subject: NI: Eduardo Galeano's View from the south. Bahamas
Date: Mon, 25 Sep 2000
New Internationalist . August 2000 (No.326)
"EDUARDO GALEANO'S VIEW FROM THE SOUTH"
Images - For Art History Class -
In the depths of a cave by the Pinturas River a hunter pressed his
hand red with blood on the stone. He left his hand there in some sort
of truce between the urgency of killing and the terror of dying. And
some time later another hunter printed, next to that hand, his own
hand black with soot. And then other hunters began leaving on the
stone the prints of their hands soaked in colours that came from
blood, ashes, earth and flowers.
Thirteen thousand years later, near to the Pinturas River in the town
of Perito Moreno, someone writes on a wall: 'I was here.'
- The Photographer -
Hiladio Sanchez lives in darkness, like the bat. Like the bat, he
sees with his ears. But the bat does not know how to take pictures.
Hiladio is a photographer, and a good one.
He was a soccer player, and a good one, 20-odd years ago. Playing for
Cuba's national team a ball to the head knocked him flat. He looked
dead. Some time later he woke up in the hospital. He was alive. He
Besides seeing with his ears, Hiladio sees with the eyes of his
imagination and his memory and he has found a way to tell us what he
sees. Camera in hand, he plies his art as miracle-worker of the
image. He measures distance by footsteps and adjusts the shutter by
the heat of the day or the cool of the afternoon. And when everything
is ready he aims and hits the target, guided by voices or by
silences, which are never quiet.
Hiladio Sanchez lives in darkness, like thebat. Like the bat he sees
with his ears Hiladio photographs his neighbours leaning against a
wall pocked with scars and he photographs sheets hanging from the
line and cups and pans hanging from nails, the slow passing of hours
and people, the light of the sun on the courtyard and the shadow that
slices through it.
He does not photograph the moon, though he knows it well. Each night
those cold fingers touch his face. It is the moon, calling him. And
the blind man plays deaf.
- Colours -
Some place in time, beyond time, the world was grey. Thanks to the
Ishir Indians, who stole colour from the gods, today the world is
resplendent; and the colours of the world burn in the eyes of all who
look at them.
Ticio Escobar accompanied a film crew from Spanish TV that came to
the Chaco to shoot scenes of daily life among the Ishir. An Indian
girl pursued the director, a silent shadow that stuck to his body and
stared into his face from up close, as if she wanted to get inside
his strange blue eyes.
The director turned to Ticio, who knew the girl, and that very
curious one confessed: 'I want to know what colour you see things.'
'The same as you,' smiled the director.
'And how do you know what colour I see things?'
- Sculptors -
Piltriquitron Hill has its head in the clouds. Until a short while
ago its head was a burned forest; now it is a carved forest.
A few sculptors, artists from here and from there, climbed that peak
to where the tall trees lay, levelled by a ferocious blaze, and they
set to work on the trunks that the flames had uprooted or mutilated.
The trees - were they dead or were they playing dead? For a week -
day in, day out - the sculptors kept at their task; and by the grace
and magic of their hands, the cadavers began to walk.
A gigantic tree trunk is now a harlequin/jestersprawled flat, with a
single hat for two heads.
The show begins when you arrive. The cemetery has become a theatre.
A gigantic tree trunk is now a harlequin/jester sprawled flat, with a
single hat for two heads. The harlequin/jester welcomes the
distinguished audience who step inside and wander from tree to tree
amid the wooden bodies that spring forth from the ruins and, dancing,
Eduardo Galeano, whose many books include the trilogy Memory of Fire,
lives and writes in Montevideo, Uruguay. Translation © Mark Fried.
Subject: NI: double dealing / crackdown. Bahamas
Date: Mon, 25 Sep 2000
New Internationalist . August 2000 (No.326)
By Michael Peel
In the Bahamian capital Nassau, plump American tourists shoot craps
against a background of sculptures and murals of mythical beasts.
'In the zone, Jack,' comes the shout from the Atlantis resort, as
dice fly from hands to table. The scene plays to a glamorous image of
the Bahamas that fades quickly outside the casino's doors. In the
streets behind shops selling Colombian emeralds and other exotica,
the preoccupations of city-centre workers are more mundane. A big
worry is a move by the world's richest countries to make tax havens
like the Bahamas end their secretive ways.
'Taking that away takes away a whole lot of jobs, a whole lot
of opportunities,' says Patrice, a bank worker.
The Bahamas won independence from Britain in 1973. But to many this
move to restrict offshore banking looks like a new form of
colonialism - the island nation is asking why it should have to
reform a financial system put in place by its former master. And
Bahamians also question the hypocrisy of industrialized nations whose
own banking systems are often thickly cloaked against outside eyes.
By their heavy-handed and inconsistent approach the rich nations
risk sabotaging a necessary crusade. Collective action to end the
dubious business done in offshore financial centres is long overdue.
The pressure from the big economies stems mainly from worries about
tax evasion. Governments looking to cut income taxes are casting
around for alternative measures to raise money for public spending.
An attractive option is to tap the wealth of citizens and companies
hiding their money offshore.
And there is a lot of money out there. The Organization for
Economic Co-operation and Development (OECD), a club of 29 of the
wealthiest nations, says the use of tax havens is expanding at an
exponential rate. A 1998 report on just two of the havens (the Isle
of Man and the Channel Islands) put the size of their financial
services industry at $350 billion - comparable to the gross domestic
product of the Netherlands.
****** end ******
New Internationalist . August 2000 (No.326)
-- The 46 major tax havens
-- Anguilla / The Bahamas / Barbados / Belize / Bermuda / Cayman
Islands British Virgin Islands / Montserrat / St Kitts and Nevis /
Turks and Caicos Islands / Andorra / Antigua / Aruba / Costa Rica /
Dominica / Grenada Jamaica / St Lucia / Monaco / Netherlands Antilles
/ Panama / St Vincent US Virgin Islands / Bahrain / Cyprus / Dubai /
Guernsey, Sark, Alderney Gibraltar / Isle of Man / Jersey /
Liechtenstein / Mauritius / Malta San Marino / Brunei / Cook Islands
/ The Maldives / Marshall Islands Nauru / Niue / Seychelles / Tonga /
Tuvalu / Vanuatu / Samoa Liberia
This is the background against which the OECD has decided to launch
a crackdown. In June it published a list of offshore centres that
engage in what it describes as 'unfair tax competition'. This means
they offer low or zero income tax rates with insufficient disclosure
on the individuals or companies doing business on their shores.
Havens that fail to change risk incurring economic sanctions starting
The OECD has spent almost two years trying to force the havens to
bend to its will. In 1998 it drew up a list of 46 targets in four
World Cup-style groups roughly divided by geography (see sidebars).
Those included range from politically stable territories and
independent nations to countries such as Liberia that lack government
worthy of the name. They span the continents - from Anguilla in the
Caribbean to Monaco to the Pacific island of Niue.
The thing all have in common is that offshore business plays an
important, if not dominant, role in their economies. In the Caribbean
many of the havens were developed by colonial authorities after the
Second World War. They saw offshore banking as an economic salvation
for island nations dubbed 'no soil, no oil' because of their lack of
The growth of financial services has helped make some havens the envy
of their neighbours. Gross domestic product per person in the British
Virgin Islands (BVI) last year was $32,700 - about 60 times higher
than Haiti. The problem is that this has been achieved with perks for
investors that few consider acceptable. The BVI capital, Road Town,
is the world's leading venue for creating offshore companies which
pay no income tax. Disclosure requirements are minimal. There is no
need to publish lists of directors, owners or shareholders.
The havens effectively act as flags of convenience for wealth. It
matters little where the business comes from. Offshore centres are as
cosmopolitan as the jewellery shop in central Road Town, where the
top-priced ring is Italian-designed and set with a Colombian emerald
and ten African diamonds.
What the depositors share is a gratitude for the privacy on offer.
One example is Michael Ashcroft, a controversial billionaire
businessman who donated nearly five million dollars to Britain's
opposition Conservative Party. He has formed sufficiently close links
with the Turks and Caicos Islands to loan his name to a school. Its
motto is suitably wholesome: 'The young of today are the pillars of
There are myriad reasons why people want to hide away money
obtained legally. For one thing it allows companies to keep joint
ventures secret from rivals. And it is a way for some businesses to
protect assets from lawsuits.
For individuals, tax havens provide a means to protect wealth and
avoid personal embarrassment. One banker gives the example of a
businessman trying to stop his partner finding out that he is paying
child support to his ex-wife. Others are safeguarding gains against
taxation or seizure by governments: witness the influx of private
banking business into the Bahamas from Latin America in recent years.
None of these arguments impress those charged with keeping dirty
money out of the havens. 'They tell you it's offshore for tax
reasons,' says an ex-British police officer. 'That's bullshit. The
only people who do it are people with something to hide.'
The havens' opacity is a frustration to investigators trying to
track criminals and their illegal earnings. Documents that are
publicly available in most countries have to be obtained by legal
process. This puts those requesting help in a Catch-22 situation:
information crucial to proving wrongdoing is often denied because
they have failed to provide enough evidence that a crime has been
Money-launderers exploit this to leave investigators with arduous
paper chases. Using a technique known as 'layering', the fraudsters
build up edifices of companies, each of them registered as the owner
of the one on the tier below. By the time the pursuers have reached
the end the money may well have gone elsewhere.
- Potential for abuse -
The lack of contact between tax havens and offshore investors
creates further potential for abuse. Even though the BVI has
registered more than 350,000 offshore companies, the islands are the
last place you would look for company directors or offices. The big
overseas presence is not from the businesses incorporated there, but
from service providers such as Barclays Bank.
No-one knows how many of the offshore companies are conduits for
criminal activity. The 80 or so agents registered to act for them
rarely, if ever, meet their ultimate clients. The two worlds are
separated by many intermediaries like lawyers and accountants.
The irony is that the colonial powers were so eager to develop such
opaque structures. With the experiment over, the havens find
themselves under attack by their creators. Bodies like the Financial
Action Task Force, a 28-member inter-governmental body set up to
combat money laundering, and the Financial Stability Forum, all have
the same mantra: 'more transparency now' .
The former colonial states are showing little regard for the legacy
they left behind. Some havens are wrestling with social injustices
that stem from the tax systems they've inherited. Forced to raise
money through indirect levies rather than income tax, they punish the
people any progressive system ought to help.
The Bahamas is a case in point. To compensate for the absence of
personal income tax, imports are subject to a hefty duty. This
extends to basic items such as milk. While this is irrelevant to
offshore investors it makes a big difference to local people,
especially those at the bottom of the income scale. 'In the ghetto
store, prices are real high,' says Alex Tair, who works for the
Government's gaming board. 'The rich guy has got it much more easy
than the poor guy.'
The industrial nations are reluctant to address the issue of what
happens to these small nations when their tax haven status is
withdrawn. Change could drive money away in a rush, causing job
losses among banks and other support services. The response of the
OECD is a vague commitment to work with development agencies to
cushion the social fall-out.
- Double standards -
Nor do rich nations admit to their own double standards in the
banking arena. While they preach openness to outsiders, countries
like Switzerland and Luxembourg have high levels of privacy in their
financial systems. An OECD report on tax evasion published in April
went out of its way to reassure members that furtiveness was
acceptable. 'The report is quite explicit in recognizing the
legitimate role that bank secrecy plays in protecting the
confidentiality of financial affairs,'said Gabriel Makhlouf, chair of
the committee that prepared the research.
These were sweet words to Swiss banks which have been involved in a
string of outrages. And the scandals keep flowing - from Nazi gold to
loot hidden by Sani Abacha, the late Nigerian dictator. Switzerland
trades on the image that when you walk into one of the country's
banks, no-one will know the door by which you leave.
This makes the OECD's position patently hypocritical. While it is
reticent to crack down on its own members, the speed of its action
against tax havens threatens the livelihoods of many thousands of
people. The result could be doubly unfair: economic and social
turbulence for small offshore centres as their business shifts to big
economies that still offer a 'no questions asked' service.
What is needed is a broad and enforceable commitment to higher levels
of disclosure everywhere. A worldwide lifting of the financial veil
would offer benefits to both rich and poor countries. Both would cut
down on the tax lost to evasion. Greater transparency might also
allow the creation and policing of new ethical levies. One example is
the Tobin Tax on currency speculation aimed at helping development in
This global advance must occur in a way that softens its impact on
the people of the offshore centres. The OECD should commit itself to
helping those affected, through financial aid and retraining. Many
havens are doubly vulnerable given their shaky dependence on tourism
revenues. The last thing they need is for another pillar of their
economies to be kicked away without replacement.
Colonialism shaped these economies into what they are today and
people will see it as a betrayal if their former occupiers deliver a
killing blow. " JC