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Latest Developments, November 18

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Structural maladjustment
The Inter Press Service reports on the release of a new UN report on the current state of the world’s Least Developed Countries, while quoting some of the organization’s economists who are highly critical of the impact the World Bank and IMF have in such countries.
“There are currently 48 poorest countries with low per capita income of less than a dollar a day. About two-thirds of LDCs are located in Africa, and all indicators suggest that they are the worst affected by the International Monetary Fund (IMF) and World Bank’s market-oriented policies.
‘The neo-liberal policies (fostered by the IMF and World Bank) devastated these countries,’ says Dr. Supachai Panitchpakdi, [UN Conference on Trade and Development’s] secretary general. ‘These policies turned most sub-Saharan African countries from net food producing countries into net food importing countries.’
Team leader for the report, Zeljka Kozul-Wright, said that the LDCs are the victims of ‘structural maladjustment’ policies followed over the last 40 years, which resulted in ‘boom-bust cycles and growth collapses.’

Aiding repression
The Washington Post reports the US government has launched an investigation to determine whether technology made by California-based Blue Coat Systems helped the Syrian government monitor dissidents.
“On Thursday, three senators urged the Obama administration to investigate whether Blue Coat and another California-based company had provided “tools of repression” to Damascus.
‘The sale of U.S.-made equipment that may have contributed to ongoing violence is unacceptable and should be investigated as soon as possible,’ said the letter from Sens. Mark Kirk (R-Ill.), Robert P. Casey Jr. (D-Pa.) and Christopher A. Coons (D-Del.).
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The senators who asked the Obama administration to investigate Blue Coat also asked for an investigation into the California-based company NetApp.
Bloomberg News has reported that NetApp equipment is part of a Syrian Internet surveillance project designed to intercept and catalogue all e-mail in Syria.”

Copyright trumps all
The Electronic Frontier Foundation’s Trevor Timm argues a proposed US copyright law – the Stop Internet Piracy Act – will give corporations the power to censor Internet sites and could endanger human rights activists around the world.
“Ironically, we know from the WikiLeaks cables that the State Department has also aggressively lobbied many other countries for strict new laws similar to SOPA. They have even offered to fund enforcement and literally draft the laws that sacrifice free speech for greater copyright protection for Hollywood.
Over one hundred law professors signed a letter staunchly opposing the Senate’s version of this bill on constitutional grounds earlier this year. Even Google’s public policy director Bob Boorstin said the bill ‘Would put the US government in the very position we criticise repressive regimes for doing – all in the name of copyright’. Here’s hoping Hillary takes a closer look and repudiates SOPA as adverse to US interests both at home and abroad.”

Shadow world
Bradford University’s Paul Rogers reviews a new book, written by former South African member of parliament Andrew Feinstein, on the global arms trade and the “web of malpractice” into which it draws the world’s politicians.
“Throughout The Shadow World, Feinstein emphasises the sheer corruption of the whole process, pointing to the enticements and kick-backs, always overshadowed by the ubiquitous use of ‘commission’ and ‘agents’, as though the distancing of corruption through intermediaries somehow makes it more acceptable. What he seeks to do is open up perhaps the greatest international can of worms of the current era, but this is inevitably an area replete with rumour and all too often affected by conspiracy theories that divert attention from the reality of trading in death.”

Cheaper is not always better
Michael Jennings, a lecturer at the University of London’s School of Oriental and African Studies, argues that donor pressure for poor countries to open public tenders to international competition is not necessarily good for their economies.
“Public procurement is generally seen as a technical, accounting issue, not a development one. This view is profoundly wrong. State and donor-funded purchasing is a significant part of overall GDP in developing countries, around 20% (and substantially more in some countries). Where that money is spent, and whether governments are able to make decisions on how to use their public resources, matters considerably for development.
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Getting value for money is important, of course. Spend less per individual drug, for example, and you get more drugs for the overall money spent. But “value” should not only reflect monetary considerations. Used in the right way, procurement could be an important development tool: helping create jobs, boosting skills, supporting emerging industrial sectors, helping national economies wean themselves gradually off aid.”

Ostracizing tax havens
ECONorthwest’s Ann Hollingshead writes that although not much in the way of concrete policy came out of the recent G20 summit, its host, French President Nicolas Sarkozy, had some harsh words for a handful of tax havens, including one of France’s neighbours.
“Sarkozy intonated that a list of eleven uncooperative jurisdictions should be ‘excluded from the international community,’ including: Barbados, Trinidad and Tobago, Antigua, Botswana, Brunei, Panama, Seychelles, Uruguay, Vanuatu, Switzerland and Liechtenstein. He added that a list of countries which do not conform to acceptable tax practices would be published at all future G20 summits. ‘We don’t want to have tax havens any more.’ He said ‘Our message is very clear.’”

Power shift
The Overseas Development Institute’s Jonathan Glennie argues there has been “a subtle rebalancing of power” between aid donor and recipient countries over the last few years.
“Changes in the global context are the main causes of this change in body language: donor economies are doing badly, calling into question their assumptions of always knowing best; emerging powers are doing well, implying different ways of doing things and providing poor countries with other avenues for trade and aid relationships; and poor countries are doing better economically than before, giving them more confidence and shaking off an attitude of dependence.”

Latest Developments, November 15

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Vulture funds
The Guardian reports there are growing calls for the UK to close a legal loophole that allows so-called vulture funds to use Jersey courts to collect money from poor countries.
“Vulture funds legally buy up worthless debt when countries are at war or suffering from a natural disaster and defaulting on their sovereign debt. Once the country has begun to stabilise, vulture funds cash in their cheap debt deeds, at massively inflated cost to the countries.
In the case before the Jersey court, to be decided next month, FG Hemisphere, run by vulture financier Peter Grossman, is trying to collect $100m from the DRC on a debt that appeared to start out at just $3.3m. The original debt was owed to the former Yugoslav government to build power lines.”

Gibraltar tax ruling
Agence France Presse reports Europe’s highest court has ruled against a tax reform proposed by the UK for its territory of Gibraltar, on the grounds that it would constitute state aid to offshore corporations.
“The system was ‘specifically designed’ so that companies with no real physical presence could avoid taxation because it would be based on the number of employees and the size of business premises occupied in Gibraltar, the court said.
The assessment to levy the tax ‘excludes from the outset any taxation of offshore companies, since they have no employees and also do not occupy business property,’ the court said.”

Growing inequality
Euromonitor has released a new report that suggests global inequality is on the rise – “high net worth individuals” increased their wealth by nearly 10 percent in 2010 – and is likely to continue growing in the years ahead.
“It is possible for governments to help narrow the gap between rich and poor by introducing various redistribution mechanisms, such as social welfare programs, minimum wage legislation, higher taxes for the rich and better educational opportunities for the poor,” according to Euromonitor’s Gina Westbrook. “However, many governments are trying to tackle their growing debt troubles, leaving very little financial room for investing in efforts to ease the plight of the poor.”

Toxic dumping trial
Netherlands-based oil and metals trader Trafigura is back in a Dutch court appealing a million-euro fine for illegally exporting toxic waste that was subsequently dumped in Cote d’Ivoire, while the prosecution is seeking a penalty twice that large, as well as the overturn of acquittals for the city of Amsterdam and the Amsterdam Port Services.
“On July 2, 2006, toxic residues on board the Probo Koala were prevented from being offloaded for treatment in Amsterdam’s port and redirected to Abidjan, where they were dumped on city waste tips.
Trafigura, which denies any link between the waste and subsequent deaths and has an independent experts’ report backing its stance, reached out of court settlements for 33 million euros and 152 million euros in Britain and Ivory Coast that exempted it from legal proceedings.
But a United Nations report published in September 2009, found ‘strong’ evidence blaming the waste for at least 15 deaths and several hospitalisations.
The dumping caused 17 deaths and thousands of cases of poisoning, Ivorian judges said.”

Resource extraction harm reduction
The UN News Centre reports on a new book on exploitation of natural resources in post-conflict settings, which includes advice for the international community whence most extractive industry companies originate.
“The publication stresses four areas where international support can be helpful which include providing help to post-conflict countries so they secure better contracts with companies extracting natural resources, increasing transparency in payments and decision-making, supporting the monitoring of companies extracting natural resources, and encouraging strategic planning using revenues to provide immediate gains to the population.”

Reviving cluster munitions
Human Rights Watch’s Steve Goose says the US is leading the fight against the elimination of cluster munitions in negotiations, currently underway in Geneva, to establish a new draft law that would permit the “continued use, production, trade, and stockpiling” of weapons 111 countries have already agreed to ban outright.
“The [Convention on Certain Conventional Weapons] proposal would also establish a terrible precedent in international humanitarian law, adopting for the first time an instrument with weaker standards after one with stronger standards has already been embraced by most nations. The trend has been for the law to grow progressively stronger, with ever greater protections for civilians.”

Free trade opposition
Al Jazeera’s Patty Culhane blogs about the Asia-Pacific Economic Conference in Hawaii, the proposed Trans-Pacific Partnership and protesters not sold on the benefits of international free trade.
“The bottom line for these protesters is that they feel the expanding global economy means their culture is being replaced, their resources exploited and their natural wealth taken. It is true that tourism here means much of the money made goes back to the giant hotel chains. There are jobs, but is it better to be paid to clean up after tourists, or to work in a field? That isn’t really the question I’m learning. They don’t all necessarily want to go back to what they had, but they want a bigger share of what is here now.”

Arab Spring media spin
The University of Michigan’s Juan Cole contends the Western media’s coverage of the Arab Spring as a purely political protest was tactically motivated.
“If the revolutions in Tunisia, Egypt and Libya were merely about individualistic political rights – about the holding of elections and the guarantee of due process – then they could be depicted as largely irrelevant to politics in the US and Europe, where such norms already prevailed.
If, however, they centred on economic rights (as they certainly did), then clearly the discontents of North African youth when it came to plutocracy, corruption, the curbing of workers’ rights, and persistent unemployment deeply resembled those of their American counterparts.
The global protests of 2011 have been cast in the American media largely as an “Arab Spring” challenging local dictatorships – as though Spain, Chile and Israel do not exist. The constant speculation by pundits and television news anchors in the US about whether “Islam” would benefit from the Arab Spring functioned as an Orientalist way of marking events in North Africa as alien and vaguely menacing, but also as not germane to the day to day concerns of working Americans. The inhabitants of Zuccotti Park in lower Manhattan clearly feel differently.”

Latest Developments, November 1

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Commitment to development
The Center for Global Development’s David Roodman presents his organization’s latest Commitment to Development Index which assesses donor countries based on policies that go beyond aid levels, but he expresses concern over the US’s skyrocketing ranking as a result of its increased number of troops in Afghanistan.
“The approach in the security component to military activities is shaped by three ideas: some interventions, such as the NATO-led war to stop the serves from potentially committing genocide in Bosnia, seem like contributions to development; other interventions are much harder to defend; and the rule used to distinguish between the two kinds should be mechanical, to limit bias—”objective,” if you will. It was Michael O’Hanlon who years ago suggested the presence-of-an-international-mandate criterion. (As mentioned, the Afghanistan war has such a mandate.) But even O’Hanlon argued for exceptions, at the time having Iraq in mind. The Security Council did not sanction the invasion of Iraq, but it did sanction post-invasion activities, so a strict implementation of the criterion would have rewarded the latter. O’Hanlon argued against rewarding the occupation of Iraq since it was so thoroughly motivated by national security rationales, not ‘commitment to development.’”

Private police
The Sydney Morning Herald reports that Indonesian police have admitted to receiving money from US mining giant Freeport-McMoRan to protect the world’s most profitable gold and copper mine in the face of labour unrest.
“Accusing the workers of ‘anarchy’ and threatening a national asset, local police chief Deny Edward Siregar warned the police would take ‘stern action’ if the site of the picket line wasn’t moved by today. Union officials responded by saying they were going nowhere, setting the scene for possibly more violence.
Police spokesman Wachyono defined the foreshadowed ‘stern action’ as ‘opening further negotiations with union management’. However, five striking workers have already been shot dead by police, raising accusations of a heavy-handed and hostile attitude of security personnel towards workers exercising their legal rights to industrial action.
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‘How can they enforce the law [impartially] if they receive bribes?’ said Samsul Alam Agus, [human rights group] Kontras deputy co-ordinator.”

Private soldiers
The UN News Centre reports that an expert panel is calling for the regulation of the “ever expanding” activities of private military and security companies.
“‘And it is not just governments who take advantage of their services, but also NGOs [non-governmental organizations], private companies and the United Nations,” [Faiza Patel, the current head of the Working Group on the use of mercenaries] added.
For the Working Group, ‘the potential impact of the widespread activities of private military and security companies on human rights means that they cannot be allowed to continue to operate without adequate regulation and mechanisms to ensure accountability.’”

Record deportations
The Inter Press Service reports on the increasingly hostile environment for immigrants in the US, where a million people have been deported since the start of Barack Obama’s presidency.
“The Alabama law [House Bill 56], passed by the state legislature in June 2011, is described as one of the country’s harshest anti-immigrant bills. It requires that police demand identity documents of anyone who they have “reasonable suspicion” to believe is in the country unlawfully, and requires public schools to determine the immigration status of primary and secondary school students, while authorising school officials to report children or parents who may be in the country illegally.
It also establishes penalties, even jail time, for people who hire, rent to or even assist undocumented immigrants, by giving a ride to a neighbour, for instance.”

Toothless watchdog
The CBC reports on the record to date of Canada’s mining watchdog, a position which one critic has described as “a bogus PR job, as a cover for business as usual.”
“In October 2009, the federal government appointed a corporate social responsibility counsellor to probe complaints about Canadian companies committing abuses in developing countries.
The Toronto-based office, however, has only received two complaints in the past two years — one of which was recently dropped because the mining corporation chose not to undergo the voluntary investigation.”

Super companies
Oxfam’s Duncan Green blogs about a new scientific analysis of 43,000 transnational corporations that suggests a group of 147 interconnected companies was “able to control 40 per cent of the entire network.”
“The idea that a few bankers control a large chunk of the global economy might not seem like news to New York’s Occupy Wall Street movement and protesters elsewhere. But the study, by a trio of complex systems theorists at the Swiss Federal Institute of Technology in Zurich, is the first to go beyond ideology to empirically identify such a network of power. It combines the mathematics long used to model natural systems with comprehensive corporate data to map ownership among the world’s transnational corporations (TNCs).”

Global tax rules
ActionAid’s Martin Hearson calls on the G20 to deal with tax havens which cost poor countries three times as much in lost tax revenues as they receive through international assistance.
“ActionAid’s report, Calling Time: Why SABMiller should stop dodging taxes in Africa, demonstrated how one multinational beer company shifts £100 million of profits per year – the taxes on which could educate 250,000 children – out of Africa and into the tax havens of Mauritius, Switzerland and the Netherlands. Capacity building in African tax authorities is important, but without more fundamental reforms to increase transparency and change global tax rules, it will never be enough to prevent this kind of tax dodging.”

Helpful aid
Former Nigerian president Olusegun Obasanjo has called on G20 leaders to help Africa improve its infrastructure while making it clear not all assistance is necessarily helpful.
“The pressure is on how to translate the plan into purposeful action for November and avoid the pitfalls of past efforts – including short-term thinking, destabilizing capital surges, and carbon-heavy construction. Success will be measured by the amount of capital generated, and the number of projects realized, as well as by the extent to which G20 activities complement and synergize existing efforts without supplanting or fragmenting them.”

Latest Developments, October 19

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The truth about tax agreements
The Tax Justice Network writes that the Cayman News Service “has blown the lid on one of the biggest lies of recent years about tax havens/secrecy jurisdiction” that tax information exchange agreements (TIEAs) bring transparency to tax havens.
“On the face of them TIEAs appeared “fearsome” with one tax authority forcing another to disclose information on foreign nationals, [Mourant Ozannes’s Robert] Shepherd noted, but actually there was a good deal that trust professionals could do to protect beneficiaries and honour obligations of confidentiality, citing a number of hoops that tax authorities needed to go through to extract information. For example, the onshore authority must initially identify the tax payer in question about whom they require the information and equally they must have exhausted all local powers to gain information first.
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Ziva Robertson from Withers said that there was a big difference between the political will to be seen to be creating TIEAs and the actual economic effect of their implementation.”

Inclusive growth and inequality
The International Monetary Fund’s new economic outlook for Sub-Saharan Africa predicts continued high growth for the region and disputes the apparent disconnect between growth and poverty reduction, while conceding that inequality is rising.
“First, for the region as a whole, the link between poverty and growth is generally weak. But this relationship is considerably stronger for the region’s high-growth countries.
Second, there is evidence of growth having been fairly inclusive in the region’s high-growth countries. We find, for example, that the lowest quartile in three out of the four case studies (Ghana, Tanzania, Uganda) has enjoyed fairly high increases in consumption. But there are signs that in many of these countries higher-income households have enjoyed still higher growth in consumption. This implies some increase in inequality, broadly in line with patterns observed in a number of high-growth Asian countries.”

Malaria vaccine agnosticism
New York University’s Karen Grépin urges caution over the news of a possible malaria vaccine that set off so much excitement earlier this week.
“But as a public health professional, I just don’t think that enough new evidence has been presented for us to think that we found a “game changer” when it comes to malaria prevention and control. The real question, at least in my mind, that is relevant in this discussion is: does this vaccine provide any real lasting immunological protection in the target populations? The interim study was not set up to address this question. The actual full study was but, and I am not entirely sure why, the interim results were published anyway years before the real results of this study are going to be known. I am not the only one who questions the merits of this approach, in the accompanying editorial in the [New England Journal of Medicine] by Nicolas Witte, a true expert in this area, said “there does not seem to be a clear scientific reason why this trial has been reported with less than half the efficacy results available”. But of course we all know it is not always just science that drives most scientific discussions.”

GM food politics
IRIN reports on the ongoing debate over genetically modified food in Africa which finds itself in the middle of an ideological and commercial rivalry between the US and EU.
“A deep mistrust also prevails in Africa, given the fact that two power blocs – the EU and the USA remain divided over GM.
Only one strain of GM maize, Monsanto 810, and one modified potato, have been approved in the EU, and most countries grow neither commercially. Spain accounts for about 80 percent of GMO grown in the EU in terms of land under cultivation, but Austria, France, Greece, Hungary, Germany and Luxembourg have banned all GMO cultivation.
On the other hand, in the USA, where 70 percent of maize is GM, GM food need not be labelled. Some food experts say both the EU and the USA have vested interests in promoting their respective views in Africa, which is seen as a potential market and supplier of either GM or non-GM products.”

Occidentalism
The Overseas Development Institute’s Jonathan Glennie questions the common claim that poor countries will suffer too unless Europe recovers quickly from its current economic crisis.
“But growth in some parts of the world and not others is just as plausible as growth all over the place. Plenty of economists view the rapid growth of Europe and the US in the past two centuries as a cause of impoverishment in other countries, rather than an unrelated consequence of sound economic management and hard work.
While income per capita has grown rapidly in the rich world for the past three decades, from about $14,000 (constant 2000) to about $26,000, it declined in sub-Saharan Africa (from $571 to $507) and stagnated in all low-income countries (at around $240) until things started to get marginally better in the first decade of this century. It is simply not the case that western prosperity is necessarily associated with prosperity elsewhere.”

Commodity bonds
Harvard University’s Jeffrey Frankel argues poor countries that depend heavily on resource exports are vulnerable to market volatility and could benefit from issuing commodity bonds rather than borrowing in dollars.
“The advantage of such bonds is that in the event of a decline in the world price of the underlying commodity, the debt-to-export ratio need not rise. The cost of debt service adjusts automatically, without the severe disruption that results from loss of confidence, crisis, debt restructuring, and so forth.”

Millennium Villages Project transparency
The Center for Global Development’s Michael Clemens and the World Bank’s Gabriel Demombynes argue that the Millennium Villages Project uses evaluation methods that make it impossible to judge whether or not it is having the desired (and claimed) results.
“A critical element of persuasive impact evaluation is that it is independent and transparent. An independent and transparent analysis of its data could make the MVP evaluation more persuasive. The MVP has told us, however, that it will only consider making data available to outside researchers after it has completed publishing all of its work on data collected through 2016. This suggests the MVP will not share any of the data it has collected until roughly 2020, 15 years after the project began.”

Apples to apples
Oxfam’s Duncan Green has posted a World Bank list of the world’s 100 largest economies, which includes countries, companies and cities, thereby prompting a number of apples-to-oranges comments and a subsequent update to the original post.
“Fascinating comment from [the Bretton Woods Project’s] Peter Chowla, pointing out that a better comparison is between government tax revenue and corporate revenue, and when he crunched the numbers (he didn’t include cities), he got only 29 countries in the top 100 – the rest were corporates.”

Latest Developments, October 14

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Responding to Occupy Wall Street
The University of Manitoba’s Hari Bapuji and the University of Massachusetts’s Suhaib Riaz examine the nature of the Occupy Wall Street protests and advise US business leaders on how best to respond.
“So if Occupy Wall Street is leaderless and unfocused, why isn’t it going away? The persistence of the ‘occupations’ is a signal that there is authentic, deep-seated unhappiness with the failings of the U.S. economic system. It’s an indicator that economic inequality is perceived as an important issue — one requiring business’s immediate attention.
The demonstrators are asserting that they are stakeholders in American business, and they’re correct — they are stakeholders, as consumers, as employees, and as citizens affected by the financial system in general. Businesses would do well to accept that fact and engage with the protesters, rather than trying to demonize or dismiss them.”

Constructive criticism
The Globe and Mail reports Mark Carney, the governor of Canada’s central bank and a potential chairman of the Financial Stability Board tasked with reforming international banking rules, has called the Occupy Wall Street and related protests “entirely constructive.”
“In a television interview, Mr. Carney acknowledged that the movement is an understandable product of the ‘increase in inequality’ – particularly in the United States – that started with globalization and was thrust into sharp relief by the worst downturn since the Great Depression, which hit the less well-educated and blue-collar segments of the population hardest.”

International media bias
The Institute for Security Studies’ Arthur Chatora accuses the international media of uneven and perhaps agenda-driven coverage of human rights abuses in the Libyan conflict.
“This biased media coverage raises questions about the credibility of media organisations and their agenda. Is it because the presence of widespread evidence of racially motivated human rights abuses committed by the TNC forces raises moral and ethical questions that challenge the validity of the notion of a “humanitarian war”? The responsibility assumed by NATO and the TNC forces to protect civilian lives from abuse by Gaddafi forces is also questionable, as it appears this mandate does not seem to extend to the protection of black Libyans and African immigrants.”

International legal bias
The International Institute for Environment and Development’s Lorenzo Cotula argues the current international legal regime encourages land grabs in Africa.
“National and international legal developments have strengthened the protection of companies against adverse action by the host government. But much less progress has been made to strengthen the rights of local people. As a result, the ‘shadow’ that the law casts on interactions between large companies and local villagers presents different shades of grey: those already benefiting from greater access to capital, expertise and influence also enjoy stronger rights.”

Tax agreement inequality
swissinfo.ch reports that not everyone is convinced Switzerland’s new tax agreement with India – one of 70 negotiated by the European country since its government pledged to reduce its famous banking secrecy in 2009 – is much more than window dressing.
“‘As seen by the recent cases of Germany and the United Kingdom, a good [double tax agreement] is not enough. These powerful neighbours have already negotiated new agreements which provide easier access to tax information. The Indian government got the maximum it could as an emerging market but influential industrial countries can get more information,’ [according to Alliance Sud’s Mark Herkenrath].
The Alliance Sud specialist said it would be extremely difficult for India to get the tax information it needs via a DTA and the Indian government would have to request an additional agreement for a withholding tax and special information disclosure clauses.”

Intellectual property vs access to medicines
Daniele Dionisio, a member of the European Parliament Working Group on Innovation, Access to Medicines and Poverty-Related Diseases, voices concern about a new plan introduced by the US during last month’s Trans-Pacific Partnership negotiations.
“Taken together, the non-transparent dynamics bound up with TEAM [Trade Enhancing Access to Medicines] compound fear that this initiative would be something that backs big pharma rather than making headway on non-discriminatory access to medicines in developing countries. This is particularly worrying owing to the fact that TEAM will probably play as the basis for future agreements between the US and other developing and developed countries. This concern seemingly harmonizes with a swipe taken by the US rep on 14 September at the WTO trade policy review of India, maintaining that India’s IP trade policy is out of sync with international best practices.”

The business of corruption
ECONorthwest’s Ann Hollingshead uses some real-world examples to take on the US Chamber of Commerce’s contention that the Foreign Corrupt Practices Act is a threat to American business.
“Has an American company never lost a contract in the history of the FCPA because its officers were not allowed to bribe? No. But does the FCPA provide a systematic impediment to American business competitiveness abroad? No. When an American businessman refuses to pay a bribe, it doesn’t mean the official necessarily goes looking elsewhere. As in Mexico, often the FCPA allows for a shift in the business dynamics, changing the playing field for everyone involved. Moreover, as the Argentine case shows, many businesses welcome this assurance and can use it to their benefit.”

Race to the bottom
The Economist looks at the growing movement against tax havens and the relative ineffectiveness of regulations to this point in stopping the race to the bottom.
“One avenue for reform is to place a greater duty on companies to explain what profits they make where. That would help prevent the worst abuses of transfer pricing scams, in which tax havens play a handy role. The muddled Dodd-Frank reforms, passed by Congress in America and now being implemented by regulators, supposedly go some way towards this; so does legislation being drafted in the EU.”