The document discusses how tax havens like London and offshore banking enable massive amounts of wealth to be hidden from governments, estimated at $21-32 trillion globally. This hidden wealth could help end extreme poverty which requires $175 billion annually, but instead supports corruption. Developing nations have large debts while private elites from those countries hide over $7 trillion in wealth offshore. Ending tax havens and recovering this hidden money could help developing countries achieve development goals. The City of London specifically undermines other jurisdictions through secrecy and lacks regulation.

1. Legalised crime and the geography of corruption
– London, New York, Geneva, Luxembourg, Hong Kong…
By Basheerhamad Shadrach
If the world were to end extreme poverty, and redeem nearly one seventh of its population that
goes hungry every day, we require some 175 billion dollars each year for the next 20 years. This
need constitutes less than 1 percent of the combined income of the 30 richest countries of the world
that constitute the Organisation for Economic Cooperation and Development (OECD). While the
governments have the responsibility to help overcome poverty, it is ironical that governments of
developing nations and the OECD combined lost between $190 billion and $225 billion in the 2012 to
tax havens that ensure the billion people go hungry.
The people whosustain poverty
It is the greed combined with hunger for money that prevails among the top 50 global financial
institutions ensures that the world cannot overcome poverty that quickly. The total estimate of 50
topmost clients’ illicit assets held with the topmost 50 banks is $12.5 trillion, three times more than
the amount of money that is sufficient to make the world a better place to live, within our life time.
The reported assets produce no gain for anyone other than the tax havens that helpstash the wealth
from paying legitimate taxes to governments.
Let’s look at the other side, the world that is classified as ‘low-income’ group of countries. The
estimated cumulative debt of these 139 nations combined is $4.1 trillion at the end of 2010. And,
the estimated hidden wealth of private elites from the very same 139 nations is $7.3 to $9.3 trillion.
If these funds are redeemed, it would be possible for these nations to become creditors overnight!
But, neither the corrupt individuals from the 139 nations nor the banks that have sheltered their
wealth would want it.
So, who is responsible?
Now the main question is: who is the biggest culprit? Is it the private (corrupt) elite of the 139 low-
income nations or the 50 richest clientsfrom rich nations that have hidden their wealth? Or, the
banking industry that offers tax-havens to all those who want to escape legitimate taxation of their
lands? The bottom-line is that by making these assets dead, not one of them assistsin any way, in
any means to the worldwide fight against poverty. They are responsible for the making it difficult
for the billion poor people to lead a decent life, depriving them of food, health care, educational
facilities, livelihood opportunities and security. Moreover, their conditions, aided by the greedy
nations continue to plunder world’s natural resources, leaving it totally unsafe for our next
generations to enjoy the wonder of God’s creation.The rich, and the private elite in poor nations
combined, have stashed between $21 and $32 trillion in 2012.
However, it is possible to redeem the funds invested in tax free 80 odd secret locations of the world.
Among these are New York, London, Geneva, Zurich, Luxembourg, Singapore and Hong Kong. It is
possible for us to name and shame these cities if only we join hands. With just under 3 years to go
towards achieving the Millennium Development Goals, it is still possible to do something.

2. City of London Corporation
The City of London Corporation is one of those secrecy jurisdictions that create internationally
regulations suitable to the benefit and use of those who do not reside in their geographical domain -
the regulation that is designed to undermine the legislations and regulations of other jurisdictions.
To add to this, the City creates a deliberate, legally backed veil of secrecy that ensures the
jurisdictions making use of its regulation cannot be identified to be doing so. And, let us also not
forget that the city of London is just a square mile city; it embraces its branch operations in its other
tax havens such as Jersey, Guernsey, the Isle of Man, Cayman, BVI, Bermuda, and so on, making it an
indivisible whole. And, that is what London has done!
The corporation still is an ancient, semi-alien entity lodged inside the British nation state. It is a
"prehistoric monster which had mysteriously survived into the modern world" that only a few
people care that London has a mayor and a lord mayor today. It is time that they should care
because the corporation is an offshore island inside Britain, a tax haven in its own right. And to cap
it all, the City does have a noble tradition of standing up for citizens' freedoms against despotic
sovereigns, but this has morphed into freedom for money. We need to change this.
The impact of the City of London elsewhere
The London Summit owed to end the ‘Bank Secrecy’and ‘tax havens’ era, where leaders from G20
nations spoke with one voice.That said that the idea and the practice of tax havens in the City of
London and elsewhere is not something that concerns only the G20. The entire world, especially the
citizens of all developing and low-income economies should be concerned about this. There are six
good reasons to it.
First, tax havens aid individuals to evade tax in their homelands; the tax that is vital for its
infrastructure development. Secondly, tax havens, such as the City of London, redistribute squarely
the wealth generated in poor countries by the poorest of the world at their cost into the richest
nations of the world. Thirdly, it increases corruption, among the government officials who authorise
contracts and payments for government services rendered by parties. These illicit flows from
poorest nations to the richest ones that offer tax havens is,in more than 65% of cases, by
commercial entities, mostly to avoid taxes deliberately, thus forming a major chunk of corporate
corruption.
Fourthly, tax havens such as the City of London Corporation create financial instability. Banking
institutions that are threatened by onshore regulations often found solutions in tax havens, leading
to the erosion of regulatory capacities of onshore institutions too, creating it difficult for even
trading partners to know each other’s accounts. And, the hedge funds undermine the stability of
world’s markets, creating the idea that trading horizons might be of less than a minute’s duration,
thus distorting the concept of value. Most hedge funds are registered in the Cayman Islands with
their fund managers sitting in the City of London.
Fifth, due to the fact that the activity of tax havens entirely dependent upon secrecy, which in turn is
based entirely upon deliberate and artificial distortion of markets, it only a handful that are able to
access others’ information. Markets have no choice but to operate solely upon speculationsrather
than on the basis of efficiency.

3. Finally, these tax havens weaken democracies. The connivance between the various democratic
pillars of a society clearly is a threat to any nation’s integrity. There is more collusion today between
the politicians and the bureaucrats; the politicians and businesses; between the bureaucrats and the
business; between the media and the business houses; the administration and the executive.
Indian money abroad and the challenges facing it
In February 2012, based on a statement made to the Supreme Court, the Director of the Central
Bureau of Investigation (CBI) said that Indians have more than $500 billion of illegal funds in foreign
tax havens. There are also other estimates of $1.4 trillion, making it compelling for anyone to believe
that Indians living in India have stashed more money than any other nation. One of the objectives of
India’s anti-corruption protests headed by Shri Anna Hazare was to force government of India to
enact the Jan Lokpal Bill, but equally so to also bring back the billions stashed in foreign banks.
India’s black money economy is between 23 to 26%, compared to an Asia-wide average of 28 to
30%, and, to an Africa-wide and Latin America’s average of 41 to 44% each. The average size of the
shadow economy in 96 developing countries, studied by Schneider, is 38.7%. With its ambitions, the
India’s growth story has taken a beat in recent years, despite the fact that its black money market is
smaller in percentage as compared to Africa, Latin America and the rest of Asia. The mere size of
India and the impact of the shadow economy are telling in its inability to achieve the millennium
development goals.
India continues to be home to the most under-nourished children of the world whose situation is
much worse than those born in Sub-Saharan Africa. With one maternal death reported every 10
minutes, India stands to miss out on its MDG targets. Of 850 million people of this world without
adequate nutrition, 237 million live in India—slightly more than one in four. 49.2% of Indian
households lack toilets of any kind. India has the lowest per capita education and health spending in
the world.
With You, the passionate, and you, the protester, ‘Change’ is possible
In recent years,anti-corruption crusader, Anna Hazare was joined by Baba Ramdev, lawyer-politician,
Ram Jethmalani, and the opposition parties have demanded governmental action to bring back
stashed money abroad. Their crusade may be seen with colours of ambitions and motivations of
different kind. With more awareness and advocacy on the issue, it is important to encourage non-
governmental and legal entities to also join global efforts to highlight the cause and effect of tax
havens abroad.The Time magazine did recognize the common people as the ‘Person of the year’ in
the year 2006; and five years later, the protesters among the common people were named as the
‘Person of the year.’ This trend in the last five years clearly signifies the power held with common
people, and the role played by the social media, and the ICT tools that connect, network, voice the
voiceless and to amplify people’s concerns.
The Rules wishes to ignite the passion among the 2006 person of the year, and the resentment
among the 2011 person of the year to change the world. The millions of those with passion and
anger should now join hands with organisations such as the Tax Justice Network and the thinkers
and leaders who wish to clean up the City of London and the likes. It is time for world’s cities, towns
and villages to condemn the City of London, and practices it has legitimised for its own sake.