanistan, Israel, Jordan, Pakistan, Iraq, Kenya, Ethiopia, South Sudan, Tanzania and South Africa heading the list in 2021. Germany, Japan, UK and France are the next largest donors.

The EU (incl UK) remained the largest donor group investing US$99bn, more than 50% the world total.

Luxembourg, Norway, Sweden, Germany and Denmark surely deserve to be congratulated on meeting their international obligations again in giving 0.7%+ GNI annually in aid. Governments in these 5 nations, it seems, really do believe that their contributions help to make a lasting difference to people's lives in the developing world.

Another way of looking at these figures could be to say that every Luxembourger contributes US$845 annually to the developing world in aid whilst each American only hands over US$144. But Official Development Assistance (ODA) only shows each government's support for international development; it does not take into account donations from private individuals in each country. When these are taken into account the US comes out much more favourably. For example, Bill Gates, founder of Microsoft, through the Bill and Melinda Gates Foundation, has invested heavily in helping combat HIV/Aids in Africa, family planning, medical research etc. Together with Warren Buffet, chair of Berkshire Hathaway, Gates has promised to give away the bulk of his wealth in his lifetime mainly to help tackle suffering in the developing world. The Bill and Melinda Gates Foundation takes the giving of aid so seriously that it supposedly tracks every dollar to ensure it buys what it is intended to buy. Gates and Buffet have also signed up more than 175 American billionaires to do likewise as part of the Giving Pledge. In the US philanthropy seems to be celebrated as part of the nation's culture with an estimated 98% of top taxpayers giving, on average, 7.4% of their income to charity whilst 35% of American workers give to charity through the tax-efficient payroll system.

(Comparable figures for the UK show a shocking comparison. Only 7% of top taxpayers give away more than 1% of their wealth and only 12% give anything to charity at all. It is estimated that 4% of employees in the UK give from their pay packets.)

As UK prime minister Tony Blair's Commission for Africa report in 2005 highlighted, many countries in Africa suffer from a lack of expertise not just in organisation and administration but in many technical fields as well. As a result new ideas and projects are often instigated but then when difficulties are incurred things fizzle out. This is underlined by the staggering fact that only 1 in 6 World Bank projects set up in Africa continued after funding ceased. Rich countries abound with people with a great number of skills desperately needed in Africa. As a further approach to using ODA more effectively then rich countries could send experts to work with individual governments to help implement future development plans throughout the country. This could involve helping to secure food supplies by advising on different seed varieties/ fertilisers, searching and securing sources of water, reducing the energy deficit by exploiting solar/wind/hydro power, helping to improve the physical infrastructure of the country and developing telecommunications. Assistance with the provision of health and education could also be given. The value of this kind of technical assistance is further underlined by Paul Collier, Director of the Centre for the Study of African Economies at Oxford University who argues, in his book The Bottom Billion, that 'demand driven technical assistance adds US$15 for every US$1 spent.' At the same time nationals of each country could be trained in numerous relevant skills on the job. (China is already doing many of these things).

Whilst technical assistance points the way to extraordinary value in development, donor countries should also make it clear that the continuing flow of ODA to any country is dependent on better governance. The Meltzer Commission set up by the Clinton administration in the US concluded that foreign aid should be targeted to where it can be used best. To this end it recognised that aid fosters development only if officials in recipient countries willingly promote and sustain reforms. Further evidence here lies in a report by the World Bank which concluded that an annual increase in aid of $10bn would take an extra 25m people a year out of poverty if it was targeted at poor countries with governments adopting progressive policies; spread across the board, the same amount would lift only 7m people out of poverty.

Together, then, technical assistance combined with the targeting of aid at the better governed developing countries would appear to deliver a win/win situation for poor people. Direct technical assistance would help those immediately involved whilst the whole country would benefit from improving governance. Yet this is something that the UK and other OECD nations seem reticent about and give too little weight to. In fact the UK should offer to educate/train future potential leaders, on a continuing basis, in areas of government, civil service and the public sector and so help to ensure that governance continues to improve in poor countries going forward.

However, in this whole debate on the giving of overseas aid there are still the sceptics. Many people still view aid as wasteful, often going to criminal, corrupt and complacent regimes and seldom finding its way to those who need it most. For some people like Lord Bauer, it is 'the transfer of money from poor people in rich countries to rich people in poor countries.' And he may be right. For a report by the World Bank 'Elite capture of foreign aid' in February 2020 suggests that the higher the amount of aid received relative to the GDP of the recipient country, the greater the leakage to tax havens. In such countries it is estimated that 15% of the aid received 'leaks out'. That is because the countries attracting most aid are usually the least developed and among the worst governed.

For 2021 Afghanistan was the largest recipient of UK bilateral aid with £187m followed by Nigeria £140m, Pakistan £128m, Ethiopia £120m, Yemen £114m, South Africa £102m, Somalia £101m, South Sudan £96m, Sudan £94m and Syria £91m. The next ten countries were India £91m, Bangladesh £87m, D R C £73m, Kenya £72m, Myanmar £66m, Uganda £64m, Jordan £62m, Tanzania £61m, Nepal £59m and Lebanon £58m.

In 2021, multilateral ODA totalled £4.3bn. The main beneficiaries here were the European Commission Development Budget 16%; the World Bank International Development Association 15.7%; the European Commission - European Development Fund 14.8%; the Global Fund to Fight AIDS, Tuberculosis and Malaria 8.9% and Green Climate Fund 6.6%.

Previously DfID has been accused of dumping billions of pounds in obscure World Bank trust funds in an apparent attempt to meet the country's annual target for aid. According to a senior aid consultant DfID gives large sums to trust funds in order to fulfil Britain's requirement to spend 0.7% of GNI annually when time is about to run out. And sometimes that money can sit in there for years it is claimed.

DfID also channeled £0.3bn through CDC, the government's private equity division. And projects that have been financed by CDC recently include several large shopping malls in Nigeria, an Indian online fashion retailer, a chain of electronics stores selling iPhones in Egypt, Chinese budget hotel franchise called '7 days' as well as restaurant chains in Vietnam, India and Peru. According to Global Justice Now this is a betrayal of the whole point of aid for the evidence that these investments are effective at tackling poverty is absolutely minimal. Nick O'Donovan, CDC chief executive, took home a salary of £340,000 in 2019. The company employs 290 staff, half of whom take home a salary exceeding £100,000.

At the same time, it might come as a bit of a surprise to some to learn that millions of pounds of DfID's budget are spent in the UK every year in some esoteric areas. According to ICAI in 2018 grants were being given for student fellowships which included £110,000 for a biography of the Boer leader Paul Kruger; £98,000 for a student from Brazil to examine the work of the Roman orator Cicero as well as £72,000 on the study of jazz in the Western cape. Also, in 2012, £12m went on projects like global citizenship lessons in Scottish schools, military and security training for officials from African countries at the UK's Defence Academy, and a study visit to the UK for North Korean officials. Also counted as ODA are cultural and scientific promotions by the Foreign Office to serve diplomatic goodwill. Under this banner come touring Shakespeare plays and zoological initiatives.

(According to the UK Taxpayers Alliance, £730m (9%) of UK overseas aid never made it to the communities for whom it was intended in 2009.)

By 1997, Jubilee 2000 was becoming more influential and better organised having won the support of the churches, and international NGO’s working on poverty relief in the developing world. With this backing, and catching the mood of the time, Jubilee 2000 now started to make waves and at the G8 meeting in Birmingham in 1998, it mobilised an astonishing 70,000 supporters to form a peaceful human chain round the building where that year's G8 meeting was due to be held. On the same day 1,500,000 signatures from 50 countries were presented to Clare Short, the UK International Development Secretary. The result - just four hours later - a promise from Tony Blair and world leaders to cancel US$50bn of the debts of the world's poorest countries. For President Bharrat Jagdeo of Guyana who was there 'this is a tremendous inspiration, a defining moment in history.'

Rising media coverage, increasing international build up, along with support coming all the way from the Pope to the pop world, meant that Jubilee 2000 was now on a roll. In 1999, a human chain consisting of 50,000 peaceful demonstrators snaked its way round the centre of Cologne where the G8 was presented with the latest number of signatures on the petition - 14,700,000. In another impressive display of people power, the G8 now doubled the amount of debt relief to US$100bn. By December 1999, through bilateral promises, that figure had increased to US$110bn.

With all this money piled up on the table, inevitably expectations had raced far ahead of reality. To qualify for debt relief a country had to draw up a Poverty Reduction Strategy Paper highlighting how it intended to use the money saved as well as how it planned to promote economic growth. The IMF and World Bank then had to pass the paper. On agreement, each country then had to reach a Decision Point when their debt was crystallised and later a Completion Point where the final amount for cancellation was calculated so as to leave each country's debt on a 'sustainable' level. However, according to many economists and international aid agencies, this still left the world's poorest countries with an intolerable burden.

Under the HIPC Initiative loans totalling more than US$80bn have been written-off the books of the 36 countries which have already reached the HIPC Completion Point. These countries are - Afghanistan, Benin, Bolivia, Burkina Faso, Burundi, Cameroon, Central African Republic, Chad, Comoros, Congo Republic, Cote d'Ivoire, Democratic Republic of Congo, Ethiopia, Gambia, Ghana, Guinea, Guinea-Bissau, Guyana, Haiti, Honduras, Liberia, Madagascar, Malawi, Mali, Mauritania, Mozambique, Nicaragua, Niger, Rwanda, Sao Tome & Principe, Senegal, Sierra Leone, Tanzania, Togo, Uganda and Zambia.

In total it will save these 37 countries $3.3bn annually in interest payments which will now be ring fenced and be made available for investment in health education, clean water and infrastructure.

A good example of how these savings were put to good use was in Uganda, one of the first countries to receive debt relief under the HIPC Initiative. Here all money saved went into a Poverty Action Fund which was monitored by civil society under the Ugandan Debt Network. Some of this money helped to build new classrooms in schools. This meant that primary school attendance rocketed from 2.5 million to 7 million in just four years after debt repayments were reduced in 1997. In total it is estimated that 52 million children today in the developing world can trace their education to Jubilee 2000 and debt cancellation.

* Jubilee 2000 was set up as a time limited campaign (1994-2000) seeking to convince rich countries and international institutions of the need to help the world's poorest countries by cancelling their unpayable debts as a generous and pragmatic celebration of the millennium. In these 7 years the Jubilee 2000 petition gathered 19.6m signatures from 165 countries making it the largest international petition. And taking the amount of debt relief promised by the G8 at December, 2000 - $110bn (£74bn) - this meant that each signature was worth $5,610 (£3,740). None of us regularly sign cheques for £3,740 yet each signature, often from people who had literally nothing else to give, was worth this large sum.

And in what could possibly be claimed to be another record, the total income of Jubilee 2000 from 1994-2000 was in the area of £5,000,000. If we take again the total debt relief promised by the G8 and the international institutions - $110 bn (£74bn) - it means that every £1 donated returned an incredible £14,800. Some investment return!

Furthermore those supporters of Jubilee 2000 who went to Birmingham in May 1998 and took part in forming the human chain round the Conference Centre can EACH proudly claim to be responsible for 60 children now being in primary school in Uganda, the first country to receive debt relief.

And so, within the space of just 7 years, this small group of people who set up Jubilee 2000, which later became Jubilee Debt Campaign, saw their dream realised and as a result many people in poor countries are no longer being born into debt. And for Martin Wolf of the Financial Times 'Jubilee 2000 had become the world's most effective single issue initiative. Some ordinary idea, some extraordinary people!'

for more information and latest campaign news see www.debtjustice.org.uk

Today, in 2023, it is estimated that total debt owed by governments, companies, and individuals to governments, companies and individuals is US$101 trillion. This is equivalent to US$13,000 (£10,000) per person or 113% of global income.

Left unchecked corruption chokes progress by constantly gnawing away at the very heart of economic development. Corruption undercuts the state's ability to raise revenues, leads to higher taxes, robs people of their wealth, poisons human relations, paralyses initiative, discourages investment in new enterprises, encourages dealings in the 'black market', promotes conflict and destroys confidence in government institutions. All of which ensures sclerotic economic growth and consequent under investment in vital areas like health, education, agriculture, water and infrastructure.

Examples of corruption can be found in rich countries as well as poor. At one time recently four of the past seven governors of the US state of Illinois went to prison for corruption. And in 2015 several UK MPs were found to have been abusing their expenses allowances. At the same time, respect for commercial banks in the UK has never been lower as a result of scandals which include pensions mis-selling, endowment mortgage fraud, the payment protection insurance scam, LIBOR rigging, tax evasion and insider trading. Also London-based HSBC was found to have had lax controls that allowed Latin American drug cartels to launder hundreds of millions of dollars which resulted in a fine of US$1.9bn (£1.55bn). And in November 2022 the directors of Glencore, the Anglo-Swiss multinational commodity trading and mining company, pleaded guilty to charges of bribery to gain contracts mainly in sub-Saharan Africa. This after the company agreed a $1.1bn settlement with the US Department of Justice for bribing foreign officials as well as settling bribery allegations in Brazil. Then there was the racketeering that has gone on in football (soccer), the 'beautiful game', under former president Sepp Blatter at the Zurich-based FIFA, the governing body of world football shamefully awarding the 2018 and 2022 World Cups to the highest bidders - Russia and Qatar. Afterwards the US Justice Department charged most of Blatter's FIFA executive alleging that they accepted multi-million dollar kickbacks over many years and which resulted in Blatter having to stand down. Then in athletics, Lamine Diack, the former head of the International Association of Athletics Federations (IAAF), was found guilty of corruption and money laundering whilst the World Anti-Doping Agency (WADA) levelled allegations of cheating and doping against athletes from several countries including Russia, Turkey, Kenya and Ukraine saying that authorities in these countries turned a blind eye.

Most Corrupt Countries

Corrupt Leaders

And some more recent reprehensible examples of corruption from sub-Saharan Africa include:-

a) in the 2020 Forbes list of 'The World's Billionaire' in 1020th place, with assets totalling an estimated US$1.5bn, sat Isabel dos Santos, 45 year old daughter of Jose dos Santos, the former president of oil-rich, people-poor Angola from 1979-2017. Now the Angolan authorities has frozen her assets as well as those of her husband, Sindika Dokolo, claiming they were stolen thus laying the foundations for a long legal battle. She denies the allegations claiming her fortune was earned legitimately. Isabel, former chief of Sonangol, the state-owned oil company, is the first African woman to enter the Forbes list. Sources of wealth include large stakes in Portuguese media and financial companies building on her holdings of stocks in Angola's largest bank, Candando supermarkets, a cement company and a 25% share in the telecommunications company, Unitel. She also retains a London mansion worth US$30m as well as art work by Andy Warhol. In total the government of Joao Lorenco estimates that the country lost US$24bn under the administration of Jose dos Santos. Her brother, Jose Filomeno dos Santos, in August 2020, was given a jail sentence of 5 years for embezzlement and fraud from his tenure of running Angola's US$5bn sovereign wealth fund.

b) according to French officials Denis Sassou Nguesso, president of the Republic of Congo for the last 25 years, owns 24 estates and operates 112 bank accounts in France. His daughter, Claudia, has an apartment bought for US$7m in the Trump International Tower, paid for by a Brazilian company with close connections to the president, according to Global Witness.

c) Teodorin Nguema Mangue, son of the president of Equatorial Guinea, amongst much else, owns a Gulfstream jet, 8 Ferraris, 7 Rolls Royces, 2 Bugattis and a 12 acre estate in Malibu valued at US$38million. This guy, the country's vice-president, playboy and annointed successor to his father, was fined US$30million by the US Justice Department in October, 2014 over allegations of corruption and money-laundering on a grand scale. In another trial on 2 January, 2017 at the International Court of Justice in The Hague he was accused of laundering tens of millions of Euros in France and confiscated his assets worth US$35million. His former butler described Teodorin's lifestyle in France in three words - 'alcohol, whores and coke.' Meanwhile Switzerland seized 24 of his supercars.

d) Karim Wade, son of the former president of Senegal, Abdoulaye Wade, is currently under arrest accused of illegally amassing US$700,000,000 during his father's rule. During that time he held so many ministerial posts that he was dubbed 'minister of earth and sky.'

e) according to Nigerian based 'Ventures' magazine, Ngina Kenyatta, mother of former President Uhuru Kenyatta, has amassed a fortune in excess of US$1bn. At the same time, according to Forbes Magazine, the Kenyatta family owns 500,000 acres of prime land spread throughout the country and has stakes in Kenya's largest dairy Brookside, media company Mediamax, Heritage Hotels and Commercial Bank of Africa. In all, it is estimated that 50% of Kenya's wealth is in the hands of the political elite.

f) after President Omar al-Bashir of Sudan was deposed on 11 April 2019 a huge stack of cash amounting to the equivalent of US$130 million was discovered at his palace.

g) South Africa's power supply company Eskom is being crippled by shameless looting by ANC politicians and state executives which results in rolling daily blackouts occurring. Some estimates say these could last for 5 years! In total Eskom's debt has spiralled up to US$27bn (£22.1bn).

h) according to TI US$100bn has been looted by Zimbabwe's political elite since independence in 1980 forcing Zimbabweans to their knees/emmigration.

In 1887, Lord Acton stated that 'power corrupts and absolute power corrupts absolutely. Great men are almost always bad men.' Since independence swept over the continent in the 1950s/60s for Africa, at any rate, this maxim would appear to hold true.

But it didn't have to be like this. Contrast Africa with what happened in south-east Asia in the last 60 years. For example, at independence in 1965, the prime minister of Singapore, Lee Kuan Yew, recognised that in order to attract foreign investment which would deliver jobs one of the first things he would need to do would be establish trust in the country. To this end he established the rule of law, made the judiciary independent and set up a Corrupt Practices Investigation Bureau with the power to investigate any minister or civil servant right to the very top. Anyone found guilty of embezzlement would immediately be dismissed. The rest, as they say, is history and today Singapore is one of the most advanced nations on the planet. If African leaders had been less predatory and more pragmatic their people would not living in semi-slavery today.

Tackling Corruption

As mentioned above the Transparency International Corruption Perceptions Index for 2023 shows that only 5 African nations recorded a score of 5 or above - Seychelles 7.1; Cape Verde 6.4; Botswana 5.9; Rwanda 5.3 and Mauritius 5.1. And of these countries 3 are island states. That means on the entire African mainland only TWO countries are more honest than corrupt which means that 46 nations are failing their people. And nothing will change anytime soon for most African leaders seem to take the view of Hifikepunye Pohamba, former President of Namibia, who stated in a speech in March, 2014 that it is 'not for me as president to investigate corruption.' By signalling such inaction it suggests that he is condoning corruption and it is time for the outside world to waken up and recognise that this is the situation throughout most of Africa.

When white minority rule persisted in South Africa it wasn't long before campaigners of the like of Bishop Trevor Huddleston set up the Anti-Apartheid Movement which resulted in sanctions being levelled on the white South African government. After many years this eventually led to the release of Nelson Mandela from prison and, in time, black rule. But black rule right throughout the continent has only ever encompassed minority rule. For in most African nations the ruling class cling on to power at all costs meaning those in power have the freedom to do what they want and for as long as they want. And for those elites corruption has become a way of life. So where are the campaign groups in the West today protesting against this injustice? They are nowhere to be seen for they fear being accused of racism or neo-colonialism. But it can never be racist to condemn the robber barons in governments across the continent whose profligacy deny children proper schools and families food, clean water and decent medical centres. At the same time roads remain potholed, overgrown and unmade whilst power supplies remain unpredictable at best.

That is why it is time for Western governments, international NGOs, rich Americans, churches, pop star philanthropists and poverty campaigners to face reality and to start to challenge governments who rob their people of a decent life. To this end all Overseas Development Assistance (ODA) and investment in countries where corruption goes unchallenged should be re-directed until it can be seen that leaders there are starting to take the problem seriously and doing something about it.

And that fight against corruption will need to be relentless - day in, day out, year after year - until the message finally gets through. For unless the leader of a country leads by example in his/her determination to confront corruption and is seen to be doing so, NOTHING WILL CHANGE.

One of the first things the president should do is to insist that all government ministers and top civil servants declare their assets in total highlighting any foreign bank accounts. He/she should then set up an independent anti-corruption commission to investigate all claims of misappropriation in the public, private and voluntary sectors. This body should have the power to go right to the very top and no one, not even the president, should be immune from any investigation mounted. Penalties should be harsh for wrongdoers and steps taken to recover the proceeds. But the leader should go further still by getting all sections of society involved in reporting unlawful practices. It should not just be a task for police forces but for everyone who comes across abuses.

Then to back all this up the following also needs to happen:-

• training and paying decent salaries to civil servants/ police / medical staff and teachers on time every month so that they are in a position to lead by example.
• privatising state assets - monopolies are a breeding ground for corruption. A government’s job is to govern and create the infrastructure to look after the well-being of its people. In seeking to do this it should concentrate on securing health and education services for everyone as well as monitoring that food supplies are always adequate and roads are maintained. Water supplies, power and telecommunications industries need massive amounts of investment and privatisation should be considered with foreign companies encouraged to tender for contracts.
• subsidies / tariff barriers/quotas should be lowered and eventually eliminated - they are open to regular abuse.
• minimising powers of bureaucrats - red tape is the enemy of a modern economy. According to the World Bank it can take 25 days for a container of car parts to pass customs into the Democratic Republic of Congo.
• the accounts of public corporations should be publicly audited.
• institutions need to be strengthened, an independent judiciary needs to be established and the rule of law needs to be firmly rooted.
• the central bank should be wholly independent and its staff should be beyond reproach. People with ability and whose integrity can be trusted should fill the top roles. There should ONLY be one foreign exchange rate for any country's currency.
• open and transparent tendering of government contracts and when work is complete, a survey of the quality of the work done before final payment.
• a free press and media.
• encourage whistle-blowing and ensure protection of informers.
• periodic meetings in which government ministers can be questioned and held to account by civil society.

In this way not only will the people of that country soon start to see a difference - outside investors, too, will take note and start to look at investment opportunities. And with that investment will come badly needed jobs, better pay, new technologies whilst ancillary industries will be set up.

The Tax Justice Network (TJN) has researched some 82 tax havens or secrecy jurisdictions from around the world and calculates there are some 4,800 licensed banks in these centres controlling an estimated US$21-US$35 trillion (£17.5-£29.1 trillion) in assets as at 2019. And according to Oxfam US$18.5 trillion of this is held by individuals in tax havens including US$6.1 trillion in UK dependent states. However, economists think a more realistic level is more like 10% of world GDP calculated at US$7.5 trillion is stashed in tax havens.

One notorious offshore centre, in the middle of the Pacific Ocean, is the island of Nauru. There, if you have a spare $25,000 (£20,800), you can set up your own bank and enjoy life with little or no regulation. It is even estimated that almost 400 banks operate there from the same government mailbox. And it was in Nauru, in 1998, that according to the Russian Central Bank, $70bn (£58.3bn) vanished never to be seen again. (Today it is estimated that Russian assets worth 50% of GDP are held offshore.) Perhaps, here the words of Vince Cable, former UK secretary of state for business, could best describe these kind of places 'no one keeps their cash in tax havens for the quality of investment advice; these are sunny places for shady people.'

According to the 2019 TJN Corporate Tax Haven Index (CTHI) which measures how successful a jurisdiction is in pursuing corporate tax haven strategies the UK and the following UK dependencies figure in the top 20: British Virgin Islands, Bermuda, Cayman Islands, Jersey, Guernsey and Isle of Man.

Using this basis TJN suggests that the traditional stereotype of tax havens is misplaced and that the world's most important providers of financial secrecy are not small, palm-fringed islands as many suppose, but some of the biggest and wealthiest countries.

Tax havens, again according to TJN, offer three types of 'service':-

a) bank secrecy such as offered by Switzerland, Luxembourg and Austria where bankers promise to take their client's secrets to the grave.
b) jurisdictions permitting the creation of trusts, corporations, foundations etc. (or shell companies) where the ownership and purpose are kept secret. Here the real owner will be hidden behind nominees i.e. professional agents like lawyers, accountants or even the office cleaner who act as a front for the real owners.
c) tax havens which put up barriers to co-operation and information exchange.

These last two often involve complex and devious subterfuges that are difficult to break down.

For wealthy private individuals, usually with something to hide, tax havens come in useful as they can salt away money from prying eyes. And, here in a list of court cases in UK overseas territories, the main jurisdications of the origins of the suspected offences were found to be Russia, Ukraine, Kazakhstan, Nigeria and and Azerbaijan. Then a good example of the damage illicit activity can cause to the economy of a country can be starkly illustrated by the current situation in Greece. The collapse of the public finances there is largely down to the consequences of allowing tax evasion by wealthy people to become endemic. And Greece is not alone; other Mediterranean countries also suffer from this to a large degree.

At the same time tax havens don't normally tax interest on the bank accounts of non-residents* leaving the accountholders with the decision of whether or not to declare the gross amount of interest earned to their own tax authorities. And as many tax havens refuse to respond to requests for information from foreign tax authorities, this again encourages individuals from overseas to park large amounts of assets 'offshore'.

1) non-doms. There are estimated to be 121,300 people born outside the UK or whose father was born outside the UK who do not regard the UK as their permanent home but live here for part of the year. Non-doms who have lived in the UK for less than 7 of the last 9 years pay no UK tax on overseas income or gains that are not brought into the UK. They do, however, pay tax on all income and gains relating to the UK. Non-doms who have lived in the UK for more than 7 years can still avoid tax on foreign earnings by paying £30,000 a year to the government. This charge rises to £50,000 per annum for those who have lived in the UK for 12 of the previous 14 years. And for those who have lived in the UK for 17 of the past 20 years the annual charge is now £90,000. Collectively they contribute £10bn per annum in to the exchequer despite their special status. Now, however, non-doms are starting to abandon Britain as the Brexit vote has prompted an exodus. Up to 12,000 have already left in the past year and and 55,000 are considering their position according to a large accountancy firm. Incredibly the non-domicile tax rule was introduced by Prime Minister William Pitt the Younger in 1799!

2) non-residents. People who have moved overseas on a full-time contract and who spend an average of less than 91 days over a 4 year period, and not more than 182 days in any year, in the UK . Also those who leave the country and make a clean break and limit visits to fewer than 91 days a year.)

Another ruse used by MNCs is to use loans from subsidiaries to reduce profits or even establish losses. According to ActionAid, SAB Miller, the world's second-largest brewer, despite annual sales in Ghana of over US$100 million between 2007-12, its brewery in Accra managed to record losses in every single year. This was helped by borrowing from its subsidiary in Mauritius at a rate of 18% p.a.

As a result of this offshore accounting it is estimated that 60% of global trade now consists of internal transactions within multinational companies and a vast accounting and legal industry has grown up in the last 10 years based on intellectual property rights and the calculation of transfer prices and justifying them to tax authorities. In total it is estimated that this complex corporate offshore accounting MNCs avoid paying anything between US$100bn-US$240bn according to the OECD, the equivalent of between 4% and 10% of aggregate corporate tax revenues. (In 2013-14 the UK division of Facebook paid just £4,200 in corporation tax to HMRC; in 2018/19 this had risen to £28,000,000.)

With encouragement from the UK government the G20 has now vowed to make multinational tax avoidance top of the agenda at their gatherings. And already 90 nations have signed up to combating 'profit shifting', highlighting the growing support across the world for more action to tackle this festering and insidious sore.

(Oxfam, the UK based international development NGO, is to make MNCs and tax justice the focus of its campaigning over the next ten years.)

Many tax havens (or 'secrecy jurisdictions' as TJN likes to call them) have a 'light' regulatory touch making it easy to set up a company or trust and this results in offshore centres often attracting unsavoury elements.

One of the most reprehensible kinds 'investments' that can be opened are blind discretionary trusts which are commonly known as 'black holes.' In these accounts the named beneficiary, often a well-known international charity whose permission has not been obtained, can be removed before any funds are distributed. As the initial principal beneficiary is a charity this reduces the requirements for identity and money-laundering checks. But now these charities are getting wise to this and are seeking to take these trusts to court. And if it is proved that they are shams in order to conceal the identity of the real beneficiary the charity will lay out a claim for the funds to be their own.



It was in 1989 that the Organisation for Economic Co-operation and Development (OECD) first started to consider taking action to counter money laundering by international criminals. To this end they set up the Financial Action Task Force (FATF) based in Paris. It was charged with drawing up a set of universal standards covering law enforcement, financial regulation and international co-operation. This list eventually ran to 40 recommendations which has now been adopted by all 37 member states plus 13 other countries. What this now means is that:-

• no longer will anonymously numbered bank accounts be tolerated
• all OECD countries will have a common interpretation of 'dirty' money and
• from July, 2014 a new single standard on automatic exchange of information on tax matters came into force which obliges countries and jurisdictions to obtain all financial information from their financial institutions and exchange that information automatically with other countries.

These guidelines, now, also require banks to become policemen and so they are in the forefront of tackling this kind of crime. To this end they must carry out Customer Due Diligence (CDD) which requires them to 'know your customer' which includes finding out the purpose of any account and then monitoring the expected profile of it. And any suspicious transactions must be reported immediately to the Financial Intelligence Unit (FIU).

There is also another group of countries that may be currently showing a high-level of political commitment to addressing the deficiencies but are not yet there in terms of passing legislation. These nations are Afghanistan, Albania, Angola, Cambodia, Guyana, Iraq, Kuwait, Laos, Namibia, Nicaragua, Pakistan, Panama, Papua New Guinea, Sudan, Syria, Uganda, Yemen and Zimbabwe.

Jurisdictions no longer subject to monitoring are Argentina, Cuba, Ethiopia, Tajikistan and Turkey

The measures set up by the OECD might now start to bear fruit in getting to grips with money laundering and helping to counter terrorism. However, despite this tightening up of financial regulation, it is estimated that $5.8 trillion is still laundered annually, equivalent to 6.7% of global Gross National Income.

But it seems it is not just offshore tax havens that continue to have problems addressing this issue for some OECD countries are still not managing to enforce laws already passed. For example, in the US, it is estimated that nearly 2m companies are still being set up annually without the need of the identity of the people behind them. Jason Sharman, an academic from Griffith University on Australia's Gold Coast, has recently done some research in this area. Armed with a personal computer and, a modest budget, he tested the difficulty of setting up anonymous bank accounts around the world, with striking results. His findings showed that the centres with the highest standards were many small island offshore centres. At the other end of the scale were Somalia, and worst of all, the US, particularly the state of Delaware, where service providers were prepared to set up anonymous bank accounts without proper identification. UK providers mostly required the right paperwork but, in one case, an anonymous company was set up in less than a day at a total cost of just over £500.

Bringing standards up all over the world and keeping them there is paramount in tackling financial crime. But it beggars belief that some of the major players in the developed world are unable to address the problem effectively themselves. That simply is not good enough.At the same time, though, the OECD could and should have gone further. Operating a level playing field is all very well and it should deter ‘money laundering’ in the future, but what about those who have already slipped through the net.

All banks now have access to lists of Politically Exposed Persons (PEP) which contain the names of all government ministers in all countries of the world. Surely it would not be difficult to go backwards and produce a 'Who was Who' in past governments. And armed with this FATF investigators could search anywhere for personal accounts and 'dig' down through front companies and client fund accounts to look for money that may have been stolen in the past. In this way, for example, money embezzled by ministers in the governments of Marcos of the Philippines and Mobutu of Zaire could possibly be traced and, then, if proved to have been stolen, sent back to the country of origin. In this way perpetrators of financial crimes in the past as well as the present will never be able to rest, thinking they have beaten the system. And at the same time, offshore centres will gain some respect, and some of the poorest countries in the world should see stolen money repatriated and become available for tackling social deprivation there.

In February, 2011 the Swiss authorities went some way towards doing this when they enacted a new restitution law which makes it easier for banks to freeze fortunes and return money acquired dubiously by foreign dictators to their home country. The first victim of this new law is the former leader of Haiti, Jean-Claude 'Baby Doc' Duvalier who is currently facing charges of corruption and crimes against humanity in the country he ruled through terror for 15 years. For a hundred years Switzerland has been the first point of call for dictators when it came to salting away their pension pots but this new legislation allows the authorities to freeze their assets even if the home country has not placed a formal request. Now, there is a chance that unless dictators can prove that they acquired their assets legally, the money will be returned back to the country of origin.

As a result of this further commitment to tackling tax evasion the Swiss authorities have signed a deal with the UK government which has ground-breaking ramifications for residents of the UK who hold foreign bank accounts there. It could raise up to £7bn for the UK Treasury. The deal comes in two parts. Firstly there is a one-off windfall tax for past liabilities levied at between 19% and 34% on the funds held by UK residents in Swiss banks. These amounts were deducted in May 2013 on accounts opened before 2010 and this was reckoned to settle all income tax, capital gains tax and inheritance tax owed. Secondly these Swiss accounts held by UK residents will be subject to a withholding tax on all future interest, investment income and capital gains levied at 48%, 40% and 27% respectively. The money collected from this withholding tax will be sent direct to the UK Treasury thus allowing British account holders in Switzerland to keep their identities secret. UK residents who already have co-operated with the UK tax authorities will not be charged these new levies. However, the Swiss government will also provide information to the UK government if HM Revenue and Customs can show that accounts are being used to evade tax. This agreement is already in place with the authorities in Liechtenstein where the resulting proceeds have exceeded expectation.

The leaked 'Panama Papers' made public by the International Consortium of Investigative Journalists on April 3, 2016 connected thousands of prominent figures to secretive offshore companies in 21 tax havens around the world, and revealed the opaque workings of the offshore finance industry. The documents focused on the Panamanian law firm, Mossack Fonseca, with its 210,000 companies/clients, and has led to allegations that the firm aided public officials and multinational corporations to avoid taxes, dodge sanctions and launder money. Politicians implicated in these latest revelations included President Mauricio Macri, newly-elected leader of Argentina; King Salman of Saudi Arabia; former Ukrainian President Petro Poroshenko and Icelandic premier David Gunnlaugsson, who has been forced to resign. People named from the world of sport include Gianni Infantino, the newly-elected president of FIFA; Lionel Messi, the world's No 1 footballer and Nico Rosberg, the German Formula 1 driver.

Companies that appear in the Panama Papers are incorporated in the following places:-

- British Virgin Islands 115,000
- Panama 48,000
- Bahamas 15,000
- Seychelles 14,000
- Niue 9,000
- Samoa 6,000

The UK was the second most popular place for Mossack Fonseca to operate through. According to ICIJ, Mossack Fonseca worked with more than 1,900 UK professional enablers to set up companies and trusts for customers.

Following on from the disclosures in the Panama Papers the 5 largest countries in the EU - Germany, France, UK, Italy and Spain - have agreed to share information on secret owners of trusts and businesses.

And more recently, in October 2017, the Paradise Papers came to light. Like the Panama Papers they were obtained by the German newspaper Suddeutsche Zeitung. As a result light has now been shone on the legal firms, financial institutions and accountants working in the sector and on jurisdictions that attract funds due to low tax rates. But the real dynamite has come from the exposure of the financial affairs of politicians, multinationals, celebrities and high net-worth individuals. The British monarch had invested £10m offshore, Apple uses the low tax regime of Jersey, U2 pop star Bono could be implicated for tax evasion on a Lithuanian shopping mall. In total there is more than 1,400GB of data containing about 13.4 million documents so the trawl through them goes on.

In October 2021 saw the Pandora Papers 'leaked' by the International Consortium of Investigative Journalists. This file contains 12 million documents that reveal hidden wealth, tax avoidance and money laundering on an immense scale which shows that the world's rich and powerful play by different rules. Leaders of countries from Russia, Jordan, Azerbaijan, Czech Republic, Cyprus, Republic of Congo, Gabon. In the case of King Abdullah of Jordan, whilst he invests ten of millions of US dollars in property in the US, the UK government gave US62m in aid to this poor country in 2021.

The European Union publishes an annual blacklist of tax havens. This list for 2021 comprises American Samoa, Anguilla, Dominica, Fiji, Guam, Palau, Panama, Samoa, Seychelles, Trinidad/Tobago, US Virgin Islands, Vanuatu.

Research by Transparency International shows that 36,000 properties in London are owned by companies registered in offshore jurisdictions. And according to the Financial Times at least £122bn worth of property in England and Wales is held via companies registered in secrecy jurisdictions. In a bid to uncover the people behind anonymous companies that own property in the UK, the government has just introduced plans for a register which will aim to identify the owners of overseas businesses holding property assets in the UK. This register, the first in the world, will identify the oligarchs, foreign politicians and government officials who use opaque companies to buy expensive houses in the UK. According to the UK National Crime Agency this will increase transparency in the housing market, especially in London, and help to trace criminal assets and tackle money laundering. A recent report found that in 14 new luxury developments in London, 80% of the homes had been bought by overseas investors with 40% estimated to have been acquired through suspicious or hidden wealth. Companies who currently own, buy, sell or transfer property or land in the UK have until 31 January 2023 to comply with the law on ownership. Failure to do so there will incur a fine of £2,500 per day or a prison sentence for up to 5 years.

At an Anti-Corruption Summit held in London on 12 May 2016, hosted by UK Prime Minister David Cameron, all governments at the summit appeared to agree to establish private registers of the real owners of shell companies with a small handful of countries committing to public registers. Initially, however, British Overseas Territories refused to make these public and the UK government failed to follow through to enforce them to open their registers for public examination. But then on 1 May 2018, a cross-party amendment forced the UK government to legislate to bring in public registers in Overseas Territories which would reveal the names of individuals behind companies set-up in these jurisdictions. This means that the UK had to, no later than 31 December 2020, prepare a draft order in council requiring the government of any British Overseas Territories that has not introduced such a register to do so. However, to the consternation of anti-corruption campaigners, this register has now been postponed until 2023.

Following on from a conference on 27 April, 2017 the UK government passed into law in February 2018 Unexplained Wealth Orders (UWOs), a provision of the Criminal Finances Bill, in what is deemed by Transparency International (TI) as a significant step in the global fight against corruption. This Unexplained Wealth Orders Bill will empower UK law enforcement agencies - National Crime Agency, Serious Fraud Office, HM Revenue and Customs, Financial Conduct Authority and the Crown Prosecution Service - to target corrupt money flowing into the UK and more easily return it to those from whom it has been stolen. It will work like this:-

However, these new powers enabling officials to freeze assets and confront super-rich suspects in the UK to explain their wealth have been only used a few times since the bill became law. This is a far cry from the what the campaigners envisaged where they expected the pertinent authorities to require foreigners to justify the source of their wealth which funds opulent lifestyles especially in London. (TI estimates that since 2006 more than £100bn has been channeled into the UK without full disclosure of its origins.)

Golden visas now offer wealthy investors the opportunity to take up residency in another country. As far as the UK is concerned any investor seeking residency in the country can apply for a Tier 1 investment visa. This requires an investment of £2,000,000 and the opening of a UK bank account and this permits temporary residency in the UK for the client and his immediate family who can then apply for permanent residency after 5 years. By investing £5,000,000 the waiting time can be reduced to 3 years whilst those investing £10,000,000 can be awarded permanent residency after 2 years. Since 2008 11,000 visas have been issued with 37% given to rich people from China with 23% going to rich Russians. TI claims that at least £3.15bn has flowed into the UK from Golden Visas and it is highly likely that substantial amounts of corrupt wealth stolen from China and Russia have been laundered in the process. Ahead of the Russian invasion of Ukraine in February 2022 the UK government scrapped Golden Visas.

The UK government has also denied Roman Abramovich a renewal of his visa which has prompted him to seek Israeli citizenship. As a result Abramovich has pulled the plug on his proposed £1bn redevelopment of Chelsea Football Club's stadium. It is estimated that around 700 Russian oligarchs already have golden visas and if they deem their future as uncertain in Britain there is a worry that the top end of the London property market could fall precipitously.

According to The Times 30% of British billionaires have now moved to tax havens. A concern here was the Labour Party's threat of a 50% tax rate for high earners. But also those who become UK non-resident for tax purposes can maintain ownership of companies registered in the UK whilst avoiding 38% UK income tax on dividends and 20% capital gains tax on the sale of shares.

Now that more than 100 countries have agreed to exchange financial data automatically, in July 2019, HMRC advised the House of Commons Treasury Select Committee that it had learnt that 5.67 million Britons had offshore bank accounts. It has now written to tens of thousands of them who may owe tax. At the same time HMRC reported that it had 105,000 open cases of tax avoidance, twice the number in 2012.

And in a move to get to grips with global tax avoidance by companies operating in the digital economy the OECD is proposing a fundamental reform of taxation rights to ensure that tech giants pay tax where they make their sales and profits. The OECD has always been keen to stop abuses of taxation rules but had not dared to confront big business up to now. The work is supported by over 130 nations with the aim of reaching a deal by the end of 2020. The issue has been driven up the agenda by a series of digitial taxes imposed by different countries to try to recover lost income. For example the UK is launching a digitil services tax next April at a rate of 2% on domestic sales of digital companies with global revenues of £500 million and UK revenues of £25 million.

According to TI the Cayman Islands has now publicly committed to introducing corporate transparency through a public rergister of companies incorporated there by 2023. This represents a major victory in the fight against global corruption and will pave the way for the unmasking of the true owners of companies registered in this jursidiction.

And again according to TI to date, action against serious and large scale money laundering through companies operating in the UK, such as banks, has only taken the form of civil regulatory action, which can be merely shrugged off as part of the cost of doing business. Providing the spectre of criminal prosecution against firms engaged in this activity, with a realistic prospect of success, would be a step-change towards ending Britain's complicity in global corruption and associated financial crime, such as money laundering. This is sadly still awaited.

In July 2021 the UK National Crime Agency estimated that £100bn of illicit finance flows through the Square Mile every year, the bulk of it linked to Russian nationals. Despite government promises to clamp down London in early 2022 is still the No 1 destination of choice for Russian oligarchs to launder their often ill-gotten gains and so Britain continues to aid and abet Putin and his cronies. Huge amounts of money are still flowing through opaque webs of offshore companies and trusts which protects kleptocrats and continues to gnaw away at the rotting UK banking system. The London laundromat is still used to clean dirty money with impunity. Then sometimes, just to add a semblance of respectability  to the process, donations from these mega-rich oligarchs are given for education and culture and perhaps even to the Conservative Party. It is estimated that foreigners are now flocking to Britain to take advantage of this seemingly open door for money laundering prosecutions have dropped by a third in the last 5 years. This has prompted a Russian exile Roman Borisovich to run kleptocracy tours through central London in 'red roads' highlighting the palaces and penthouses owned by rich Russians with seemingly extraordinary political connections. Rishi Sunak needs to take a tour!