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  • Economist Joseph Stiglitz speaks at the 2016 IMF World Bank Spring Meeting in Washington April 17, 2016.

    Economist Joseph Stiglitz speaks at the 2016 IMF World Bank Spring Meeting in Washington April 17, 2016. | Photo: Reuters

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The departure of Joseph Stiglitz, a Nobel Prize-winning economist, is set to undermine the credibility of Panama's efforts to address tax havens.

Nobel Prize-winning economist Joseph Stiglitz quit a committee set up to investigate the alleged lack of transparency in Panama's financial system, Reuters reported Friday.

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Stiglitz and Swiss anti-corruption expert Mark Pieth joined a seven-member commission tasked with probing Panama's notoriously opaque financial system, but they say the government of President Juan Carlos Varela reneged on a commitment to make the final report public.

"I thought the government was more committed, but obviously they're not," Stiglitz told Reuters. "It's amazing how they tried to undermine us."

The Panamanian government defended the committee's "autonomous" management in a statement issued later on Friday, and while it said it regretted the resignations of Stiglitz and Pieth, it chalked them up to unspecified "internal differences."

The committee was set up in April after after a leak of more than 11.5 million documents from the Panamanian law firm Mossack Fonseca, dubbed the "Panama Papers," detailed financial information from offshore accounts and potential tax evasion by the rich and powerful.

The independent commission was tasked with reviewing the country's financial and legal practices, both Stiglitz and Pieth said the government had committed to make the public report public, whatever its findings.

But they said they got a letter from the government last week backing off from its commitment to making the committee's finding public.

"We can only infer that the government is facing pressure from those who are making profits from the current non-transparent financial system in Panama," Stiglitz said.

Commission member Alberto Aleman, former administrator of the Panama Canal, rejected assertions that the committee lacked transparency, and said the five remaining members, four of which are Panamanian, would continue their work.

The departure of Stiglitz and Pieth is sure to undermine the commission's stated aim of cleaning up Panama's lax financial laws.

Frustrated by a lack of progress on tax havens, other countries are pursuing novel attempts at minimizing their use. 

Ecuador has recently set out to tackle tax havens, leading an international campaign to address the issue and taking measures domestically to rein in their use.

President Rafael Correa is seeking a mandate from the Ecuadorean people that would prevent politicians and public servants who store their money in offshore tax havens from holding public office.

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Ecuadorean Foreign Minister Guillaume Long suggested that recent U.S. Department of State report criticizing the South American country's fiscal transparency was an effort to disparage Ecuador and its effort to tackle tax havens.

“It is no coincidence that, now that we are in a global crusade for ethical pact, some badly intentioned countries want to take away our credibility,” said Long last month.

Besides stripping countries of critical tax revenue, tax havens are accused of being used for money laundering, arms and drug deals.

"I have had a close look at the so called Panama Papers, and I must admit that even as an expert on economic and organized crime, I was amazed to see so much of what we talk about in theory was confirmed in practice," Pieth said in a telephone interview.

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