Cognitive dysfunction here

African leaders, for decades dependent on handouts from the West because of natural disasters, conflict and uneven development, shunned the offer of charity, calling instead for “investment”.
Speaking after the summit, Macky Sall, the Senegalese president nominated to speak on behalf of the continent, said European leaders were not looking at the bigger picture.

OK, fine, more investment. Yes, why not?

He accused the European governments of pandering to “popular opinion” and claimed African governments would have no need for handouts if they were able to collect €60 billion lost through tax avoidance by multinational companies and other “fraudulent” activities.

And you want to get more investment by taxing investment more then, do you?

Hmmm.

And of course we get a nutter commenting:

John Christensen, of the UK-based Tax Justice Network, said Mr Sall was “absolutely right” to highlight the loss of a “very significant” source of income.
“For decades we have encouraged these huge ouflows of capital from Africa, much of which is illicit, and this has led to a long-term underdevelopment of African countries,” he said.

It is of course bollocks that there has been capital flight from Africa. FDI appears to be running at $90 billion a year or so.

28 thoughts on “Cognitive dysfunction here”

  1. Look at the damn article. They say $60 billion a year of capital flight. That is lower than FDI of $90 billion, isn’t it?

    This number stuff really isn’t that damn hard.

    The actual TJN usual quote is that capital flight is larger than ODI. Which it may well be, but that’s different from FDI.

  2. The link is to the Telegraph, a paper you slag off for reporting facts.

    You can’t get the reported currency right, it being euro.

    There is no reference to back up the €60bn or how it is comprised. From the tone of the article I infer that the €60bn is the capital flow to Europe only.

  3. Benedict Arnald, does that €60bn include Robert Mugabe’s missus ‘ Harrods shopping bill or just the funds Bob has siphoned off into Swiss bank accounts?

  4. Henry Crun is right – capital flight from Africa is made up of funds abstracted by corrupt officials and politicians and lodged safely overseas.

    Promoting economic development in Africa is like trying to fill a bath without the plug in.

    Oh, and Arnie, well spotted on that currency mistake. But you’re wrong when you say:
    You’re just like Murphy, aren’t you?
    Murphy is much, much funnier.

  5. Tim,

    You are forgetting that SJW are only concerned with the correct answer, not the factually accurate answer.

    Why bother with facts when you can be correct all the time?

  6. Henry Crun

    Yes, there will be an element of corrupt leaders and their coterie embezzling funds into European secrecy jurisdictions (more notably Mauritius now).

    The problem with quantifying those sums are all due to the finance and legal industries that allow that actively promote schemes that make the cash trails impossible to follow.

    That’s one of the reasons why transparency in the receiving jurisdictions should be a priority.

  7. Arnie: That’s one of the reasons why transparency in the receiving jurisdictions should be a priority.

    Oh yes, much more important than tackling the root of the problem at source.

    Because an African will always embezzle his country’s wealth if he’s in a position to, presumably.

    Bit racist, Arns.

  8. TMB

    “Because an African will always embezzle his country’s wealth if he’s in a position to, presumably.

    Bit racist, Arns.”

    I didn’t bring that up, HC did, and you said

    “capital flight from Africa is made up of funds abstracted by corrupt officials and politicians and lodged safely overseas.”

    The root cause is the desire to embezzle, yes, but it is only possible with the connivance from external facilitators. The solution is to be able to follow the trail so that action can be taken with all certainty of conviction.

  9. Yes, yes but why not tackle the problem at source where there is clear illegality rather than downstream where the illegality is codified in the fantasy laws of the downmarket hack and your good self?

  10. I find somewhat nauseating the conflation in this viewpoint between government income and economic development (people’s/society’s/individual’s income). Society is not government. Society’s money is not government’s money (and vice versa).

  11. TMB

    You’re not getting it. Embezzlement is possible because the financial and legal professions allow it to happen. This is nothing to do with what Murphy says. It’s obvious this is the case.

    No one can do anything because proving it is extremely difficult and when there is a good case, the lawyers can run rings around the prosecution (wherever it’s being pursued) because defining the ultimate beneficiary can be a grey area.

  12. Arnie – I am getting it. I’m getting that you are less interested in going after law-breakers than in going after people or, *spit*, bankers, or, *double spit* tax havens whom you consider to be behaving ‘unprofessionally’ or ‘unethically’.

    Cos the black man, he know no better.

    Oops darn it, I just made you sound racist again.

    Don’t you wish you could say: “Your time here is over”?

  13. I wasn’t the one that raised it, MB.

    I merely stated that the problem of embezzlement was part of the problem.

    It’s you that saying “the black man, he know no better.”

    and you said this

    “Henry Crun is right – capital flight from Africa is made up of funds abstracted by corrupt officials and politicians and lodged safely overseas.

    Promoting economic development in Africa is like trying to fill a bath without the plug in.”

    Don’t you wish you could say: “Your time here is over”?

  14. @Arnald in a word rubbish.

    South Africa has one of the strictest regulatory laws for financial transactions. RICO laws require you to produce ID and a proof of address just to buy a pay as you go sim card. That hasn’t stopped the wholesale looting of the country by corrupt officials.

  15. Arnie: Don’t you wish you could say: “Your time here is over”?

    If you’re seriously answering that question of me, then the answer is absolutely “no”!

    For two reasons. First because I’m not in favour of stifling debate – I can always withdraw if I’m so minded.

    Secondly, and more importantly, because I think you’re jolly good fun. Not as much fun as Murphy, it’s true, ut a lot more fun than the ineffably dreary and depressing DBC Reed.

  16. Gunker

    “South Africa has one of the strictest regulatory laws for financial transactions. RICO laws require you to produce ID and a proof of address just to buy a pay as you go sim card. That hasn’t stopped the wholesale looting of the country by corrupt officials.”

    So how do they do it, these corrupt officals?

    Surely it isn’t by using structures designed by the financial and legal professions? No, of course it can’t. It must be magic.

  17. @arnald
    So how do they do it, these corrupt officals? Beats me. The problem is they do. The strict laws in their own land don’t prevent it. So how in buggery will strict laws in other countries stop it ?

  18. re: Arnald

    Simple. If you don’t enforce the law, the law isn’t worth anything. It’s not just the law, but the people and the culture it operates in. Africa as a whole does not lack law. What it lack is the will to actually enforce it equally. I mean, just look at our Lord and Savior Obama who gets to pick and choose the law he see fit to enforce.

  19. BigFire, I think Arnald is saying African corruption is the Joos fault.

    Property rights and free trade will bring prosperity to Africa. All else is intrigue.

  20. Only loonies would say that to stop money laundering from Africa you shoudl crack down on tax havens….OK I am convinced. Cracking down internally is never going to work so you need to outsource tax compliane to uninterested foreigners. Mobuto would enjoy this.

  21. It’s not “cracking down on tax havens” per se, it’s the uncovering of the structures the criminals are using. That can only happen if the industries themselves got to grips with it. There are laws at every step, yes, but being circumvented. There’s nothing wrong with asking the question rather than assuming that organisations campaigning for answers are branded ‘nutters’.

    You’re right, it does beat you, and you still feel able to know all about it.

    But you’re right that it ‘beats you’.

  22. Arnie, so brave of you to carry on plugging away.

    What beats you is the logic of going after the criminals first. How would you apply your “forget the criminals, let’s uncover the structures” policy work with, ooh – to pick an example – jihadist mass murderers?

    Bulldoze Molenbeek; unplug the internet; destroy mobile comms!

    Hooray!

  23. TMB

    I’m not sure I’ve said that the criminals should be ‘forgotten’, but jihadist mass murderers are getting the funds from somewhere.

  24. Arns – can you hear that wrenching sound? That’s you, that is, tearing the goalposts from their moorings.

    As for the funding – that’s probably in large measure from benefit payments and consequently out of your pocket and mine.

    We’re part of the structure, d’ye see?

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