Trillions grifted in global shifts
Research by the Tax Justice Network shows over $12 trillion has been siphoned out of emerging economies into the shadowy world of offshore finance.
Columbia University Professor James S Henry carried out the analysis over the course of 18 months on behalf of the Tax Justice Network.
Professor Henry says the Panama Papers reveal the mechanisms by which the rich, corrupt and powerful exploit emerging economies.
“We're seeing an enormous amount of capital flight out of places like China in the last 18 months, more than a trillion moving out,” Professor Henry told the ABC.
“Russia has been a big contributor. Even since the 2014 period that these numbers refer to, there's been a tremendous increase so that Russia now sits on more than $1.3 trillion.
The report says that global wealth stored offshore has increased from $9 trillion in 2010 to about $12.1 trillion in 2014.
The richest 30 countries account for about 94 per cent of the money leaving emerging nations, “with authoritarian regimes or kleptocracies accounting for at least 80 per cent of it”, Professor Henry said.
“I think it's up to the enablers, you know the kleptocrats are seeking places with the rule of law and independent courts to protect their assets,” he said.
“It's really up to OECD countries like Australia, the United States, Canada, the UK, the EU and of course Switzerland is a big recipient of a lot of this money, so it's really the rich countries of the world that have an opportunity to take charge of this.”
Professor Henry said the release of the Panama Papers would shed more light.
“So far it's been used by the ICIJ consortium of, you know, about 370 journalist have had access just to the data for a year ago or so; now it's going to be opened up,” he said.
“And I think that will be very valuable because there's a lot of new kind of analysis to be done.
“As good as the journalists are, you know, they're just not as familiar with all of the intricacies is the 214,000 companies that were involved here.
“If one Panamanian law firm with just 500 employers, $42 million of revenue can produce this kind of information, you know, think of what revelations about many of the other players in the world including some of the top banks would show.”