Money flows that might prevent new World Wars

Syria-Russia-Iran-IraqVeteran U.S. diplomat and Middle East expert Dennis Ross made some interesting points about President Obama’s trip to Saudi Arabia in an L.A. Times editorial: “Next Test for Obama: Soothing the Saudis.” He referred to the Saudis biggest concern, the rise of militant Shiite Islam and an axis of Iran-Iraq-Syria that now includes an aggressively revanchist Russia. A problem that some have referred to as “World War Four.”

Alas, Mr Ross ignores the elephant in the room. That the Saudis are not the victims in any of this. Their relentless push to establish fiercely conservative Wahhabi madrassas all over the Sunni Muslim world helped to create Al Qaeda and most of the 9/11 attackers. Their own textbooks declare the west to be an evil place, to be tolerated only while necessary. Above all, they have striven, since 1948, to stymie peace between Israel and its Arab neighbors. By pushing to keep Palestine as an open wound, they ensured only that the Levant region would remain embroiled and steeped in pain, never achieving what the Saudis’ Hashemite rivals once dreamed-of — an alliance between Arabs and Jews that could strengthen all concerned.

One wonders, as the generations pass along, if the admittedly brilliant grandsons of Abdulaziz ibn Saud might be flexible enough to envision how that long-deferred option is worth trying, at long last. That Israel and the Levant and Egypt and Arabia have potential far beyond mere oil, especially if all parties were to help foster synergies, instead of trumped-up enmities.

Saudi-aid-PalestinianThe Saudis, especially, have the wherewithal to offer aid and investment – a deal that would be impossible for the Palestinian side to refuse. And such an offer would corner Israel with an economic carrot that transcends any and all sticks.

Above all, such a jiu jitsu move by the Saudis would render the Russo-Shiite axis futile… almost cute in its impotence, next to the scientific/technological/economic superpower that would blossom in the Sunni-Israeli zone. All of these benefits await, but are only perceived by those of flexible mind.

Alas, Mr. Ross shows us no hint of any of that.

== A “Helvetian” scenario? ==

SMUGGLE-DEVELOP-COUNTRIESIt’s hard to build your country when the money keeps slipping away. Foreign capital flight has been a problem for developing countries this year, but a bigger problem might be the funds smuggled out by tax evaders, corrupt officials and criminals — $946.7 billion in 2011. Nearly a trillion dollars, according to the latest estimates released today by a team of economists at the non-profit Global Financial Integrity, an increase of more than 10% over the previous year. For comparison, total foreign aid to developing nations in 2011 was just $141 billion.

“The nations most hamstrung by illicit flows are in Africa, where illicit flows are the equivalent of 5.7% of GDP; the average developing country lost 3.7% of GDP in 2011. That’s a huge amount of money to lose that could otherwise be invested in private or public enterprise that might improve the lives of people living there. Instead, it winds up in tax havens—including the United States and the United Kingdom. “This isn’t really just a developing world problem it’s facilitated by developed country banks and tax havens,” Brian Leblanc, one of the economists behind the study, told Quartz.”

“Indeed, with six times more money leaving developing countries illicitly than entering them as aid, advocates for these nations might do well to back policies to block these flows. Promoting tax-haven crackdowns and convincing powerful multinationals to submit their transactions to more scrutiny is hard to do, but it could pay dividends for development down the line.”

MIDDLE-CLASS-RISEIn EARTH I portray a dozen developing nations having suddenly realized that several trillion dollars — ripped off from poor countries by former kleptocratic lords — sits in Swiss and other bank haven accounts.  When all else failed, they declared war on Switzerland — in the 2020s — in order to use the rights of belligerent powers to seize assets all over the world and to coerce return of enough money to save millions of children.

Things needn’t come to that! In fact, a deal might be worked out in which developing nations agree to keep the restored funds deposited in Swiss banks! Only with interest and collateral value now going to the nation’s children, not former klepto-presidents. Such a deal would, in a shot, restore hope and trust… and guarantee the bankers against the kind of comeuppance they think (right now) can never come.

History disagrees. It can come. Cut the deal.

Treasure-Islands-Shaxson-bookPOSTSCRIPT: In this recent report, analyst Gabriel Zuchman shows evidence that around 8% of the global financial wealth of households is held in tax havens, three-quarters of which goes unrecorded. Meaning that this is about much, much more than just the developing world. “On the basis of plausible assumptions, accounting for unrecorded assets turns the eurozone, officially the world’s second largest net debtor, into a net creditor. It also reduces the U.S. net debt significantly.”

It’s flagrant! “… (worldwide) more investment income is paid than received each year…” and “…many European securities, in particular, have no identifiable owner…”

Clearly this relates to my longstanding proposal — for worldwide transparency of ownership. It is completely non-socialistic and would probably result in taxes upon honest families going down. All it would do is ensure that those yelling the loudest in defense of open capitalism actually live by it.

== Grabbing, hand over fist ==

Related news that just hints at the scale of the oligarchic putsch…

Rupert Murdoch’s media group received a $882 million tax rebate from Australia last year in a revelation that is likely to reignite the debate over how much tax is paid by international corporations. Again, this generation is the savviest and most knowledgeable in history.  Do you guys honestly think that — when it becomes radicalized — there won’t be repercussions?

2 Comments

Filed under history

2 responses to “Money flows that might prevent new World Wars

  1. Pingback: Time for an Israeli-Saudi alliance - San Diego Jewish World

  2. thanks David, We picked up your column on San Diego Jewish World, http://www.sdjewishworld.com/2014/04/13/time-israeli-saudi-alliance/ All the best, Don Harrison

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