Daily Times

We, the honest, hardworking, law-abiding taxpayers of South Asia, are hopping mad! From our Indian Ocean of poverty, our monies are being siphoned off to ‘prosperous island’ tax havens like the Caymans. The culprits are ‘welfare-minded’ politicians and bureaucrats who take their cut even as they are palming out generous budgetary allocations at our cost. Meanwhile, ‘selfish’ corporate giants and celebrities squirrel away, to shell companies, spoils ‘meant to take their countries forward’. It makes us mad! Sure! But if all of us could do it, wouldn’t we?

In the aftermath of Panama, ‘progressive’ pundits would have us believe that we workers, should march forth, ‘left foot forward’, and beat the tax havens down. Truth is they lie about being able to ‘retrieve’ our long-lost black money just to divert our attention from their hands in the cookie jar. We cannot bring back what they plundered using force or law as it has been laundered away into some squeaky clean, bargain of a fiscal paradise. But, we can attract it all back by becoming tax havens ourselves! Ivana Trump, while taking Donald Trump’s millions, famously said, “Don’t get mad. Get even! Likewise, our mantra should be, “Don’t get mad. Get Haven!”

Meanwhile in the EU and Scandinavian social[ist] democracies, so called ‘progressive’ propagandists brainwash and threaten us South Asians to perish the thought-crime of ever being tax havens. Patronisingly, they warn us we’d never be able to have their ‘advanced’ welfare states with ‘free education’ and ‘universal healthcare’. Cheeky! Could somebody remind them about that sovereign debt crisis looming over their swollen heads? Our sovereignty notwithstanding, they bully-bash us into submission with their sinister Financial Action Task Force, because slimming down our public sectors would enable us to beat their bloated welfare states to the smorgasbord of international investments.

In reality, the welfare state and NHS were set up by economists like John Maynard Keynes, and leaders like Clement Atlee to rehabilitate countries ravaged by the WWII, which left 17 million wounded. Living on a meagre $1.25/day, we cannot afford ‘comprehensive’ social nets, but neither can the high income EU who owes a whopping $20 trillion in external debt!

Politweak this week rejects the red tape of ‘tax hells’ for the red carpet of tax havens. Abandoning the protectionist psychology of necessity for entrepreneurial risk and abundance, the eight countries of South Asia are sorted based on World Bank data on business viability. They’re paired with their very own tax haven twins to help them reinvent themselves and re-imagine their biggest fiscally constituted conflicts.

#8 Afghanistan: is among the least attractive to investors due to the botched War on Terror, which destroyed its economy. However, its occupiers’ demolition of the Taliban government structures shockingly proves the claim of tax competition champions, that less government makes for more affordable corporate tax, which middle-sized companies are more than willing to pay. Afghanistan and its twin, the Latin tax haven of Antilles, together prove that it would be prudent to abandon the ‘War on Drugs’ altogether to increase political stability! Prohibition makes contraband the currency of conflict. This is because contraband becomes a valuable commodity for black markets, is profitably peddled by criminal entrepreneurs in violent cartels, and its profits drive money laundering. Thus, legalising drugs eliminates drug/war-lords who control lucrative black market monopolies, making state-building more peaceful.

#7 Bangladesh, #2 Nepal and #1 Bhutan: must learn from their twins Kaliningrad and Belarus to accept the limitations nature and geography place on developing certain key infrastructures, and instead capitalise on their strengths. Like Kaliningrad, Bangladesh has access to a vital seaport, but lacks the ability to electrify the houses of a third of its citizens. Akin to natural gas-endowed Belarus, Bhutan and Nepal enjoy ample hydropower generating capabilities in the Himalayas, but are landlocked, and wedged between rival power blocs (Russia-NATO and India-China) who dilute their sovereignty when tensions heighten. Like Kaliningrad, Bangladesh should trade the use of its ports to landlocked Nepal and Bhutan in return for the power imports it sorely needs. Deepening economic and diplomatic relations with similarly small members of NAM and SAARC can give more meaning to Bhutan and Nepal’s non-aligned statuses and make their sovereignty more substantive.

#6 Pakistan: has an aid-laden public sector up for grabs between its three conflicting J’s, the jaagirdars (landlords), jawaans (soldiers) and jamiaats (religious groups). The all out class war of each against the other, between the elite landlords in Pakistan’s main political parties, the middle class in the military, and the poor illiterate mis-interpreters of scripture, is perpetuated by the absence of a strong private sector and structural reform like land distribution. ‘Progressive liberal’ efforts to cap land ownership under Zulfikar Ali Bhutto failed. Pakistan may go a long way in depolarising the 3Js if it chooses to ‘dubizzle’ in real estate, like its tax haven triplets Dubai and the Bahamas. Land can be released from vast jagirdaari (land holdings) for economic utilisation by imposing a combination of a two percent yearly tax on unused commercially viable properties, and scrapping capital gains tax to make selling land a more profitable transaction. With any luck, an economically resurgent Pakistan will skill its human resources, and may even re-attract the 20 percent of its business class minorities who fled Zia-ul-Haq’s religious persecution to embrace its destiny as the prosperous, pluralistic and participatory democracy Mohammad Ali Jinnah envisioned.

#5 India: like its haven-twin Ireland provides loam for lore. Both former colonies of the taxing British Raj, their teeming creativity and mathematical genius make for some epic tax avoidance. Indians were probably the first cartographers of tax competition. Sadly, this is not for home consumption. FDI-suspicious governments bottleneck investment to India’s mini Silicon Valley and films are made on the funding of movies by Old Bombay’s smuggler-gangsters due to credit crunch. Even in the heart of Bollywood, the state holds its world-acclaimed artists to ransom by raising $150 million/year in entertainment tax. Little wonder then that Big B is served by Panama’s finest tax attorneys to maintain plausible deniability on where he sends his spare crores. Ireland, proud tax jurisdiction of Apple, can teach India the craft of converting all the foreign investment that can come its way into innovation and art, as there’s no limit to how much money good ideas can multiply without extracting too many material resources! Ireland knows better than to tax its artistes. Just like Leprechaun gold, their assets are difficult to find and impossible to take.

#4 Maldives and #3 Sri Lanka: are dream island destinations for tax havens, if only they knew how! Their two barriers to freedom are gargantuan public sectors and ethnic conflict over who gets to control them. Being the ‘right’ religion in the Maldives or speaking the ‘correct’ language in Sri Lanka confers the legitimacy to access resources concentrated in government undertakings. Being ethnically similar, with majority Sinhalese clashing with minority Tamils, they could learn from each other’s mistakes and aspire to Cyprus’ economic freedom and political devolution, which eased tensions between Greek and Turkish Cypriots. Concentrating resources in the private sector instead of the public sector converts identity conflict into meritocracy. The élan from successful entrepreneurship goes a long way in bridging Babel and making religion retreat into the private sphere where it belongs.

It is not difficult to see the difference between tax havens and the tax hells that we are forced to live in. One is about freedom, and the other is about fetters. What’s not to like about living in a system where taxes are low and cease to be an impediment to living free and living well? Goodbye socialism, here’s to having it all!