April 15, 2016
Information from the newly-released “Panama Papers” is hurting public trust, according to a top World Bank official.
Sri Mulyani Indrawati is the bank’s Managing Director. She warns the information may make everyday citizens less willing to pay taxes. She says this could reduce public money to pay for roads, schools or other government services.
Mulyani is calling on policymakers to cooperate by developing stronger laws.
The information came from documents stolen from a law firm in Panama. They show how wealthy people and government leaders around the world hide money and avoid paying taxes.
Sri Mulyani says the idea of unfairness damages public trust. She says it could also lower the amount of money governments collect and could hurt the economies of countries that need to grow.
She says that when everyday citizens learn that their leaders and the very rich have money in foreign banks, they ask why. And they ask if there is a good reason for people to move their money overseas or whether they are hiding something.
Tom Cardamone works at the research and advisory group Global Financial Integrity. He says the money sheltered in Panama represents a large part of the economy of some countries.
He says that more than a “trillion dollars in illicit money is siphoned out of developing countries every year. This is far more than all the foreign aid and all the foreign investment that goes into these countries every year.”
Sri Mulyani says that for real changes, countries will have to work closely together. “Without international cooperation, it is going to be very hard to actually chase this tax avoidance,” she said.
Mulyani notes that slower growth around the world is worsening economic pressures in many nations, especially in the 40 weakest.
She says work has begun to improve conditions so that businesses create more jobs, and governments can provide basic public services and rebuild social services in countries affected by conflict. She says many of these efforts involve programs to help young people learn job-related skills.
I’m Christopher Jones-Cruise.
Words in This Story
evade – v. to avoid doing (something required)
illicit – adj. not allowed by law; unlawful or illegal
siphon out of – expression to take and use (something, such as money) for your own purpose
according to – preposition as stated, reported or recorded by (someone or something)
law firm – n. a group of lawyers operating in the same office or offices; a business organization operated by lawyers
basic – adj. forming or relating to the most important part of something