Saturday, April 4, 2009

:|: MHO :|: Secret wealth abroad


Secret wealth abroad

Switzerland 
has been accused of giving shelter to 
black money 
and 
there has been a lot of inflow 
of such wealth from India and other countries of the world."
 This is not L K Advani, 
on election mode,
 speaking last Sunday, 
but 
the Swiss ambassador to India 
briefing the media in Delhi last year.

The occasion was the 
60th anniversary 
of Indo-Swiss Friendship Treaty. 
Admitting that Indian black money 
gets hoarded in his country, 
he added that 
the new law in Switzerland would, 
not stop it, 
but
 control it 
"up to a certain limit".

The Swiss diplomat authentically answers
 the first of the FAQs, that is, 
whether a lot of Indian money is really
 stashed away in Swiss banks. 

Swiss banks 
are not the only secret destination. 
There are 37 such shelters in the world, 
says US Inland Revenue. 
The secret owners of the secreted
 monies operate in secrecy 
— venal businessmen, corrupt politicians, 
public servants, drug lords,
 and criminal gangs like the D-company.

 The slush monies are the 
financial RDX for terror,
 besides weapons of mass destruction of
 national and global finance. 
That there is secret money is no more a secret.
 Only the amounts and persons are secret. 
But 
how much of India's stolen wealth
 could be stashed in Switzerland?
 Specific estimates of this later. 
Before that,
 here is a sideshow,
 but 
a relevant one.

Illicit money 
is the dirty outcome of modern capitalism. 
But, 
after 9/11, 
the US realised that
 not just the buccaneers in business, 
but 
Osama bin Laden
 could also hide his funds in secret havens 
and use them to bomb the world. 
Campaigns against dirty money 
as high security risk commenced 
with the path-breaking research done
 by Raymond W Baker, 
a Harvard MBA and a Brookings scholar. 

He published his research as a book
 Capitalism's Achilles Heel:
 Dirty Money and How to Renew 
the Free- Market System. 
The book was published in 2005. 
This set off intense debate in the US
 as the exposure linked dirty business 
and dirty money with terror and national security.

Raymond Baker 
had estimated, using authentic data, 
tools and reasons, the dirty wealth secreted 
in banks at $11.5 trillion to which,
 he found,
 one more trillion 
was being added annually.
 He added that in the process the 
West was getting an annual bounty 
of $500 billion from 
the developing countries,
 India included.

Global Financial Integrity (GFI),
 a global watchdog headed by Baker 
to curtail illicit money flows, 
has recently brought out detailed 
estimates of the black wealth hoarded 
in secret havens from different countries.
 GFI research shows that
 during the period 2002 to 2006, 
annually $27.3 billion 
was stashed away from India,
 making a total of
 $137.5 billion
 for the five-year period. 

That is,
 in just five years, 
Indian wealth amounting to Rs 6.88 lakh crore 
has been smuggled out of India. 

This gives a clue as to how much 
Indian money would have slipped out of India
 in the last 62 years,
 particularly during the 
Nehruvian socialist regime 
when the income tax (97.5 per cent) 
and 
wealth tax
 (almost equal to the income
 earned on investments)
 together constituted double the income earned.

It is undisputed that 
the Nehruvian socialist model 
forced huge sums out of India. 
So the amount of Indian black wealth 
secreted away in the last 60 years 
— estimated at 
from $500 billion (Rs 25 lakh crore) 
to
 $1400 billion (Rs 70 lakh crore) 
— does not seem to be wide off the mark.
 Economists call it 
flight of capital. 
This is the people's money stolen from them.

See the consequence 
even if part of it is brought back. 
A portion of it would make India free 
from all external debts 
which is now over $220 billion; 

India 
will transform into an economic superpower; 
some 10 or 15 Indian rupees 
could buy a US dollar 
which today 50 Indian rupees cannot;
 a litre of petrol on our roadside would cost
 Rs 15 or even less, 
against today's 50 plus;
 the cost of imports in rupee terms 
would be down to a third or half; 
India's entire infrastructure needs can be funded;
 India will become so energy efficient 
and costcompetitive that exporters may 
need no sops at all; India will lend to 
— not, as it does now, borrow from —
 the world; 
Indian housing can be funded 
at affordable cost; rural poverty can be wiped out... 

The list is endless. 
But, 
then, 
is it possible to bring back 
the secreted monies?

 What are the roadblocks to such efforts?  


Hinduism is more a way of life than a method of worship.
Dharmo Rakshati Rakshithaha
If you protect Dharma, Dharma will in turn protect you.
Hindus, If people slap you once, slap them twice!




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