Kanan Jaswal's Blog on Leadership

Monday, February 2, 2009

Recover India’s stolen wealth from safe havens abroad

There are reasonable estimates that the funds Indian citizens have illegally stashed away in safe havens abroad, mostly in the Swiss banks, amount to a staggering US$1.41 trillion (about Rs.69 lac crore), which is one and a half times the country’s present gross domestic product. This is our money for which Indians have toiled for years but now it is out of our reach and is available only to the most corrupt, crooks and criminals, making those traitors to the nation and their generations to come obscenely super-rich. To some who would hold that the above figure is too high and unrealistic, I would only say that has a hitherto-unknown Pune-based swindler not been found last year to have more than US$8 billion (about Rs.39000 crore) in a single Swiss bank account? And he most certainly is not the biggest fish in India’s huge pond of corruption and criminality. The other group of beneficiaries, of course, of these funds of crime are the ‘venerable’ Swiss banks. These banks take a Cosa Nostra’s omerta-like oath of silence whenever there is a demand for disclosing the ownership or size of the funds involved.

But then it depends on how a demand is made on them to shed the cloak of secrecy. The Union Bank of Switzerland, the established leader among Swiss banks, has been recently reported to have, under pressure from the U.S. government, closed about 19000 accounts held with it by U.S. citizens without the required disclosure to the U.S. income tax authorities. UBS would now mail cheques to the account holders representing their account balances. The account holders could then either deposit the cheques into their accounts, creating an obvious accounting trail, or simply destroy the cheques and forfeit the amounts for good. Either way, they would be big losers.

As we all know the ruling cliques in India, for obvious reasons, would never create any pressure or even make a demand on the Swiss banks to reveal the details of all deposit accounts held with them by Indian passport holders, also of those in which Indian citizens have any beneficial interests. Pressure, in fact, first has to be applied on the so-called rulers of India to put pressure, in turn, on the Swiss banks and their home government. The Indian government must be made to use all legitimate means at its command and all international forums to create such a loud hue and cry on the subject that the Swiss government is compelled to get its banks to comply. India is supposedly having a strategic alliance with the United States, let the Indian government prevail over the U.S. to cooperate with it in its efforts to recover and retrieve India’s own funds, something of paramount strategic importance to the Indian state. Switzerland is a client state of the U.S. and has to listen to the latter most attentively.

For the last sixty one years whoever could, has looted India and the governments of the day have been a silent spectator, if not a ready accomplice. The crooked among politicians, businessmen, government officials in all branches of Indian state and professionals, mining and smuggling mafiosi, kidnappers and contract killers, false gurus and religious charlatans and many other denizens of the underworld have milked the country dry; they have also put substantial part of their loot out of the harm’s way, by squirreling it away mostly in Swiss banks but also in other safe havens like Cayman Island, Austria, Luxembourg, Jersey (U.K.), Singapore, Hong Kong and Dubai. The time has now come for not only to putting a stop to this but also to reversing this by recovering the country’s stolen funds by prising open secret deposit accounts with Swiss and other international banks. And all of us, who are not corrupt and who are not afraid to do the right thing in the interest of the country, have to understand and appreciate this and raise our collective voice so that even our ‘deaf’ government is forced to listen to it.

Finally, to carry out this great adventure and reach its desired objective the country would need a team of persons who have commitment, intelligence, guts and, above all, unimpeachable integrity, just like the famous “Untouchables”, who relentlessly pursued and finally nailed Al Capone, the biggest and the cruellest mafia don in the U.S. history. Everyone in India has to look inside and decide for ourselves whether we have in us what it tales to be such an “Untouchable”. Long live this “Untouchability”, because it carries in it the only hope India can have.


Anonymous said...

Hi Kanan,

Not really relevant to this post, but what does silverware signify here "Whoops! Your tongue is now a magnet. Whatever will you use for silverware? "


vaneet kundra said...

You are a prolific writer. Much better than me.

KrisDev said...

A recent article on 'A prescription to end corruption' for poverty alleviation is as below:

4Ps Business and Marketing Magazine - A Plan Media Publication, New Delhi, India.

Special Feature


A prescription to end corruption
Unique identification of every citizen will help kill the corruption malaise in developing economies

Kris Dev,
ICT & e-Gov Consultant, Manthan Awardee for e-Inclusion & Livelihood Creation

What ails the under developed and developing nations? Reply: corruption leading to self perpetuating poverty. Reason: lack of honesty & transparency. Result: lack of accountability for sustained growth. Economy is divided between rich & poor; the rich are growing richer and the poor are growing poorer. The poor cannot afford essentials such as food, clothing, shelter, health, education and social security. The division is so sharp between communities, while a rich family can afford to spend Euro500 per week on food items, a poor family of the same size can hardly spend Euro5 per week.

Does this mean all citizens living in a poor nation are poor? Well the answer is a 'NO'. The wealth in a under developed/developing nation is skewed. Almost 80-90% of the wealth of the nation is in the control of say 5-10% of the population. The majority of the population hardly has access to any wealth and live in abject poverty.

One of the biggest factors is 'Corruption.' It is the cancer eating into the vitals of the society. It has permeated into all facets of life, affecting the poor and voiceless. Today, the common man with no money or muscle power, cannot think of getting any thing done in the developing world, without having to pay bribe.

Global institutions such as World Bank, IMF, and UN must enjoy legitimacy from their member countries and the international community. They must be responsive, with the interests of all members, especially the smaller and poorer, being taken into account. The governance of these institutions must be flexible, must respond to new challenges, national priorities and specific circumstances.

A scathing report from the Independent Evaluation Office (IEO) of IMF highlights the lack of transparency and accountability in IMF. The IEO measured governance along four dimensions – effectiveness, efficiency, accountability and voice – and against three standards – the Fund's own governing documents, other international organisations, and private & public-sector corporations. The report finds accountability and voice are the weakest features of the Fund's governance and these weaknesses entail risks to the Fund's legitimacy, which in turn has a bearing on its effectiveness.

If this is the situation with global institutions, we can well imagine what would be the situation with national and regional institutions. No wonder they abound in corruption of all sorts and get away with it. Then, how do we get over this corruption mania? One sure way would be to plug all the leakages in the system. This cannot be done without active support of the governments and its citizens. A unique identification of every citizen is the primary requirement. With the advent of ICT tools, every citizen can be uniquely identified from birth to death using unique identification methods such as fingerprint, iris, hand vein geometry and DNA linked to their ID, name, photo, etc.

A Multi Purpose Biometric Smart Card for every individual and organisation linked to a money account and a e-Tool to link every citizen and service provider/public authority including the vertical and horizontal hierarchy of governance can be used as a single window of transactions for G2C, G2G, B2B, B2C, etc. If the transactions are thrown open, then total transparency and accountability can prevail, as envisaged in the Right to Information Act.

Healthy citizenry can be created by covering all aspects of citizens from birth to death such as health, hygiene, housing, education, employment, expenses, consumption, savings, social security, et al, based on genuine physical transactions and not ghost transactions. Thus corruption, money laundering, arms trade and terrorism can be eliminated and all round peace and prosperity can prevail as every one would feel good that no one can cheat any one and all have equitable opportunities to contribute and grow.