Assessing Pandora Papers

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”The secret wealth and dealings of world leaders, politicians and billionaires has been exposed in one of the biggest leaks of financial documents.” (BBC, 3rd October 2021)

Pandora papers have shown to the world the dirty laundry of the rich once again — this is the latest exposure in the last seven years after FinCen Files, the Paradise Papers, the Panama Papers and LuxLeaks.

I have not documented the previous cases but I am presenting my analysis of this one because I think this one is important for several reasons.

What are the numbers of this case?

There are almost 12 million leaked documents consisting of 2.94 terabytes of data.

There are almost 3 million images, more than a million emails and almost half a million spread sheets.

The Pandora Papers is based on 14 providers.

Nearly 29,000 offshore accounts are involved.

Amongst the exposed are more than 130 people who are listed as billionaires by Forbes magazine.

What makes the Pandora Papers different from other similar leaks in the past?

This time more than 300 politicians and heads of state are in the leak—some active in the present others who served in the past. According to the Guardian at least 35 world leaders are involved in this financial scandal.

An interesting case is where the alleged mother of Putin’s secret child became really rich very quickly just after giving birth to the President’s child. This Russian woman who grew up in poverty bought an apartment in Monaco in 2003 for about $4.1 million. The Washington Post published an entire article on this case recently.

Andrej Babiš the Prime Minister of Czechoslovakia bought a $22 million chateau in the South of France.

King Abdullah of Jordan is reported to have properties worth more than a $100 million (£70 million) all around the world.

The President of Kenya Uhuru Kenyatta and his family have been linked to 13 offshore companies.

What are the implications of this latest leak?

This adds more political pressure on powerful people and makes them vulnerable to political, legal and even physical attack. Poverty-stricken individuals who are being sanctioned and punished by society for being poor are shocked at the hypocrisy of the ease with which senior politicians talk about hard-work, honesty and trustworthiness to the public and oppose the very same principles by hiding their ill-gotten gains in a web of shady legal jurisdictions in offshore accounts.

In the long-term I find it hard to see how this leak could lead to a strategic shift in the system that allows this financial manipulation in the first place but the exposure makes some people more aware of this than the economic elite would like—particularly those who read regularly about business affairs. And this could be the beginning of a seismic change—the probability of a major shift is certainly non-zero and could be a high one.

It exposes the hypocrisy of those politicians who have always promoted the concept of ”austerity” whilst increasing their incomes, net-worth and building powerful business connections. And their utter disdain for the poor and the unfortunate of society.

I do believe in moral accountability, fiscal discipline and abiding by the law both in spirit and the letter. Therefore, I have no option but to claim that we need a more rational management of the economic resources so the greater good receives an economic boost amidst this corruption and hypocrisy.

Conclusion

The narrative stemming from Pandora Papers is the usual ‘rich=corrupt’ thesis long promoted by the left-wing media. Unfortunately, this time it is true and presents a far from positive picture of the economic elite. The global business community must reduce fears amongst the public that they do not deliberately break the letter or spirit of the law to support dictatorial regimes and other unsavory characters just to close deals and collect commissions.

The law is not only for the poorest of people but everyone including the ultrarich and the super-successful. If this is not done the anti-capitalism sentiment will surely grow stronger leading to a tsunami of legislation and regulations that will stifle growth and destroy profits both in the short-term and the long-term.

The implications of the Pandora Papers can be easily understood that the law was broken in spirit if not in letter and this conclusion with the wider income-inequality and wealth-gap between the rich and the poor will have devastating consequences for business at least in terms of the public relations.

A contributed article by Zalghi Khan