OPINION: The Panama Papers — A Global Report Card

Photo credit: Kristin Palitza/IPS

By Maddie Felts
IPS Guest Writer

On Sunday, 3 April, the International Consortium of Investigative Journalists released an unprecedented leak of documents, exposing the secretive financial dealings of some of the world’s richest and most powerful.

Few countries are safe from the findings; twelve current or former heads of state are implicated among 143 politicians, their relatives and associates for using offshore tax havens.

The Panama Papers have revealed the real victims in our global financial system, and they aren’t the prime minister’s buddies. Economic inequality continues to undermine progress and social cohesion.

Oxfam calculated that in 2015, a mere 62 individuals held as much wealth as the world’s poorest 3.6 billion people.

To combat income inequality, the World Economic Forum has identified solutions including improved education, reformed tax policies, redistribution, social welfare policies, and workforce development.

These solutions are very much attainable and increasingly crucial to billions worldwide.

To bridge the dichotomy between the haves and have-nots, the global elite must settle some long-overdue debts to society.

The Tax Justice Network estimates that the world’s richest hold between 21 and 32 trillion dollars of untaxed assets. The startling extent of world leaders involved in the Panama Papers leak reflects the scope of corruption in national and local governments.

These trillions of dollars stolen by politicians or shielded from taxation (or sometimes both) mean less funding for roads, schools, and public healthcare. Not only are the rich becoming richer; the poor also remain systematically oppressed.

When the state cannot or will not provide basic needs to its most vulnerable populations, crime can flourish.

Criminal groups serve as the primary provider of social services and therefore become so deeply entrenched in communities that they earn the trust of the people and infiltrate local government.

Underpaid government officials are more easily lured into corruption since their underfunded state cannot provide what bribery can.

The World Bank estimates over $1 trillion are paid in bribes each year. We can no longer afford to ignore corruption that makes up an estimated 5% of annual GDP – roughly $2.6 trillion, almost twenty times greater than the $134.8 billion spent on official development assistance.

The audience reading this article may not consist of the 62 richest of the rich, but access to an education, the Internet, and free press is more than billions of people will ever receive.

We must acknowledge and defend journalism that can expose gross injustice and inequality. We cannot take for granted the freedoms and opportunities available to us.

And we must fight for what we all do not yet have but deserve, beginning with “honesty, transparency and integrity from our leaders,” which compelled Birgitta Jónsdóttir, a protester in Iceland, to call for change.

Jónsdóttir is not alone in her discontent. Protests continue in Iceland, even after the Prime Minister stepped down two days after the Papers revealed his involvement in offshore investment with claims on Iceland’s failed banks.

South Africans continue to protest the dealings of their political leaders and their families – and now that the leak revealed Jacob Zuma’s nephew’s involvement in oil contracts in the Democratic Republic of Congo, the protests will likely continue.

Those who hold the freedom to peaceful protest must fight for transparency for the billions whose voices are not heard.

A political event characterized by discontent, the upcoming United States presidential election should be viewed from a new perspective informed by the Panama Papers.

Candidates have sought to distance themselves from Washington and its institutional entanglements. Voters must begin to demand that candidates distance themselves from dubious campaign financing.

The United States campaign finance system provides loopholes in which corporations and foundations can hide millions of dollars, not completely unlike the offshore tax systems that hide billions of dollars for political and business leaders worldwide.

Even in a nation as wealthy as the United States, 15% of the population lives below the poverty line. The cost of social services that are often called unfeasible seem small in the face of the trillions of dollars tucked away through tax evasion.

Though no American politician has yet been implicated in the Panama Papers, at the least, the leak provides a much-needed lens to voters as they re-evaluate the American economic and political system.

For those of us without a billion dollars in our pocket, we hold a priceless tool: our voices. We must speak out, through the press and through the electoral process, to ensure transparency in our governments.

The Panama Papers serve as a global report card, and far too many of our political leaders and institutions are failing.

Let this information inspire us all to relentlessly advocate for just and transparent political processes everywhere.