International Development Lecture

Capital Flight, Tax Evasion and Conditionality

Two weeks ago the Guardian printed an interesting article. It argued that Foreign aid is seldom charity and for the super powers and erstwhile empires, it represented and still represents a strategic investment.

While the United States is in the midst of reducing its foreign aid, China has been increasing its contributions. China has lent at least $110bn between 2009 and 2010 – more aid than all World Bank loans combined during that period. Furthermore, China is implementing that longer-term developmental strategy that President Obama, besieged by his own bicameral democratic institutions of Congress and the Senate and the need to win a second term,  steadfastly contends the US needs to retain its standing as the world’s  leading player.

This dilemma confronting the world’s leading trading nation since the Second World War and the contender for this title, illustrates my own take on what now seriously addresses the global choices confronting today’s International Development. Today’s world is fast changing and public awareness has never been greater thanks to its ‘instant news society’.  It is becoming far more difficult for autocratic regimes to isolate their citizens.

We now live in a world where for example a man in Tunisia burned himself to death in December 2010 in protest at his treatment by police and which in turn (like watching falling dominoes) has led to a disgruntled and disapproving civic society mount pro-democracy rebellions across the Middle East, delivering what we now refer to as the Arab Spring and just last week, where a fairly inconspicuous Greek politician can ask his people for civic approval by presenting a referendum before accepting G20 financial constraints causing stock markets to haemorrhage and making super nations tremble! It is almost as if civic society has looked straight into the eyes of powerful ‘elites’ everywhere and wished on them that curse, often attributed to China, which invites them to ‘live in interesting times!

My name is Ken Stewart, I am the Director of Operations for MNAS International Development Ltd. I am also Treasurer of UNA Scotland, Chair of International Development at UNA Edinburgh. MNAS was created through our frustration at watching UK development funding (garnered from the public purse) failing to reach its intended targets. Too much of the publics’ well intentioned funds, donated on a top down basis, simply fails to trickle down to its targets at the envisaged levels of publically approved and perceived assistance. An avaricious coterie of ‘third world or Governments of the South, NGOs and elitist opportunists’, consistently cream off their share of the spoils.

We at MNAS decided to assemble a Group of ID professionals to act as MNAS Consultants and create prototype Project Development models based on rolling them out as open and transparent Royal Institution of Chartered Surveyor’s conditions which would address specific areas of developmental requirement, make contact with front line practitioners in developing nations and fund them directly ‘bottom up’ with 100% of the intended level of support.

This has meant researching good examples of suitable Projects in the field of Agroforestry, education, health, social work, capacity building and aquaculture. It has meant harnessing local support and listening carefully to their needs and not our perceived ‘western’ assessments and by working with diasporic connections from each country so as to deliver sustainable solutions which relate to local enterprise initiatives, job creation, rather than simply dispensing aid which is seen as demeaning, is often fleeting and acts as a sticking plaster rather than a permanent cure and/or an ongoing solution to poverty and repression.

We have worked on these prototypes for 9 months and in the next year, hope to have private funding in place to deliver assistance which is productive, sustainable and which delivers exemplars for the UNDP to recommend to all well intentioned nations and NGOs who fervently wish to help those less fortunate than themselves. We have worked alongside our stable of renowned development experts, gathering evidence so as to pursue our development prototypes and in addition, we hope to publish a report on anomalies, exploitation and unethical practices in the disbursement of Development funding.

When asked by Dr Gari Donn to participate today, I did some homework on the challenges directed towards you in this academic year and I was struck in particular at how two of your Course assignment notes, tie in so aptly with my team’s research – they are;

A – Whether training is important for public policy

B – Whether education can influence growth or economic Development

And the answer I can affirm is a resounding YES to both

Today, I will explore the enigmatic development and economic nuances and strategies of global incidents and actions and I will touch upon the UK, France and China and especially in relation to Sub Saharan Africa. I will ask you to especially note China’s important and influential role in today’s world of International development, yet will also note how the UK, despite being continually written off as a global power, maintains its prominent seat in global trade.

Before marshalling my arguments and drawing out conclusions however, I think it important to briefly recap on how we understand contemporary development. Put simply, the contemporary context for development reflects a roll out of liberal capitalism. This follows strongly on the heels of the demise of communism and is the dominant mode of international social organisation and of globalisation. It was recognised by Fukuyama as societies’ only viable model. In recent decades, advanced countries have adopted these liberal democratic political institutions and market oriented economics, technology has driven this capitalist phenomenon and has in the main created prosperity. The Indian, Brazilian and several Asian economies reflect this trend and even China appears to enjoy much positive transition resulting from the practice of free market policies.

We have accordingly witnessed more and more liberal regimes adopting universal and human rights and extolling dignity. These elements typically act as checks and balances to capitalism. We must be ever watchful however in ensuring that we do not interpret this solely from a western standpoint. This immanent, intrinsic and dynamic progress in political, economic, social and cultural transitions requires constant reframing and is at the core of development today.

As it transpires, the publics’ perception of development is rather more simplistic in that it is based on what they see as the predominant trend of ever burgeoning ‘Development Agencies’ who disburse emergency humanitarian sustenance to people in serious life threatening difficulties or to those suffering chronic hunger or famine. This is manifested through disaster (floods, fires, disease, famine, war etc) responses, or through interventionist ‘poverty’ initiatives, food programmes, gender initiatives and health and educational programmes. Such public interpretation pigeon holes interventionist development as relating solely to the poorest developing nations (low income fragile states) who receive such aid and ignores the major development transformations in areas such as previously touched upon in India and China where development has built on itself, generally without such aid and continues this transition, both for the better and the worse of society. Schumpeter aptly describes the ebb and flow of this phenomenon as ‘creative destruction’.

The public are however, generally and genuinely sensitive to the predicaments of others and are supportive of such aid programmes. What the public are unaware of however is that ‘aid’, which is disbursed from Developed Nations taxation revenues, is often mismanaged and lacks accountability and fails to reflect honest transparency. After our exchange today, I leave it to you to make up your own minds whether this is either through malpractice or incompetence or sometimes through turning a blind eye to downright collusion and Governmental or Establishment acceptance of unethical financial behaviour.

All development aid is of course interventionist and is recognised as ameliorating (mitigating against or changing for the better) the disordered faults of progress or the reconstruction of social order (the immanent process of capital growth). These examples of development in practice represent initiatives which are deliberately aimed at improvement. However they are predominantly palliative and normally represent what western society determine (in their opinion) that which developing nations need and effect all developing societies from individuals to global coverage.

So how sits the world today? We have as I see it, six diverse views of Development roll out;

Neoliberalism;

Modern industrial society operating in a democratic free market – To neoliberals, immanent or development through natural progression is sufficient. It reflects internal dynamism and entrepreneurship – it rejects the need for social safety nets (Nozick).

Interventionism;

Which is required to operate alongside capitalism – main contemporary debate is about form & degree. It relates to Market efficiency – governing markets– delivering basic social goals – removes barriers to modernisation and change. It is typified by – States, NGOs, development Agencies and it champions major targets –Millennium Development Goals – health, education, gender, poverty, nuclear disarmament and interventionism often tempts nations to act as the world’s policeman. However there is an element of reciprocity here in that it invokes Schumpeter’s yin and yang effect. Consequently, to offset unfettered liberal capitalism society has also created organisations such as Trade Unions – national health services, Structural Adjustment Programmes/World Bank/IMF and US AID etc. Polanyi also attempted to describe these checks and balances as promoting or restraining state or global influence – i.e. the struggle between immanent (historic progress – capitalism) and Interventionist movements – they operate within the context of states and their issues impact, promote or restrain industrial capitalism.

People Centred Development;

In more recent times – ‘people led organisations’ have emerged as they seek to influence policies over land, labour, knowledge and life itself. This is now championed as another alternative societal approach. It advocates ‘people’ being empowered to achieve their potential – greater individual and group empowerment – contemporary successful lobbying of civic society – It is however, often strong on vision/weak on suggested alternatives – individuals solving their own problems. It has strong endorsement however, David Korten envisioned such authentic development as reflecting justice, sustainability and inclusiveness, restoring or enhancing basic human capabilities and freedoms and reflects the empowerment of people to re-distribute power and transform institutions

Structuralism;

This represents modern industrial society (excluding capitalism) and was typified by the now discredited Soviet example – Socialism/Communism – class struggle – state planning – collective action – social solidarity. This is often described as Planning versus Profit or State versus Markets

Post Development Schools;

Reject the notion of development – simply seen as a hoax to strengthen US hegemony through development agencies

We now come to the last evolutionary example and perhaps the most interesting and intriguing – the Hybrid economy;

This was well exemplified by Mao’s deliberate intervention to change China from an agricultural to an industrial society and especially through the remarkable change achieved since 1978 and Deng Xiaoping’s policy to create surpluses and foster the conditions to encourage the immanent development of a free market economy. While at the same time, the Chinese Communist Party (CCP) maintains China’s version of socialism. Many traditionalist CCP officials and their supporters (many perhaps still yearning for the old days of the iron rice bowl) recognise that China has indeed embraced capitalism but contend that this is purely a transitory phase which is necessary to endure before returning once again to pure socialism. This means that capitalism in China is progressing successfully alongside the CCPs version of socialism which still successfully runs the country. As a result, China’s pragmatic dualist policy which embraces a hybrid mixture of capitalist and socialist economic growth, continues to thrive and this ‘work in progress’ continues to dominate recent global trade. The American economist Jan S Prybyla’s contends that China is failing to choose between pretend socialism or pretend capitalism, legality or illegality and moral codes or market efficiency. He further asserts that by following this dualist approach, one or the other must prevail, sooner rather than later. This I suggest remains to be seen. I would argue that his contention at this stage seems premature in describing what I see as a vibrant, ideologically flexible and constantly reframing contemporary China. This appears to be delivering a launch pad for dynamic immanent transformation in political attitudes, economic improvements, social enhancement and well being and remarkable cultural adjustment.

China represents a fascinating example of immanent development and yet perhaps still needs sensitive interventionist help in modernising its society? China excites us as it wrestles with major problems or conundrums facing an enormous nation containing 1/5 of the world population? China is a country with an urban populous recently awakening to new contemporary possibilities. A country where its young people, enjoying better access to education and informatics,  have a growing awareness self potential and the possibilities of achieving social aspirations or perhaps learning how to deal with newly acquired levels of earnings which deliver new and better standards of living. How does China harness its massive hinterland, steeped in years of subsistence farming and state planned utilitarian existences?

How does China encourage the gradually emerging ‘better off’ from being savers into consumers?

How does China introduce their citizens to social interests (which we find common place and accept unthinkingly) How does China provide its citizens with the basic information and techniques which will enable them to become consumers, interested in purchasing modern consumables which are linked to these interests? Simple support infrastructure which we in the west take as norms (Television, IT, Cinema) and how to teach them how to operate and benefit from such appliances and technology? Perhaps we in the west should stop for a moment to appreciate the enormity of the challenges in developing the world’s most populous country of over 1300 million people and pause to better understand Deng’s description of envisaging China as ‘Feeling for stones while crossing the river’ – a description which has perhaps never been moreprescient and profound.

How does China constructively engage with and convince India to allow the damming of the upper Himalayan rivers (which flow from the Chinese Tibetan Plateau and then through India before re-entering China), by considering the possibilities of constructing the Shoutian Canal and in so doing, help regularise water confluences, eliminate flooding and better manage water resources?

How to better use the new overland flow of Oil and Gas into China and to minimise China’s reliance and dependency on the Arab States and their potential navigational and strategically important bottleneck in the Straits of Hormuz

And above all China’s dualist dilemma, how to keep a lid on new found wealth, ambition and peoples’ aspirations achieved through their open market policies, and yet maintain the ideological essence of the unique Chinese socialist order

However China is not alone in having to constantly address economic, cultural, social and political developments. Notwithstanding which type of global development policy is engaged there remains the question of legitimacy and trusteeship.

Where lies the democratic right of imposed Globalisation through global brand proliferation?

Where lies the legitimacy of nations adopting the role of global policemen?

Where lies the legitimacy of global NGOs such as the World Bank and its subsidiaries, whose decisions confront, challenge and rock nations?

Should we fear what the economist Banuri fears – are we witnessing the self anointment and self appointment of these super nations and multinationals?

Are we giving them licenses for global intervention or are they simply just unilaterally grabbing power?

Are their actions exacerbating the growing inequality and social dislocation in today’s world?

For example, are we in the West impatient for change in human rights practises in a fast changing dualistic China when we in Scotland have taken centuries to evolve our own version of liberalist capitalism?

How can we in Scotland criticise others when we built our nation’s prosperity on slavery, sugar and tobacco exploitation?  Even many of our schools and our world renowned educational system were built from the sweat and profits of forced labour

Do double standards prevail and can they be justified?

Are the rich getting richer and the poor, poorer? Are there laws for one section of society and not for others?

Are the rich above the laws? We in the West are sometimes critical of political interferences apparently influencing interpretations and inconsistencies when dispensing Law in for instance China, yet we look askance at supposedly crystal clear American legislation being pragmatically interpreted or set aside in what is called ‘the nations interests’. This was well described by Jonathan Swift as being like a selective net which ‘catches small flies and insects but allows large wasps and hornets through’. 

 

How do we control the world’s powerful actors, who are well connected?

Are we simply standing back as onlookers and allowing the creation of a global time bomb?

Can civic society make a difference?

‘We here today’ are civic society and I wish you to keep these preceding questions in mind as we move on later to the second part of my presentation.

These preceding questions lie close to the heart of my remarks today and I hope to address some of them in the second part of my presentation this afternoon and in so doing, challenge and stimulate you into seeking your own evidence and conclusions to what confronts today’s development challenges and to emphasise how open minds and a better informed society can influence global actors and advance civic hopes and aspirations for tomorrow. Indeed, we should always take heed of the words of Sir James Wishart, the Scots physicist who recognised that ‘Minds are like parachutes, they only function when they are open!’ 

And so to the meat of my argument;

The UK through its Department for International Development (DfID) admirably donates 0.7% of its GDP or £7 Billion Pounds Sterling to developing nations.  Sounds good so far!

40% of this sum or £3 Billion Pounds Sterling of taxpayers’ money is however not managed by DfID but instead paid to and disbursed through, the World Bank and its subsidiaries. This disbursement is not transparent yet it suits Britain. Why? Herein lies the crunch!

The policy of disbursing funds unconditionally on a top down basis by large NGOs such as the World Bank or its subsidiary the International Finance Corporation (IFC) has encouraged and underwritten tin-pot autocrats and dictatorships for the past 50 years, throughout the developing world and in particular to Africa.

How has this happened?

To understand this we must seriously consider the complicit role that developed nations, especially Britain, has played in supporting the exploitation of developing nations by consistently turning a blind eye to international avarice, opportunism and often, downright unethical practices.  We now begin to address my earlier remarks and question as to why, despite the UK being superseded as a world power by the USA, and now China, Britain still remains a major international player in world trade.

The reason – Britain enjoys hosting one of the largest Financial Service Sectors in contemporary global trade. In the City of London and indeed here in Edinburgh, a myriad of Banks, financial trading houses, speculators and brokers provide a service industry and tax avoidance schemes to an ever growing stable of domestic and international investors, capital venturers and opportunists; all legal and above board – but all ethical? I wonder!

And the platform most used for this service; Tax havens!

Tax havens offer financial secrecy

Tax havens are set up by elites to serve their own best interests to the detriment of their own and our societies

Tax havens are about power – those who have it and those who do not

Tax havens are about Banks, and about financial service industries

Tax havens are about enabling bribes, illegal commissions, kick backs, sweeteners and nefarious acts to be secretly paid offshore, without paper trails recording such transactions within the taxable footprint of their nations of origin or legal ownership

Tax havens are about providing the politically empowered, the global wheeler dealers,   and often, organised crime to distribute their often misappropriated rewards, with total disregard to ethical standards, transparency or accountability

Tax havens exacerbate social dislocation and allow developing nations to be resource plundered and their nation and peoples heritage stolen

Tax havens are big business! The two biggest investors into China in 2007 not Japan or South Korea but the Tax havens of Hong Kong and the British Virgin Islands. In 2009, the biggest investor into India (delivering 43% of the entire total) was not the United States, nor Britain nor China but the rising star of the offshore system – the Tax Treaty Haven of Mauritius!

Tax havens might be unethical but they are legal and provide escape routes for delinquent and unscrupulous elites!

To be fair – not only Britain provides such services;

In France the Elf Affair typified such operations; In 1960 the French colony of Gabon became independent of Franco-colonial rule. In 1967 France identified and set up and offered protection to a puppet President for Gabon – the controversial Omar Bongo and with his collusion, until his death in 2009, provided French companies (especially Elf Oil) with exclusive rights to his nation’s mineral resources at terms advantageous to Elf, France and himself, but detrimental to his fellow countrymen. Furthermore, also through Elf, he allowed Gabon to become the lynchpin and conduit of all shady deals and corruptive practices. Mainstream French politicians, their secret service and Gabonese counterparts and collaborators used Tax Havens in Switzerland, Luxembourg, Liechtenstein and Jersey to keep French political and trading activities and transactions outside of French jurisdiction and Tax liabilities.

Gabon, Omar Bongo and French elitists milked Gabon and other mineral rich nations by providing this unethical yet legal secret financial service which enabled bribes without the consequential and evidential paper trails and subsequently extracted the vast mineral resources of commercially naive nations and their unsuspecting peoples. France appeared clean; the facilitator ‘Gabon’ appeared clean and indeed Gabon does not appear itself on any list of Tax Havens. Although what occurred was technically legal it was corrosive to democracy, and morally indefensible. Nicholas Shaxson aptly described the situation as follows ‘In the world’s eyes, Colonial France had gone out of the front door but had secretly entered again by a side window!’

By the early 1980s a modern offshore system was in place. Traditional European havens such as Switzerland were being outpaced by a plethora of flexible and aggressive British Tax havens dispersed throughout the once British Empire and feeding in to the City of London. The USA has since followed suit and indeed even China perhaps following Deng’s adage ‘To get rich is glorious’now has a similar facility through Hong Kong.

The promise was the offer of escaping financial regulation, with plenty of tax evasion, money laundering and criminal activities thrown in. In reality the system rarely added value but instead distributed wealth upwards and risk downwards.

The ever avaricious elites of developing nations saw this service as their way to sell off their nation’s assets and keep the resultant funds offshore in personal accounts. Examples are rife and all involve the use of tax Havens!

The elite from the Republic of Congo milked its mineral resources in this fashion

Elitist opportunists systematically looted the Soviet Union

Saddam Hussein and his family milked Iraq, The terrorist Abu Nidal, The Columbian Medellin Cartel and the Asian heroin warlord Khun Sa all used BCCI as their offshore bank.

Kim Jong II and his family is now looting North Korea

Not only nations; Globalisation now sees Multinationals larger that countries

Tax havens have provided platform for Hedge Funds and Private Equity deals

Controversial corporations such as Enron, Parmalat, Lehman Brothers, and AIG could never have expanded and become so powerful without Tax havens.

Even Silvio Berlasconi’s strange hold over Italian politics is significantly an offshore story.

What about Britain’s complicity in all this? It is justified by the vast, vast business being generated through the British Financial Services industry and its specialist offshore agencies, their services, their fiscal contribution and their vast number of employees working in the UK.

Double Standards? Well Robin Leigh-Pemberton, a Bank of England Governor neatly encapsulated the City of London’s ‘see no evil offshore ethic as having ‘served the community well’. Accountants Price Waterhouse was commissioned to investigate the BCCI (Bank of Credit and Commerce International – described by Times Magazine as ‘the dirtiest Bank of all time’) and its financial irregularities, but their report remains confidential today on the grounds that publishing it would disturb Britain’s international partners!

What we are talking about here is what is acknowledged as being technically legal but is in fact capital flight. To help understand this phenomenon, I return now to my earlier comments about the UKs Department for International Development or DfID. DfID disburses £3 billion Sterling of UK taxpayers’ money per annum to the World Bank. The World Bank in turn funds a subsidiary called International Finance Corporation or IFC which was set up to fund Joint Ventures between Developing Nations and Corporate partners. In the recent Multilateral Aid review commission by the British Government, IFC were given a clean bill of health. It was particularly acknowledged as having strong organisational strengths and that its results framework is recognised as a leading example among development finance institutions. DfID noted its transparency at HQ level as being generally good with some justification for lack of transparency due to commercial sensitivity; shades of Leigh-Pemberton here!

In reality, IFC in recent times has been castigated by the independent Tax Justice Network as having disbursed funds without conditionality. This has meant that in the following cases, having been funded by IFC, Elites from each of the following developing nation have joined with Corporate partners to develop mineral extraction or create industrial projects within their countries. Offshore companies have then been set up in Tax havens where all revenues are consolidated. The resource nation receives but nominal revenues, no tax is paid to the resource nation and the nations resources are depleted and accrue to the elitists and their joint venture partners ‘offshore’.

IFC has disbursed the following contributions towards projects run as Joint ventures between IFC, ‘elitists’ from developing Nations and International Corporate partners;

Nation            Funding          Corporate Partner(s)             Tax Haven

Ghana             $215 Million               Tullow Oil (USA)                    Cayman Islands

$160 Million               GEMC Insurance                    Luxembourg

Uganda           $100 Million               Bujagali Energy (Kenya)        Cayman Islands

Nigeria                        $125 Million               WAGP Co (Gas)                      Bermuda

Caspian           $250 Million               BTC (Oil Pipeline)                   Cayman Islands

Kenya              $41 Million                 Wartsila Power Plant                        Cayman Islands

Astonishingly, the Tax Justice Network informs us that roughly 80% of external borrowings, grants bestowed or Third World debt relief repayments waived on African nations without the checks and balances of ‘conditionality’ has since been purloined or misappropriated from their countries by ruling elites. Eminent critics describe the tax haven system as ‘the ugliest chapter in global economic affairs since slavery’.

What does this ‘capital flight’ involving the calculated expatriation of a nations resources and the failure by elites or ‘corporate extractors’ to pay tax in the country of a transaction’s origin’ mean to developing nations?

Such relationships and dealings build up, protect and consolidate autocratic regimes and encourage corruption and deceit. These delinquent regimes are not transparent, totally unaccountable and further exacerbate the growing dislocation between the rich and the poor. These typical regimes are also non-democratic.

Alternatively, if development funding was conditional on regimes being run openly and democratically, the following would occur;

Funders would hold elected Governments and officials of developing nations to account in their management and handling of development projects and related disbursed funds.

All accounting for development projects would be transparent and all resultant profits would be recognised, due and payable within the developing nation

The tax collected would underpin the democratic capacity building of the nation (providing schools, hospitals, housing etc) and such open democratic policies would become permanent, sustainable and be financed through taxation from the people, for the people. This in many cases would obviate the need for developing nations to plead for demeaning external development handouts.  Equally as importantly, paying Tax to strengthen capacity building within States makes rulers accountable to their citizens first and does not set them up as financial cronies and sycophants to big business, NGOs and international donors!

This would also for the first time, deliver to many developing nations, a permanent solution to the global recognition and guilt pertaining to moral and fundamental development deficit.

Conclusion

So what can we do about it? As I see it the answer lies in providing resources to create and enhance democratic participation by citizens in developing ‘Capacity Building’ within developing nations. It means citizens putting pressure on Governments and NGOs to ensure (where practical, caring and sensitive) that funds (or resources) are delivered ‘with conditions’. Conditions which insist that  capacity building and democratic assurances are recognised and delivered as an inviolable clauses within funding which is to be disbursed to developing nations. All development resources must be accountable, transparent and subject to democratic audit.

The emergent importance of civic society has never been more imperative. People Centred Development has been criticised for sounding admirable but lacking in the delivery of solutions. Such criticism is often valid.  Here is where you come in. It is up to those of us who are beginning to understand the problem, to return to our countries, challenge politicians and NGOs and above all educate our fellow citizens, especially the young. You, as our new generation of educators, you must make them aware, you must keep them informed.

Civic Society, if educated and informed, whether through the media, the internet, twitter, Facebook or by attending public gatherings – can make a difference. Ask the Tunisians, Ask the Egyptians – if the people take action – Governments tremble and elites run for the hills.

My recommendations

Work within the civil society to promote taxpayer education and compliance and to demand that Extractive Industries pay their taxes to the country where they undertake their projects.

Move towards a multilateral agreement for the automatic exchange of tax information between jurisdictions and particularly the developing countries.

include civil society in international processes to challenge tax leakages

Remove tax exemptions for multinational corporations and wealthy and elite individuals

In addition, tax evasion fosters inequality, with wealthy citizens escaping the tax burden and poorer citizens facing higher taxation and cuts in public ser-vices.

Outlaw falsified invoicing and transfer mispricing and shame the elitists and Corporations who steal from developing nations.

But above all, and I make no apology in repeating once again your responsibility as educators – In this knowledge based world, It is vitally important to educate the young (who are the next generation of taxpayers) on the significance and role of taxes.

Outreach activities including, TV and radio coverage, advertising and tax themed programmes must be engaged to help children and adults understand the civic responsibilities of paying taxes and the wonderful benefits that can be attained by each of us financially contributing to the progress and development of our respective nations.

My closing message – be politically active – promote education as a launch pad to spur on self determination and democracy. Help citizens learn! Help enable the people to be heard!

if you do not then as Plato noted ‘One of the penalties for refusing to participate in politics is that you end up being governed by your inferiors’

And now a commercial!

Can I suggest a date for your diaries? In February 2012 at the Royal Society of Edinburgh, Dr Alex Mackinnon of MNAS and one of the leading experts on China and the Pacific Rim will be chairing a panel discussing China and the effect of its taking up the American concept of a one child family policy on the people of China – ethically, pragmatically, socially and how it impacts upon thinking in the western world. Your own Dr Gari Donn will feature on the panel and between us we will ensure that you are given first chance to purchase attendance (at a nominal cost).  On this occasion we will also be joined by the vibrant Chinese community of Edinburgh and because of demand, tickets will be distributed on a first come, first served basis.

And finally a plea relating to the next vital stage and to the new and key player in  the future of International Development – I mean China;  I respectfully suggest to their powers that be and equally importantly to civic society in China, as you develop the mantle as the next super power, tempting though it must be to win hearts and mind in developing nations, please fund aid to these nations with the attached caveat of an insistence on conditionality rather than have China deliver unconditional development hand outs. If China also fails to insist on transparency and accountability in developing nations, China might only encourage ‘short term expediencies’ that will in turn deliver the next generation of unscrupulous despots who will bleed their countries dry.  As citizens become better informed, Super Powers will never be forgiven by the ordinary and exploited citizens of these countries. Look how British colonialism still carries a stigma, look how USA interventionism is detested internationally! In her own turn, China might also find that like these Super States from the past, ‘what goes around comes around’. History having shown us so far, that Super Power status is at the end of the day, inevitably transient.

However, I ask myself, is this plea for embracing equitable development policies, again taken from a Western perspective? The Chinese might see such investment in Brazil and Africa as the simple pragmatic build up of ‘Guanxi’ or relationship building and establishing connections. China might see this as an expedient commitment, far seeing and one which they have pragmatically learned from observing the West. Might the Chinese and their love for proverbs see their policy as simply being ‘to know the road ahead, ask those coming back’.

Whatever, International development is constantly reframing and certainly in the West, is wrestling with its conscience.

The future promises fascinating times ahead for all global observers and practitioners, whether educational or developmental.

For the betterment of disadvantaged everywhere, we must hope that open minds will consider and understand different philosophies and different global standpoints, summed up by our Chinese fraternity as ‘same bed different dreams’.

I thank you for your attention today.

***

References:

China Calling (2008), Mackinnon A & Powell B, Palgrave Macmillan, Hampshire & New York

Poverty and Development into the 21st Century (2004), Allen T & Thomas A, Oxford University Press, Oxford

The Bottom Billion (2007), Collier P, Oxford University Press, Oxford

Treasure Islands (2011) Shaxson N, Palgrave Macmillan, New York

Trace the Tax (2011) Christian Aid, London

Is the International Finance Corporation supporting tax-evading Companies? (2009) A report by the Tax Justice Network, www.taxjustice.net

Investments for Development: derailed to tax havens (2010) A report by Tax Research UK

IFC weakens World Bank’s transparency commitment (2011) A report by Bretton Woods project

Reframing Development Cooperation (2011) Devex Editor, Wolfenson Center for Development at Brookings

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