Jorge Rolón Luna *
Today’s world is ruled by crooks and thieves; moreover, traffickers, pirates and smugglers are reshaping it according to their interests, affecting governments, violating societies and undermining democracies, argue Olivier Bullough and Moisés Naím in recent works. Regarding Olivier’s book (“Moneyland: Why Thieves and Cheats Control the World and How to Take It Back”), novelist John Le Carré has said: “Every politician and moneyman in the world should read it, but they won’t, because this book is actually about them“. And as Moisés Naím says (“Illicit: How smuggling, drug traffickers and piracy challenge the global economy”): “illicit business is first business, then it is illicit”.
The theses of these two authors go beyond an analysis of weak governments and primitive economies such as Paraguay’s, since in our country the illicit is not hidden. Let’s not forget that we are still agricultural and livestock farmers, as in pre-industrial societies. Recent events expose this, such as the implosion of a part of our notoriously criminal neo-bourgeoisie, very close to rulers and politicians, especially from the ANR, without any doubt, our ruling elites are of the worst lineage.
But the problem that these books address is global, deep and of the developed world, and this view should not be overlooked at any time to avoid deluding oneself. The war conflict unleashed a few days ago by Russia’s military attack on Ukraine gives clues to what we are saying. Since Russia is not Iraq, Libya, Syria or Palestine, the general abstention from military action against that country has only produced sanctions and threats of economic sanctions. British Prime Minister Boris Johnson, who allows himself to rest a bit from Scotland Yard investigations for his pandemic parties, has decided, in his words, to apply the largest sanctions in history to Russia, something that many doubt and even consider laughable. Well, the business that the City of London runs as part of its very essence would not allow it to go very far. “Londongrad” has been named such for being the favorite place for Russian “oligarchs” to launder their money (also for oligarchs from other places). As an Argentine journalist recalls, Nigerian anti-corruption official Isaiah Rada recently said that the UK is “the most notorious tax haven for illegal funds in the world”, while Italian journalist and mafia expert writer Roberto Saviano called the City of London “the most corrupt place on the planet“.
Nearby, a fact that was turning into a major scandal and that was appealing to qualify the Swiss banking system as high risk in terms of financial crimes and money laundering, went virtually unnoticed in Paraguay: “the Swiss Secrets“. A leak of documents from the Swiss bank Credit Suisse showed how this bank houses more than US$ 100 billion belonging to corrupt politicians and criminals from all over the world.
Again, we must ask ourselves, if this happens in traditional democracies, with a high degree of institutional development, what about us? Perhaps the difference lies in the fact that British or Swiss politicians rarely take pictures with drug traffickers or their parties recruit real crooks as the former congressman Ozorio, others who end up shot by their competitors in trafficking or characters of recognized criminal militancy that need not be mentioned (the list is very long). Around here, every day we see real lowlifes embracing with an important politician and businessman (more illegal than legal) in the mansion of the kiss of the ring or with a vice president who has no scruples when it comes to recruiting followers or associating with dirty donors for his campaign 24/7 – as if he no longer had any obligations to the position he still holds. Not to mention companies, banks, cooperatives, universities, sports clubs, that we see linked to these businesses and illegitimate money that we do not mention so as not to fall into the mere anecdotes.
The similarity is that dirty money oils both the structures of consolidated democracies and those of low-intensity or barely electoral democracies such as ours. Tax havens managed by powerful but not so modest countries allow the money from drug trafficking and all kinds of corruption to be cleansed and to be part of the system, increasing world trade. The line that divides legal businesses from illegal ones is getting thinner and thinner and we are also seeing this in our country, although it has been warned by academics for a long time: car dealerships, gymnasiums, cattle ranches, real estate ventures, are the favorite ones for laundering.
Although history records the first tax haven in the second century B.C., when the Romans rewarded the island of Delos for its loyalty as a tax-free place. It was not until the 19th century that the phenomenon began to take shape. And it was not on a remote island with a strange name, it was the American states of Delaware and New Jersey, which inaugurated the concept of “easy incorporation” (buy a “ready-made company” and have it “active” in 24 hours). Later, the British courts invented the concept of “virtual residences” (the basis of modern tax havens) and the Swiss put theirs in 1934 by incorporating banking secrecy in their Banking Act. Today, one of the most important tax heavens in the world is closely linked to the City of London, as historian Ronen Palan points out.
The process of financialization of capitalism that arrived in the 1990’s, spurred by neoliberalism, boosted the role of these havens as concealers of dirty assets resulting from tax evasion, theft of public funds, bribes, and the proceeds of large-scale criminal activities. The world of global finance is indisputably linked to the money generated by illegal activities – as the IMF itself recognizes – and this mutualism is therefore akin to the financial capitalism of these times.
In a context in which States are powerless against the forces of criminality and illegality, Paraguay is just one more link in this architecture, where we have the extreme violence of drug trafficking, unsustainable levels and forms of corruption, and supplying markets hungry for marijuana and cocaine. In all of this, the involvement of the state and vast sectors of the business community is not only notorious, but decisive. And this is not new, 12 years ago, Tomás Palau (+) pointed out among the real powers in our country the “narcos and the businessmen“.
Again, we must ask ourselves, if this happens in traditional democracies, with a high degree of institutional development, what about us? Perhaps the difference lies in the fact that British or Swiss politicians rarely take pictures with drug traffickers or their parties recruit real crooks as the former congressman Ozorio, others who end up shot by their competitors in trafficking or characters of recognized criminal militancy that need not be mentioned (the list is very long).
In the observed context, countries with a higher degree of political stability and stronger institutions, at most have lower levels of violence and corruption (or more sectorized) because they export it to the periphery. However, decades of obscene accumulation in very few hands have also generated extreme inequalities and dangerous violence, extremism and discontent in the developed world that require urgent responses.
In our case, from a cruel and corrupt dictatorship, we have done little to move to a minimal democracy with enjoyment of rights. And before a failed state, we have a bandit state; before a weak state, a weak rule of law.
Cover illustration: La Razón.es
* Lawyer, teacher, and researcher. Author of “A constitution under siege. The (bad) Constitutional Rule of Law in Paraguay”.