Wednesday, November 23, 2011

BVI Watch: Congo's opaque mining deals may have lost the state $5.5 billion

From Christian Science Monitor:

Congo mining concessions have been regularly sold at a fraction of their worth to shadow companies outside Congo.

By Jason Stearns, Guest blogger / November 21, 2011

The British parliament released a statement yesterday suggesting that the Congo had lost up to $5.5 billion in state assets through the undervaluation of mining concessions. Eric Joyce, who is head of his legislature's Great Lakes working group, backed up his allegation with a raft of documents from the Congo, the British Virgin Islands, and the United Kingdom.

Read more from the Christian Science Monitor, as well as Eric Joyce's Congo Fire Sale, Congo Fire Sale 2, and Congo Fire Sale 3.

TJN has criticised many offshore jurisdictions in the past - and we stand by all our criticisms. But we think that at this point we need to single out The British Virgin Islands far more than we have so far. It is, to put it bluntly, a vicious, sleazy, corrupted rogue state within the global financial system.

Again and again and again, those who are investigating scandals find their trails leading to the BVI. The Congo case is no exception.

The BVI is an Overseas Territory of the United Kingdom. It is a source of disgrace to the entire British nation state that this jurisdiction should be allowed to operate as a beserker in the global economy, helping wreck whole nations in the pursuit of the narrow interests of a small few.

We are targeting financial interests here, not the ordinary people of the BVI. But given the seriousness of what the pinstripe infrastructure in (and related to) the BVI are doing, it would be quite appropriate to shut this rogue state out of the global financial system.


Blogger Physiocrat said...

This is shocking but the problem starts in the Congo itself. The people must eject their leaders who are allowing their country's natural resources to be stolen and the land despoiled and polluted. Just like the UK, really.

To complain about tax havens is like complaining about the people who take stolen goods off the hands of criminals, whilst not worrying too much about the criminals themselves or the failure to secure the valuables in the first place.

There is a novel about a fictional African country called Allodia which explains what the country needs to do.

8:45 pm  
Blogger Nicholas Shaxson said...

Physiocrat, the world has been blaming the Africans for 50 years now and it's time at last to look at the other side of the coin.

To think that this is an 'either-or' situation where you either seek to tackle corruption in Africa or you tackle the money flows is a very strange way of looking at the world. Of course you must do both. 50 years of trying to tell Congo what to do has not got us very far, it seems. But we can do something about the tax havens.

12:26 am  
Blogger Physiocrat said...

We cannot tackle Africa's problems except by setting a good example. Which we do not. For centuries, British governments have allowed the country's resources to be stolen from the people, whilst our own tax systems leak like a rusty old bucket. This leaves too many people in the developed countries with a vested interest in tax havens, to the point that few people in power is seriously interested in an effective cure.

The solution has to start with us.

Concern with tax havens is diverting attention from the scandals going on under our feet. Literally. And it will not work anyway. Close down one tax haven and another will appear.

1:41 am  

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