Offshore

pipnasty · December 16, 2011

Been reading the quite brilliant 'Treasure Islands' by Nick Shaxson which looks at the world of offshore banking. A few things really stand out;

Total illicit financial outflows from Africa since 1970 is estimated to be $1.8 trillion according to a Global Financial Integrity study from 2010. Africa is currently estimated to be $227 billion in debt. Therefore Africa is in fact a massive net creditor to the rest of the world. Outside of Africa, developing countries are estimated to be losing over $1 trillion per year. Nigeria is estimated to have 'lost' over $500 billion of oil money alone, most of which ended up in the City of London and its subsiduaries. The Labour government investigated and returned £3 million of this missing money to Nigeria.

According to Shaxson, this is how it works. Bankers lend more more to a country than it can absorb, then bankers show the local elites how to plunder that wealth, conceal it, launder it and then put it offshore. The IMF then helps bankers put these countries under pressure to pay back the original loans, this debt is then placed firmly on the shoulders of the local population through austerity measures. When they can no longer pay, other loans are then given by the same bankers to the same local elites to pay off the original loans and around we go again. In developing countries, it is estimated that on average, 70 to 90% of a countries monetary wealth is held offshore by a very small elite, never to return to the country of its origin. 25% of the entire worlds monetary wealth is held offshore and this is currently rising as a rate of 18% each year.

Sound plausible? If so, like, wow.

Nebraska Red · December 16, 2011

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