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CMU-A Holds Symposium on Tackling the Global Corruption Crisis

Posted 14th December 2016

​Professor Emil Bolongaita opened the symposium by declaring that “there is a global corruption crisis that’s being ignored by governments around the world which needs to be urgently addressed because it is sabotaging their economic reforms.” He presented the findings of his research on grand corruption at a recently conducted CMU-A Symposium on 2 December 2016.

Professor Emil Bolongaita opened the symposium by declaring that “there is a global corruption crisis that’s being ignored by governments around the world which needs to be urgently addressed because it is sabotaging their economic reforms.” He presented the findings of his research on grand corruption at a recently conducted CMU-A Symposium on 2 December 2016.


Professor Emil P. Bolongaita speaking at the Symposium

The symposium was organised by the Public Policy Program in observance of International Anti-Corruption Day declared by the UN General Assembly following the passage of the UN Convention against Corruption (UNCAC) in 2003.

Grand corruption is not just a problem of less developed countries, according to Prof Bolongaita. In fact, he asserted that “it is a problem caused in great part by institutions, policies and practices in advanced economies”.

“There is a global corruption crisis that’s being ignored by governments around the world which needs to be urgently addressed because it is sabotaging their economic reforms.”
     

Bolongaita specifically cited the role of tax havens and offshore providers that specialise in manufacturing imperfect information by creating secretive entities to hide assets and/or mask their beneficial owners from the authorities.

 These low or zero-tax jurisdictions operate opaquely and do not disclose information. He argued that these locations incentivise financial crimes such as corruption, tax evasion, money-laundering, and securities fraud.
 
Nowhere is this more evident than in the Panama Papers leak. Two groups of MSPPM students presented their case studies on Indonesia and the Philippines respectively.


MSPPM Indonesian Study Group - Simeng Huang, Harry Wardana and Kristin Carson

Conducted by Harry Wardana, Kristin Carson, and Simeng Huang, the Indonesia study found a number of former and current government officials in the Panama Papers database. Notably 78 of Indonesia’s Richest (Forbes 2015) are in the database as well.
 
With an estimated US$331 billion of Indonesian assets in tax havens, Indonesia has embarked on a tax amnesty program to flush out these undeclared funds. The students critiqued this as forgiving “free riders” who have not paid their fair share of taxes and who have transferred the social costs of their actions to ordinary citizens.
 
The Philippine study, conducted by Jonathan Teubner, Andy Maynard, Alexia Wynn, and Chuheng Yu, focused on the web of offshore entities associated with politically connected groups, notably the Marcos, Araneta and Angara families, as well as top Philippine businessmen.


MSPPM Philippine Study Group - Alexia Wynn, Jonathan Teubner and Andy Maynard

The students emphasised that while the available information in the database do not necessarily suggest criminality, the fact that these individuals have invested in these hidden mechanisms indicate they intended to hide the assets and the identity of their owners. Hence, the authorities should be conducting investigations on these individuals post-haste before they are able to move hidden assets elsewhere.

Prof. Bolongaita concluded the seminar with a number of recommendations that governments should consider, such as closing loopholes that allow citizens to have accounts in a non-cooperative country or that allow individuals or corporations to be a shareholder, director, or trustee of an entity in a non-cooperative country. In addition, major banks, which were shown by the Panama Papers to have been the initiators of offshore services for their clients, should not be allowed to have correspondence relationship or to interact with any financial institution in a non-cooperative country.

Watch the full Facebook Live recording of the Symposium

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