Speaking on the sidelines of the United Nations General Assembly last week, Prime Minister Imran Khan highlighted the problems with illegal transfers of money from developing countries to the West, and sometimes also legal or semi-legal ones, which every year constitute hundreds of billions of dollars. My home country Norway and Nigeria have initiated the establishment of a panel on international financial accountability, which the PM expressed appreciation for.
Imran Khan has again taken up issues related to money laundering. As important as it is, we also know it will take a long time before we can expect major changes and results. Yet, the work must go on at individual country level, by groups of countries and through the United Nations and other international organisations. The private sector, including the powerful multinationals must get on the right side of history and do their part. Without the private sector doing its part, there will be little change; money laundering will go on, tax havens will survive although they are criticised today, but still used, and the rich companies and individuals will continue to pay as little tax as they can get away with, and we can just refer to the news about the token amounts that President Donald Trump has paid in recent years. Yes, he calls it ‘fake news’.
It is true that many rich countries in the West have adopted legislation against shady placement of money in tax havens. In spite of good intentions on the part of many parliamentarians, the conservatives on the right are probably not as keen to let deeds follow words. In my home country Norway, it was recently revealed that the new chief of the huge Norwegian Oil Fund, which is the world’s largest government fund, has used tax havens for his private financial businesses over decades. The Oil Fund is a department of the Central Bank of Norway, but even the Bank’s Governor expressed understanding and, therefore, acceptance of the use of tax havens, yet, it the government’s policy to work for ending the use of tax havens. We realise that it will take time for tax havens to become politically unacceptable to use by honest business people—the way slavery and apartheid became politically unacceptable.
Not only is there transfers and whitewashing of money from the North, and rich people in the South, through tax havens, affecting developing countries particularly badly, and also poor people in the North, in addition, there is a huge backlog of outstanding transfers from the West to developing countries if we admit that the West looted developing countries during the colonial time, and stood in their way for political, economic and social development that time. Little of this is likely to be corrected any time soon. Instead, we rather like to criticise the developing countries for their shortcomings in democratic development and rule of law.
Some countries have over the years honoured the United Nations 1970 recommended to transfer 0.7 percent of their GDP (GNI) as official development aid (ODA). However, I believe only six countries have reached that target, Norway, Denmark, Sweden, The Netherlands, Luxembourg, and UK. Norway and Sweden target allocation of one percent of GDP in development aid. USA on the other hand, the world’s largest economy, allocates 0.18 percent of GDP in development aid, with Israel and Egypt receiving about half of it. It should be mentioned that the Arab countries are generous donors, with UAE leading, not only among the Arab countries, but among all the world’s donor countries. However, it is usually only the 36 richest Western countries in the Organisation for Economic Cooperation and Development (OECD) that are included in the list of the Development Assistance Committee (DAC).
Some may think I am outdated when I still talk about development aid in 2020. Today, people talk more about ‘trade not aid’. True, better and fairer trade relations must be established between North and South, but that doesn’t make us free from increasing and improving the aid sector, including professional, democratic, labour union and other assistance. Until now, I find that the World Trade Organisation (WTO) has not at all fulfilled its purpose to help the developing countries, and ordinary people there, to benefit more equally from their sweat and labour, indeed the women’s struggle and the poor men in industry and in rural villages. So, I don’t find it outdated to talk about development aid—although the whole aid sector’s thinking and practice must be changed, and transfers must be massively increased. Instead of one percent, I’d suggest ten percent, even more, along with many changes, some of which were on the agenda when the New International Economic Order (NIEO) was debated in the 1970s; alas, shelved and forgotten today. A massive increase in transfers from North to South could make developments in the South real and sustainable, avoid conflicts, and encourage people not to migrate to the North.
Last week, the European Union (EU) presented new plans for migration and refugee policies. If the plans will be adopted by the organisation, it will all become more orderly for Europe. Yet, it will also become more rigid for the rest of the world, notably those who risk all to seek a better life in Europe for themselves and their children, either they are refugees, trying to escape war and misery, or they are economic migrants, trying to get away from poverty and hopelessness. Let us remember that the USA was populated precisely by such people from Europe; and then there was also the involuntary and forced migration from Africa. The illegal and immoral history of slavery leaves lasting stains on the West and others who took part in it, including religion when used to justify it. The indigenous people of America were certainly also not treated right.
I believe it is important that we re-learn this part of history. It is essential to remember it for the future development of the West, too, for the ways that the new multi-cultural, multi-religious and diverse Europe develops. Yes, if we want to preserve many of the positive aspects of the European cultures about democracy, human rights, science, and so on. But if Europe and America don’t share more of their wealth with the rest of the world, indeed the developing countries, their life-style will not last for more than, say, a hundred years. If we want the West to save its soul, its moral leadership and values, Europe should look into itself deeply. Development aid and migration issues must be considered in a long-term perspective, not in selfish short-term ways.
Alas, the European Union’s plans for migration are very short-sighted; not much better than President Trump’s talk about building a wall against Mexico. It is ostrich politics. We say that politicians can only think as long as their elected term lasts, or at the most, two or three terms. But where are the rest of us? Where are the intellectuals, the religious and moral thinkers—of migration, development aid, international trade and tax, democracy and inclusion of all? When will we ever learn?