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ShareEloquent silences & obfuscations mark media coverage of this issue
The debate, or the lack of it, in recent days, on the important issue of our illegal money kept in Switzerland and other tax havens, has been rather interesting.
Many in the mainstream media have kept quiet, with hardly an editorial or analysis. TV channels, particularly the business ones, are silent. The Confederation of Indian Industry and the Federation of Indian Chambers of Commerce and Industry, which lobby for the interests of big business, are observing eloquent silence, too.
In the last few months, global newspapers, particularly the business publications such as Financial Times, Wall street Journal and The Economist, have been full of articles and analyses about tax havens and the determination of the USA and other Organisation for economic Cooperation and Development (OECD) countries to tear off the veil of secrecy over these tax havens, particularly Switzerland.
I have been following these developments for 15 years now. I have been arguing against tax havens and suggesting that we make plans to get our money back. I have also included this as a module in my finance course for many years. The latest is my column in this paper on March 4 on bringing back our illegal money from Swiss banks.
I now find that the CPI(M) in its manifesto has included the issue of our illegal funds in foreign tax havens and so have CPI, JD(U) and SP. BJP has also included it in its manifesto and LK Advani has even held a press conference on it.
After all this, one would have expected a major informed discussion on this vital issue. However, it has taken peculiar turns in our politically twisted atmosphere.
The political reactions first.
The Congress spokesperson has castigated Advani for raking up the issue now, instead of when he was in power. Perhaps the spokesperson is not aware of the fact that the global atmosphere regarding tax havens has dramatically changed in the last few months.
World attention was drawn to this issue after Germany stole data from LGT bank of Lichtenstein and got a long list of tax evaders including that of the head of German Post.
Then followed severe action from the US government against UBS, the largest Swiss bank, after which the latter agreed to part with details of tax evaders and to pay a fine. The OECD has published a list of these tax havens and categorised them according to the level of non-cooperation. The Obama administration is working on a legislation to deal a severe blow to these tax havens.
But see how absurd our political reactions have been. Congress spokesperson Abhishek Manu Singhvi said India could not discuss this item at the G20 meet on April 2 since it would be "out of line." This was when the major item on the agenda was dealing with tax havens.
There have been some articles in newspapers, too. One was by Ashok V Desai, who called the money "Advani's mythical trillion." Given his political orientation and bias towards big business, this was not unexpected. But what was shocking is the obfuscation of issues by bringing in the role of NRIs and their money.
Discussions on Indian illegal money in Switzerland do not involve NRIs and their deposits. But Desai makes absurd suggestions like 20 million NRIs making $25,000 per annum and a portion of it in Switzerland, etc. If the NRI is in USA or Norway, he will have his bank accounts in those countries --- why on earth in Switzerland?
Anyhow, we are debating not about the NRIs but about the resident non-Indians (RNIs) who have accumulated wealth in Swiss banks. Desai seems to be oblivious to the under invoicing ---over invoicing of exports or imports; commission in large projects or defence deals, etc in spite of being an "astute and expert" observer of the Indian scene for so long.
The following news items may illuminate him.In the first, a business news channel showed the Swiss Ambassador to India telling reporters at an event to commemorate 60 years of the Indo-Swiss Friendship Treaty, "Switzerland was 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... I would not say it would be stopped 100% (under a new law). But through this measure, it would be controlled up to a certain limit."
In another, a report in a business newspaper recently stated, "Swiss private bankers are likely to reduce their exposure to wealthy Indian clients as they cut down their discreet banking services in countries like Germany, France and the United States, analysts say. As the worldwide crackdown on tax evasion gathered momentum following the recent G-20 meeting in London, several Swiss banks, including UBS, which is the world's largest manager of private wealth assets, have issued travel directives to their "client-facing" staff not to visit foreign countries for carrying out what are called offshore wealth-management banking services. UBS, for instance, has asked its wealth management staff not to travel abroad to meet clients."
The report quoted Serge Steiner, a UBS executive, as saying this will also apply to India. "However, UBS India will continue to service wealth management for Indian clients," Steiner said. In effect, it would be a complete onshore (domestic) activity unlike the UBS wealth management staff descending from Singapore to service rich Indian clients."
