Letter: The art of the deal as taught in Havana, Cuba

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The way to a man’s heart is through his stomach, so the saying goes. Picture taken July 13 2018 at the Saint Cristobel Palace Hotel, Havana, Cuba. [San Cristobel Palada, Havana]

Dear Sir:

Two very fat doctorate owners Dr Ralph E Gonsalves and Dr Uday Narain Nayak, with their women, enjoying dinner, very-very expensive wine, and having a good laugh at the expense of others.

Putting that aside I thought I would write about corruption, which has absolutely nothing to do with the picture or the people therein or the deal.

I just had corruption turning over in my mind and had to unload it, thought the picture would amuse you or annoy you that’s all. I will sooner than later revert to the real story with hopefully some recordings.

Corruption

Sources of corruption, the factors that have turned it into a powerful obstacle to sustainable economic development. We noted that the presence of dysfunctional and onerous regulations and poorly formulated policies, often created incentives for individuals and businesses to short-circuit them through the paying of bribes. We now turn to the consequences of corruption, to better understand why it is a destroyer of human prosperity.

First, corruption undermines government revenue and, therefore, limits the ability of the government to invest in productivity-enhancing areas. Where corruption is endemic, individuals will view paying taxes as a questionable business proposition. There is a delicate tension between the government in its role as tax collector and the business community and individuals as tax payers.

The system works reasonably well when those who pay taxes feel that there is a good chance that they will see a future payoff, such as improvements in the country’s infrastructure, better schools and a better-trained and healthier workforce. Corruption sabotages this implicit contract. When corruption is allowed to flourish taxpayers will feel justified in finding creative ways to avoid paying taxes or, worse, become bribers themselves.

To the extent that corruption undermines revenue, it adversely affects government efforts to reduce poverty. Money that leaks out of the budget because of corruption will not be available to lighten the burden of the poor. Of course, corruption also undermines the case of those who argue that foreign aid can be an important element of the fight against global poverty – why should taxpayers be asked to support the lavish lifestyles of the kleptocrats in corrupt political parties?

Second, corruption distorts the decision-making connected with public investment projects (Tanzi and Davoodi, 1997). Large capital projects provide tempting opportunities for corruption. Governments will often undertake projects of a larger scope or complexity than warranted by the needs of the country. Public investment will thus be higher—the world is littered with the skeletons of white elephants, often built with external credits, and representing a heavy burden on meager budgets.

In the context of scarce resources, governments will find it necessary to cut spending elsewhere, sometimes in socially vital areas, or in operations and maintenance. Tanzi (1998) plausibly argues that corruption will also reduce expenditure on health and education because these are areas where it may be more difficult to collect bribes, though some have argued that provider absenteeism, a serious problem in the educational and health sectors of many countries, is itself a form of “quiet/silent corruption.”

Third, there is solid empirical evidence that the higher the level of corruption in a country, the larger the share of its economic activity that will go underground, beyond the reach of the tax authorities. Not surprisingly, studies have shown that corruption also undermines foreign direct investment since it acts in ways that are indistinguishable from a tax; other things being equal, investors will always prefer to establish themselves in less corrupt countries.

Wei (2000) reviewed FDI data from 14 source countries to 45 host countries, and concluded that: “an increase in the corruption level from that of Singapore to that of Mexico is equivalent to raising the tax rate by 21-24 percentage points.”

Fourth, corruption discourages private-sector development and innovation and encourages inefficiency. Budding entrepreneurs with bright ideas will be intimidated by the bureaucratic obstacles, financial costs and psychological burdens of starting new business ventures and will either opt for taking their ideas to some other less corrupt country or, more likely, desist altogether. In either case, economic growth is adversely affected.

The high incidence of corruption will mean an additional financial burden on businesses, undermining their international competitiveness. Unlike a tax, which is known and predictable and can be built into the cost structure of the enterprise in an orderly fashion, bribes are unpredictable and will complicate cost control, reduce profits and undermine the efficiency of those who must pay them to stay in business.

Mauro (1995) used some indices of corruption and institutional efficiency to show that corruption lowers investment and, hence, economic growth.

Fifth, corruption contributes to a misallocation of human resources. To sustain a system of corruption, officials and those who pay them will have to invest time and effort in the development of certain skills, nurture certain relationships, and build up a range of supporting institutions and opaque systems, such as off-the-books transactions, secret bank accounts, and the like.

Surveys have shown that the greater the incidence of corruption in the country, the greater the share of time that management has to allocate to dealing with ensuring compliance with regulations, avoiding penalties, and dealing with the bribery system that underpins them, activities that draw attention and resources away from production, strategic planning, and so on.

Sixth, corruption has disturbing distributional implications. Empirical work shows that corruption actually contributes to worsening income distribution. Gupta, Davoodi and Alonso-Terme (1998) have shown that corruption, by lowering economic growth, perceptibly pushes up income inequality. It also distorts the tax system because the wealthy and powerful are able to use their connections to make sure that the tax system works in their favour. It leads to inefficient targeting of social programs, many of which will acquire regressive features, with benefits disproportionately allocated to the higher income brackets.

Seventh, corruption creates uncertainty. There are no enforceable property rights emanating from a transaction involving bribery. The firm that obtains a concession from a bureaucrat as a result of bribery cannot know with certainty how long the benefit will last. The terms of the “contract” may have to be constantly renegotiated to extend the life of the benefit or to prevent its collapse.

Indeed, the briber, having flouted the law, may fall prey to extortion from which it may prove difficult to extricate himself. In an uncertain environment with insecure property rights, the firm will be less willing to invest and to plan for the longer-term. A short-term focus to maximize short-term profits will be the optimal strategy, even if this leads to deforestation, say, or the rapid exhaustion of non-renewable resources.

This uncertainty is partly responsible for a perversion in the sorts of incentives that prompt individuals to want to seek public office. Where corruption is rife, politicians will want to remain in office as long as possible, not because they are even remotely serving the public good, but merely because they will not want to yield to others the pecuniary benefits of high office. Where long stays in office are no longer an option, then the new government will want to steal as much as possible as quickly as possible, given a relatively short window of opportunity.

Eighth, because corruption is a betrayal of trust, it diminishes the legitimacy of the state and moral stature of the bureaucracy in the eyes of the population. While efforts will be made to shroud such corrupt transactions in secrecy, particularly when the opportunities for bribery are linked to some government-inspired initiative, the relevant details will leak out and will tarnish the reputation of the government, thereby damaging its credibility and limiting its ability to become a constructive agent of change. Corrupt governments will have a tougher time being credible enforcers of contracts and protectors of property rights.

Ninth, bribery and corruption lead to other forms of crime. Because corruption breeds corruption, it tends soon enough to lead to the creation of mafias and organized criminal groups who use their financial power to infiltrate legal businesses, to intimidate, to create protection rackets and a climate of fear and uncertainty. In states with weak institutions, the police may be overwhelmed, reducing the probability that criminals will be caught.

This, in turn, encourages more people to become corrupt, further impairing the efficiency of law enforcement, a vicious cycle that will affect the investment climate in noxious ways, further undermining economic growth. In many countries, as corruption gives rise to mafias and organized crime, the police and other organs of the state may themselves become criminalized. By then, businesses will not only have to deal with corruption-ridden bureaucracies, but they will also be vulnerable to attacks from competitors who will pay the police or tax inspectors to harass and intimidate.

There is really no limit to the extent to which corruption, once it is unleashed, can undermine the stability of the state and organized society. Tax inspectors will extort businesses; the police will beat and kidnap innocents and demand ransom; and prime ministers will demand payoffs to make themselves available for meetings; aid money will disappear into the private offshore bank accounts of senior officials, the positioning of offspring and siblings into high ranking state jobs what appears the creation of a corrupt dynasty; the head of state will demand that both state and party funds and donations be credited directly to his personal account and those of his family dynasty and friends. Investment will come to a standstill, or, worse, capital flight will lead to disinvestment. In countries where corruption becomes intertwined with domestic politics, separate centres of power will emerge to rival the power of the state.

At that point, the chances that the government will actually be able to do anything to control corruption will disappear and the state will mutate into a kleptocracy, the eighth circle of hell in Dante’s Divine Comedy.

Jolly Green

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49 COMMENTS

  1. Mr. Uday Nayak was awarded a honorary doctorate by the British ‘University of Bolton’ very recently in 2017. As an award and not a degree earned he should not be using the term doctor prefixed before his name. He is quite simply Mr Uday Nayak.

    The University of Bolton in England issues dozens of these honorary doctor degrees every year. From 1988 to 2005 they only awarded only one such honourary degree each year. In 2006 they issued ten. 2007, one. 2008, nine. 2009, ten. 2010, thirty-eight. 2011, twelve. 2012, twelve. 2013, ten. 2014, thrirt-six. 2015, sixteen. 2016, ten. 2017, thirty-two.

    An honorary degree, in Latin a degree honoris causa [“for the sake of the honor”] or ad honorem [“to the honor”, is an academic degree for which a university or other degree-awarding institution] has waived the usual requirements, such as matriculation, residence, a dissertation, and the passing of comprehensive examinations. The degree is most typically a doctorate, and may be awarded to someone who has no prior connection with the academic institution or no previous postsecondary education. An example of identifying a recipient of this award is as follows: Doctorate in Business Administration [Hon. Causa].

    The degree is often conferred as a way of honoring a distinguished visitor’s contributions to a specific field or to society in general.

    It is recommended that such degrees be listed in one’s CV as an award, and not in the education section. With regard to the use of this honorific, the policies of institutions of higher education generally ask that recipients “refrain from adopting the misleading title” Doctor and that a recipient of an honorary doctorate should restrict the use of the title “Dr” before their name to any engagement with the institution of higher education in question and not within the broader community.

    Some universities and colleges have been accused of granting honorary degrees in exchange for large donations. Honorary degree recipients, particularly those who have no prior academic qualifications, have sometimes been criticized if they insist on being called “Doctor” as a result of their award, as the honorific may mislead the general public about their qualifications. It can be similarly misleading when respected individuals are referred to as “Professor”, especially in a university or government context.

  2. This definitely reads as “The art of the deal as thought by Jolly Green.”

    WTF is this about really…and what with the picture of our PM, the first lady and guest, how does this fit in?
    Senator Jolly Green as your newly appointed post as “spokesperson for the opposition”, don’t you have any other business to take care of other than rubbishing our PM and family, without cause!!?? This is not effective political opposition at all, this is plain prejudice and jealousy, combined with racist overtones. Goddammit, get a life idiot!

  3. All the talk about whether someone is or isn’t a doctor does not take away from the well reasoned story describing the various steps contributing to the failure of Communism in Cuba or anywhere else it has been attempted. While the article deals with corruption more than Communism itself, you have to conclude that Socialism is the main driver of corruption.

  4. Here are some sayings I thought would amuse or annoy the readers, which have absolutely nothing to do with the picture or the people therein or the deal.

    “Shame on the misguided, the blinded, the distracted and the divided. Shame. You have allowed deceptive men to corrupt and desensitize your hearts and minds to unethically fuel their greed.”

    “If you want to be lied to, all you have to do is believe everything that government ministers tell you.”

    “Is ours a government of the people, by the people, for the people, or a kakistocracy rather, for the benefit of knaves at the cost of fools?”

    “If a politician obtained a great wealth after he has been elected, his being an immoral corrupt man is not a possibility but it is a self-evident reality!”

    “But nothing surprises me now. I’ve grown used to living in a country that is out of joint as if it has been struck by an enormous earthquake so that the roads are no longer flat, nor the building straight.”

    “Political corruption works by having an equally corrupt legal system to protect it.”

    “Government corruption made it possible to obtain authentic passports and visas, which were much more reliable than fake ones.”

    “They say “Money corrupts people,” I’ll say money corrupts only people with low character”

  5. Allow me to present “Nine Reasons why Corruption is a Destroyer of Human Prosperity” by Augusto Lopez-Claros.

    Mr Lopez is a world-renowned economist, having worked as director at the World Bank, also as an IMF representative to many countries.

    In his opening paragraph, he writes. “In an earlier blog post, we commented on the sources of corruption, the factors that have turned it into a powerful obstacle to sustainable economic development…we now turn to the consequences of corruption, to better understand why it is a destroyer of human prosperity”.

    Reason (1):
    “First, corruption undermines government revenue and, therefore, limits the ability of the government to invest in productivity-enhancing areas. Where corruption is endemic, individuals will view paying taxes as a questionable business proposition. There is a delicate tension between the government in its role as tax collector and the business community and individuals as taxpayers. The system works reasonably well when those who pay taxes feel that there is a good chance that they will see a future payoff, such as improvements in the country’s infrastructure, better schools and a better-trained and healthier workforce. Corruption sabotages this implicit contract. When corruption is allowed to flourish taxpayers will feel justified in finding creative ways to avoid paying taxes or, worse, become bribers themselves”.

    Sounds familiar? Sure, bet!

    The above are the exact words of Jolly Green… under the heading “Corruption”. But truly, its Augustus Lopez- Claros words. Lifted by Jolly Green, and presented as his/her writings.

    Moreover, if we continue further, we realize that every word that follows, from “corruption” to “…Divine Comedy” is really that of Augustus Lopez- Claros and not Jolly Green; unless Green and Lopez are the same; highly improbable.

    However, what would drive an individual to undertake such a thing, to set about to deceive and lie… in such a boldfaced manner, wanting to steal to “plagiarize” other people’s writings, and passing it off as theirs?

    One of the things that will push a man to do just this is, “corruption”. Only a despicable, vile and corrupt person like Jolly Green would do such a thing, albeit fighting his/her imaginary battle with our beloved Prime Minister Ralph E Gonsalves, in the effort to try to slander our PM and to pull him and his family down, (badmouth them).

    Nevertheless, this is comedy of the highest order, notwithstanding the very serious nature of the act of plagiarizing itself. Shame on you senator Jolly Green!

    Jolly person is certainly no better than that deadhead Peter Binose, the master plagiarizer himself, who might just happen to be one and the same… Jolly Folly de Green.

    To wit, “People who live in glass houses should not throw stones”.

  6. Try as you may VinciMan you cannot make wrong right. Just answer the question what was PM Gonsalves doing having a private meeting in a private dining room in a hotel in Havana Cuba? Nothing else matters.

    Where is the transparency in that and why the hideaway?

    Nothing else matters other than that.

  7. Shame we can’t see under the table to see if the comrade has his pants down. Because it would appear, he has been caught with his pants down, but no one can see that yet.

    In any other country, there would be an inquiry, perhaps even the police would be involved. But the way things are arranged in SVG he is the law, the judge, and the jury, he is, or thinks he is, untouchable.

    Unless he answers with a fitting answer what he was doing in Cuba with this proposed government leaseholder and business operator, there will be further loss of confidence by the Vincentian people. Also loss of confidence by SVG’s decent overseas government friends. Which of course excludes all ALBA members and Cuba and Venezuela in particular, because they cannot be classed as decent friends.

  8. We take the gist of these revelations as you are there pointing out Jolly Green, so what therefore are you really telling us? Is this Uday Narain Nayak to be taken seriously?

    Is this Uday Narain Nayak no different than a Church mouse? Just asking? One needs ask a series of questions here when taking note of the following:

    [ The combined cash at bank value for all businesses where UDAY holds a current appointment equals £404, a combined total current assets value of £404 with a total current liabilities of £553 and a total current net worth of £-149. Roles associated with Dr Uday Narain Nayak within the recorded businesses include: Director, ] I once knew such a person and the outcome was not good for the bankers.

    We must also ask where is the “investment money” coming from in order to build this “Commercially Important People (CIP) lounge at the Argyle International Airport?”

    And why so many Directorships? What is the real game plan? Are we missing something? Who signed off on this and how?

    • You Ben- James out of some false pride and the seemingly unscrupulous “I don’t care” attitude that you project, even after being “fingered” for the theft of other peoples writings (plagiarizing) and your leanings towards and love for this and other corrupt practices( it’s in your genes), you will never admit to being the fraud and mercenary propagandist that you are.

      Nevertheless, I will continue to point my middle finger in your face and dare you to knock it away, you running dog and apologist for the criminally insane neo-colonialist vis a vis capitalist English mercenary racist clan; Don’t doubt it! It’s all in your writings, especially under the pseudonym Michael Dingwall.

      “Honesty doesn’t always pay, but dishonesty has its cost”.

  9. Why have a secret meeting in Cuba, what deal was done between these two fat men?

    Thanks, Jolly for letting us know that this man is not a real doctor of anything.

    As said elsewhere Mr Uday Narain Nayak was only in Cuba for two and a half days.

    There should be an inquiry, but there never will be.

    The whole matter stinks.

  10. These things are so my dear Storm and the country thus always being kept in the dark about what the Prime Minister and his family are doing in the nation’s name because far too many Vincentians are extremely dunce. They are very well trapped in profoundly serious “Mental Slavery” and terribly afraid of their new Masters voice.

    If you were to ask anyone here, young or old about their existing enslavement, the poor things react with great surprise at your question, as they are utterly convinced that they are truly entirely free.

    A desolate country indeed, inhabited by a bunch of lost souls, completely dunce and unaware of their regrettable bleak condition. The old slavery has given way to a new form of slavery. Johann Wolfgang von Goethe that German Philosopher, (28 August 1749 – 22 March 1832) was so correct when he said, “None are more hopelessly enslaved than those who falsely believe they are free”! Here lives the examples!

  11. Isn’t it laughable how the corrupt Dufus’s can take the words “mental slavery” and twist it around to suit them?
    However, we already know that being mentally enslaved is simply “… a slave’s unwillingness his refusal to let go of Massa’s customs, his ways.” All of which the kiss *** Dufu’s cannot comprehend.
    That is why they continue to bleat-out like lost sheep all of Massa’s “ideals”. Prattling off his ideology, his philosophy, his politics and last but not least, their love for oppression, and Massa’s oppressive system of mind control.
    They do all this in a manner that highlights and proves to us beyond a shadow of doubt that “…the ideas of the ruling class are in every epoch the ruling ideas, i.e. the class which is the ruling material force of society, is at the same time its ruling intellectual force”. Certainly, it is the Dufus’s who need to emancipate themselves…

    • Forget all the rubbish VinciMan and just tell us why these two fat men met secretly in Cuba without any knowledge of the Vincentian public or even the ULP members of parliament. Such behavior can only be interpreted as dirty stinking side dealing. If the photo was never brought to light no one but those 4 people and perhaps two other members of the dynasty at home would ever know. Without a proper acceptable explanation, most people will think and more so think the worst of the whole situation.

      There must be an inquiry, perhaps the US Stae Department can help?

  12. What a sad specimen of that which a human being ought not to become and you are just such a one vinciman, forever sinning for your maintenance, your upkeep by a master whose voice you so dread and are so afraid of hearing in rebuke.

    Emancipate yourself dear man! This is the 180th year of Slave emancipation you halfwit as your master have reminded the rest of us who have the ability to think for ourselves! Take a hint or a cue from the seagulls outside, see how they enjoy their freedom as they wing it through the sky!

    But there again Vinciman, maybe you are indeed that true blockheaded nincompoop, that domesticated Equus africanus asinusa, a plain and basic a simpleton, well suited to your submissive lowly deprived position and nothing else. What a shame! Your master’s poor reliable servant boy!

  13. Isn’t that your subconscious speaking Ben-James, talking to you, about YOU? Among other things, “forever sinning for your maintenance, your upkeep by a master whose voice you so dread”!!?? Sure is! Satan in hell!

    Moreover, how can you even begin to think for yourself, when your “class” already prescribes for YOU, the how, the where’s, and the why’s, all the means thereof, in how YOU should think. You aint no vinciman. Didn’t you understand my “ruling class” comment Dufus?

    And while you busy checking on me in my innocence,( I did no wrong!) why not check on YOU, and dispute what I said about the despicable racist, jealous, envious and pretentious YOU. Bet you can’t…why, because it’s the truth! Go ahead, please point out where I lied on you…and am this “block-headed nincompoop…etc.

    And again, what is nincompoopish about the truth (plagiarizing, theft, corruption and lies, on your part). Where have I told a lie? But you’re not “Augusto Lopez-Claros” eh!!?? And I’m the “…nincompoop”. SMH!

    Dufus James Ben. Including a photo of our comrade PM Ralph E Gonsalves and Mrs Gonsalves entertaining friends while enjoying a meal, does not implicate him/them in any wrong doing period. Not in any shape, in any form. And your copying and pasting Mr Lopez-Carlos writings under their photo implying nonsense, is just that NONSENSE! Plain RUBBISH! Don’t you get it?

    • Ralph Gonsalves was not the entertainer he was the entertained. He would never buy Crystal Champagne in a million years.

      Camillo Gonsalves said this was a deal by Invest SVG he never said this was a deal sealed in Cuba by his father the dynasty leader.

  14. Vinciman is the Marxist voice of the Gonsalves/Francis propaganda machine. He supplies propaganda for the Gonsalves/Francis family dynasty and their intimate club the ULP. His job is to try and protect these people from the truth while fooling the citizens into believing that nothing is wrong when something is very wrong.

  15. Mr. Uday Nayak and all his Instagram friends who he communicated with have just made all there accounts private on Instagram. But it is too late I took screenshots of them all which I have now stored.

    real_top_gun

    Havana, Cuba
    78 likes
    real_top_gunA humorous evening with Prime Minister Dr.Ralph Gonsalves & Mrs Gonsalves #sancristobalpaladar
    dbhatnagarWow you in Cuba… awesome
    ksamir_2002Wow U R with prime minister👍
    neha_ahuja_rajagopalSo cool …!!! Can’t wait to try some of the Montechristos!!!
    super_shah_gr8@real_top_gun Drsaheb aap ka bhi jawab nahi 👍🥃
    salutesaby👌👏

  16. Mr. Jolly, you deserve an award for exposing this matter. Such behavior is absolutely unforgivable, your letter has exposed this matter to not just SVG but also the region and I now see it is reported worldwide.

    Bravo Sir, bravo.

  17. Really, can’t the Comrade have a little meeting in Cuba with a client of the state of SVG without you all jumping to conclusions. Perhaps they both bumped into each other by mere coincidence. So what if it was rather secretive? So what if it was not the correct thing to happen? Much of how the Comrade operates is somewhat unconventional. He is the kind of man that kisses and hugs his female security guards that is unconventional but there is nothing wrong with that either.

    He is quite simply an unconventional man doing unconventional things in an unconventional way, he is the greatest.

  18. Is there no way that this matter can be investigated by a world authority, or Interpol? We all know that he is the minister in charge of the police and it is impossible here to get him investigated by the police let alone charged with anything. He has been charged in the past with rape and it was simply dismissed by the DPP.

    Is there no authority that can take this matter up? Is there any outside authority that can investigate this affair?

    This story has been reported in the news in Africa, apparently by a Nigerian student studying in SVG

  19. It’s not nice to mock the master after all he has done for the Vincentian people. You will all be laughing on the other sides of your faces when he finds out who you are. At some time in the future expect a visit, he has long arms and an even more extended memory.

    He has built you an airport with other peoples money, he has worked round the clock to put food on your tables, and this is how you treat him.

    There are even Vincies in the diaspora who are working against him; you also will not be forgotten.

  20. Your quite right Don. As long as he can keep the ULP in power as far as I am concerned he can do what he likes. You must respect him for his ability to keep out the NDP.

  21. What I would like to know is this, is this in some way an accusation of corruption? Is this an accusation of Prime Minister Gonsalves doing a secret side deal in Cuba?

    I suppose it must be asked in the strongest terms why PM Gonsalves met Dr. Uday Narain Nayak in Cuba. If it is true Nayak only spent two and a half days in Cuba it must be obvious he was only there to conclude a deal, it could not be a holiday.

    There are many kinds of tourist in Cuba. Medical tourists, sports tourists, education tourists, holiday tourists, sex tourists, is this a new one corruption tourism?

    It does not look good, it does not sound good. We need an urgent investigation into this matter.

    I have never written on this kind of media before and it surprises me that more ordinary Vincentians are not joining in the questioning of this matter. What on earth is wrong with all you Vincentian, don’t you really care a damn about what is going on? The country is broke and you are all to blame because of your ignorant stupidity.

    You have got all these mindless reverse propagandists coming here to try and protect PM Gonsalves like dopey Don, varacosed Vinciman. and tortious Turtle Man. What is wrong with you all, are you that frightened of this white dictator?

  22. What you all need to understand is that by the people saying nothing means they support and back Ralph.

    Keep at it comrade! Keep at it!

    Thank you Vinciman for your great input into this matter.

    As for all you others including James H, you have lost and the comrade has won.

  23. https://www.independent.co.uk/news/world/politics/criminals-and-corrupt-politicians-steal-1trn-a-year-from-the-worlds-poorest-countries-9707104.html

    At least $1trn a year is being “stolen” from the world’s poorest countries by criminals and corrupt officials who siphon cash through money laundering, tax evasion, and embezzlement.

    The staggering cost of corruption is revealed in a study published today by ONE, the anti-poverty group co-founded by the rock star Bono. It calls on the G20 group of rich nations, including Britain, to expose the anonymous shell companies which are used to “rip off” poor countries. According to ONE, the millions diverted from poverty-stricken nations is channeled through banks and secret companies in places including London, Delaware and Hong Kong.

    If the money was retained by the developing nations, it could help avert 3.6m deaths a year between 2015 and 2025, the study concludes. It would also mean that these countries would no longer need to rely on overseas aid from rich nations.

    The report found that $3.2trn of the world’s $20trn of undeclared assets originated in developing countries. If the missing millions were taxed, it could bring in revenues of $19.5bn a year. In sub-Saharan Africa alone, curbing corruption could educate an extra 10m children a year; provide antiretroviral drugs for more than 1m people with HIV/Aids and pay more almost 16.5m vaccines.

    David Cameron and George Osborne secured the backing of the eight leading economies to crack down on shell companies and tax havens at last year’s G8 summit in Loch Erne, Northern Ireland. But ONE fears that progress around the world is stalling and is warning that the drive must be extended to the top 20 economies, including China and India, at a G20 summit Australia in November.

    A four-point plan proposed by ONE urged G20 leaders to:

    expose the “phantom firms” involved in money laundering by making information about them publicly available
    bring in strong “payment disclosure laws” on oil, gas, and mining to stop natural resources being “stolen” from poor countries
    crackdown on tax evasion through an automatic exchange of information so that poor nations can collect taxes they are due
    ensure all governments publish data so the public can “follow the money” and hold their leaders to account.
    Dr David McNair, ONE’s transparency and accountability policy director, said: “In developing countries, corruption is a killer. Up to 3.6m lives could be saved if we end the web of secrecy that helps the criminal and corrupt. When governments are deprived of their own resources to invest in the essentials – like nurses and teachers – the human cost is devastating.”

    John Githongo, an anti-corruption campaigner and chief executive of the Inuka Kenya Fund, said: “For too long, G20 countries have turned a blind eye to massive financial outflows from developing countries which are channelled through offshore bank accounts and secret companies. Introducing smart policies could help end this trillion dollar scandal and reap massive benefits for our people at virtually no cost. The G20 should make those changes now.”

    The ONE report, The Trillion Dollar Scandal, says: “Corruption is perhaps the greatest threat to economic growth in developing countries and the uncomfortable truth is that, all too often, money diverted from their own budgets ends up in G20 countries and their related jurisdictions.”

    It adds: “Illegal manipulation of cross-border trade is the biggest source of losses to poor countries. The secrecy that allows that activity to thrive may also help to conceal financial flows related to criminal bribery and theft by government officials, human trafficking and/or the illegal sale of arms and contraband, depending on the circumstances.”

    Some 70 per cent of the 213 biggest corruption cases between 1980 and 2010 involved anonymous shell companies, according to ONE.

    “These phantom firms are essential tools of the trade for money launderers. They may hide the identities of individuals who profit from illegal activities, including the trafficking of arms, drugs and people, the theft of public funds and/or illegal tax evasion.

    “In dozens of jurisdictions around the world, a phantom firm can be created with less information than is needed to obtain a driving licence or open a bank account. Currently completely legal, they exist solely on paper, and allow the people who own or control them (the ‘beneficial owners’) to keep their identities hidden.”

    The report says that governments, law enforcement agencies and ordinary citizens face “an impossible task” when they try to reclaim the “stolen assets.” It adds: “They are thwarted by the ease with which criminals can create complex, multi-layered financial structures in which an anonymous shell company can be owned by another shell company or a trust, resulting in a nearly impenetrable web of secrecy that can block even the best law enforcement efforts.”

    A spokesman for the Department for International Development said: “The UK has made strong progress on trade, tax and transparency following last year’s G8 in Loch Erne, benefiting countries across the world including the poorest nations. Britain will maintain momentum to improve tax collection, break down trade barriers and promote transparency in developing countries.”

    How poor countries are robbed
    In Zambia, a leaked audit report suggested that Mopani Copper Mines had failed to pay tens of millions of dollars due in local tax. Glencore, which owned 73 per cent of Mopani, denied the allegations.

    Five African countries – Ghana, Kenya, Mozambique, Tanzania and Uganda – lost an estimated $15bn in tax revenues between 2002 and 2011 due mainly to “trade mispricing” of imports or exports, allowing firms to shift capital to other countries to evade taxes or launder money.

    In 2011, subsidiaries of oil and gas firms Shell and Eni paid $1.1bn to the Nigerian government for an offshore block containing estimated oil reserves of nine billion barrels. The government then transferred precisely the same amount to an account in the name of Malabu Oil & Gas, a phantom firm whose hidden owner was the country’s former petroleum minister Dan Etete.

    In 2008, the Zimbabwean army took control of the Marange diamond fields. Since then, government diamond mining concessions have been allocated to several companies in questionable circumstances – including Mbada Diamonds, which is partly controlled through companies registered in the British Virgin Islands and Mauritius.

  24. Don and Land Turtle you are a pair of absolute dynasty appointed idiots, if this happened in the US or most other places there would be impeachment.

    I just hope the US State Department and the UK Foreign Office are following this matter.

  25. Simple Simon Vincentians don’t give a dam nor does anyone else, see how many people have complained.

    Leave the comrade alone he deserves more.

  26. The question should be considered as to how many other Saint Vincent and the Grenadines were negotiated secretly in Cuba?

    This is certainly a mind-blowing matter I would never have believed it if I didn’t see the picture and at the time read the Instagram site comments of all those involved.

  27. An explanation should be demanded in parliament by the opposition.

    Can you imagine if the boot was on the other foot and Gonsalves was in opposition if the NDP leader was photographed in a foreign country having a secret meeting with someone who is being granted a contract by the state of Saint Vincent and the Grenadines?

    Gonsalves is obviously dealing with an idiot because only an idiot would post such matters on Instagram, Twitter or FaceBook. What a stupid individual.

    Nancy you are quite right to wonder how many of our agreements with foreigners have been done partly in CUBA.

    Gonsalves really was caught with his trousers down, we do not need to see under the table as suggested by G.T.

  28. Perhaps it would be better he leaves them down because if he hasn’t crapped himself, he surely will at some time in the near future.

    Which family are you referring to our robbed friend, I hope it’s not the dynasty because if it is please tell us more.

  29. Thank you, Nancy Jo, few have the guts you have.

    So why was Ralph Gonsalves sitting with a client of the State of Saint Vincent and the Grenadines in a hotel in Havana Cuba?

    Enough time has passed for an appropriate answer or a resignation.

    But we all know we can expect neither because there is no shame.

    Also, he did what he did because he could, it’s his plantation and the Vincentian people are his slaves.

  30. I am disappointed that no Vincentian newspapers or media houses picked this up and ran with it. I suppose like the citizens they are terrified of the regime also.

    It is a dreadful shame when people in any country are frightened to talk or criticise openly without the fear of reprisals from a ruler, politician, political party, secret police, or family dynasty.

    What has happened in Venezuela is happening here, people are so divided that some will support filth regardless of the consequences, others are terrified of the consequences of speaking out.

    I hope everyone appreciates the service to humanity that the editor here is providing.

  31. Do not worry Nancy Jo, I spoke with granny, and she has been talking with the spirits, his fate will be similar to Chavez, a writhing, screaming death as Karma drags him down to where he belongs.

  32. Are we still to be entertained by plagiarism, corruption, fraud and lies? I’ve missed so much lately… since!!

    If Jolly Green wants to have a discussion on “corruption” he should open the floor, then “jolly-welly” we should so. Don’t hide behind some…”a photo”, to spew nonsensical rubbish about SVG’s Prime Minister.

    • So Vinciman as a ‘know all know nothing’ Gonsalves collaborator, tell us why Ralph Gonsalves needed to do a deal behind closed doors in Cuba, instead of the spotlight in SVG?

      You cannot make a wrong right no matter how much rubbish you present.

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