SEATTLE — In another feat of revolutionary muckraking, a cache of over 13.4 million documents containing confidential data of over 120,000 individuals and entities from offshore Bermuda law firm Appleby has been leaked to the international community. The documents were acquired by German newspaper Süddeutsche Zeitung, following which the information was made public by the International Consortium of Investigative Journalists.
A large proportion of the Paradise Papers disclose the number of tax havens, offshore accounts and dealings that financial and political elite entities have across the globe. Moreover, there were shocking reveals about U.S- Russian connections, Apple’s dealings, Canadian government businesses and the British royal family’s estates.
Not unlike the 2016 leak of the Panama Papers, the Paradise Papers is a noteworthy indicator of global poverty. It sheds light on the deeply entrenched malpractices of businesses, the issue of tax evasion and income disparities, coupled with the state of labor laws and working conditions globally.
The Paradise Papers also revealed the level of corruption across many countries. This could effectually result in vast amounts of government revenue and expenditure being misallocated and unaccounted for.
Mining rights in the Democratic Republic of Congo were infringed upon when an infamous Israeli billionaire, Dan Gertler, was tasked with negotiating terms for the workers for a massive $45 million. $1.3 billion in potential revenue has been due to mining deals in the country.
Moreover, the leak also revealed that Jean-Claude Bastos de Morais allegedly profited from cash earmarked for development projects in Angola’s sovereign wealth fund. The cash allocated for investing in a crucial deep-sea port and reinvesting profits from the country’s oil market was directed to Bastos’ company, Quantum Global.
Suspicious trade agreements between Mauritius and the African countries were also brought to light as part of the Paradise Papers leak. There has been a considerable rise in the number of tax havens in the country. As a result, rich corporations have amassed between $100 billion to $300 billion in tax revenue.
Regionally, discoveries made from the Paradise Papers will be an impediment to future development plans in West African countries, while the majority of their populations still live below the poverty line. Many companies and powerful entities and individuals hide their wealth in offshore trade havens so that they can evade taxes and hide bribery and illicit dealings. For example, the Paradise Papers also disclosed how Brazilian cabinet ministers were illegally transferring state funds to offshore accounts overseas.
The leak has also caused widespread speculation in India that may point toward the aggravating health crisis in the country, given the fact that the names of over 714 Indians were released with the leak. India spends only 1.3 percent of its GDP on healthcare, despite the global average being more than 6 percent.
According to the Boston Consulting Group, the offshore funds accumulated by the rich and elite amount to over $10 trillion. Yet, it is estimated that earmarking about $175 billion internationally could effectively eliminate extreme poverty in 20 years. Not only is this an indicator of the world’s financial capacity, but it also shows how social expenditure is being misused nowadays.
Perhaps a large proportion of the funds could be channeled towards supporting the 2030 U.N. Sustainable Goals and combating various social issues associated with global poverty. Tax evasion can generate significant deficiencies in developing economies particularly, owing to the tax revenue lost by levying corporate and wealth taxes on businesses.
Not unlike the Panama Papers, the Paradise Papers can help build the foundation for better policymaking. Transparency and accountability measures by governments will also show a steady improvement. It will give NGOs, governments and international organizations a stepping stone for solving complex social and economic issues impacting the world’s poor.
– Shivani Ekkanath