Tax havens 320,000 times wealthier than neighbours

The damaging impact of tax havens on poor countries was thrown into sharp relief by new figures published today ahead of the G7 Finance Ministers’ Meeting showing that Cayman Islanders are on paper 320,000 times wealthier than Nicaraguans.

Assets held in the Cayman Islands total an incredible $29.3 million for each of the 56,000 people on the island, according to calculations carried out by the Enough Food for Everyone IF campaign. This compares to the $91 dollars in assets for every citizen in Nicaragua, a country just 600 kilometres away.

The IF campaign said the figures exposed the ridiculous nature of a system that allows small islands to become havens for countless billions. It is urging the G8 to change the rules to prevent companies dodging the tax they owe to poor countries – money that could be used to feed millions of the 1 in 8 people in the world who will go hungry tonight. The campaign was today backed by Jeffrey Sachs, Director of Colombia University’s Earth Institute.

The Cayman Islands/Nicaragua example is only the most extreme uncovered by the campaign. For example, assets in Bermuda amount to $1.42m for each of its 65,000 residents. Nearby Haiti has just $18 per person making Bermudan citizens’ paper wealth almost 80,000 times greater than Haitians’.

The campaign – which demonstrated outside the Treasury yesterday - is calling on Chancellor George Osborne to lead the way by implementing a 90-day plan to clampdown on the UK’s own tax havens, such as the Cayman Islands – a move that would start to make good on David Cameron’s Davos pledge to protect poor countries from tax dodgers. One in five of the world’s havens are under UK jurisdiction.

Jeffrey Sachs, Director of Colombia University's Earth Institute, said:  "For decades developing countries have been on the receiving end of lectures about good governance, but it is the rich countries -- especially the UK, Switzerland, and the US -- that created the tax havens that cater to worldwide corruption, hot money, bank panics, secretive hedge funds, Ponzi schemes, and tax evasion.

“Four years after rich-country leaders promised an end to the tax havens, the scale of tax-have abuses only continues to multiply. The number of high-ranking politicians in the US and Europe recently shown to have hidden offshore accounts could fill a parade of shame.

“The poor world asks the rich: when will you start to walk the walk on true financial reform? Until that happens, the world economy will suffer from austerity and financial instability, while the rich flee to their islands of abuse.”

The IF campaign erected a pop-up boardroom containing a large inflatable elephant bearing the words ‘UK Tax Havens’ outside HM Treasury as a symbol of the Chancellor’s lack of action to date to address their effect on the world’s poorest people when G7 Finance Ministers meet tomorrow.

The UK last week announced a new information sharing deal with a handful of tax havens but this will benefit only the UK, France and Germany, Italy and Spain – poor countries were not party to the agreement.

Sol Oyuela, IF campaign spokesperson, said: “These figures expose the global system of tax havens as a sick joke. Who in their right mind would claim the Cayman Islander should be worth 320,000 times than a Nicaraguan?

“It can’t be right that UK tax havens are sitting on trillions of dollars, while their neighbours are struggling to ensure their people have enough to eat.

"The money that UK-linked tax havens suck out of the poorest economies will be the elephant in the room when finance ministers meet.”

World Vision is one of more than 180 organisations that form the IF campaign and are lobbying to make 2013 the beginning of the end of hunger.