Vijay Mehta, author of The Economics of Killing: How the West Fuels War and Poverty in the Developing World (Pluto, 2012), has written a piece in Ceasefire this week where he argues that recent evidence from the Middle East corroborates the analysis he lays out in his book – that Western governments continue to be the best friends of dictators with money to hide.
Back in February, we were supposed to let out a collective cheer when European governments said they had “frozen” the assets of Hosni Mubarak, the toppled dictator of Egypt. Switzerland, Britain and other European states said that they had heeded calls from Egypt’s new leadership to seize the wealth Mubarak had hidden in their cities, and to return this money to Egyptian taxpayers.
The British “discovered” assets worth £85 million that Mubarak had hidden in London. These were then “frozen”. But what happened next was depressingly predictable … By September, a BBC investigation had discovered that many of Mubarak’s assets had not been frozen by the British, and that Britain was refusing to hand over the assets they had seized. Assem al-Gohary, head of Egypt’s Illicit Gains Authority, told the BBC that the UK “doesn’t want to make any effort at all to recover the money”. Having accepted Mubarak’s millions on a no-questions-asked basis, the British authorities were suddenly very sensitive to the legal status of the sums involved.
Mehta goes on to explore the nature of the West’s corruption, through a discussion of the process of asset freezing, and the tripartite purpose it serves:
The UK and other European governments make very little effort to deter foreign officials from hiding their shadowy fortunes in European bank accounts and real estate. The “freezing” of assets only takes place once a dictator is out of power, or about to be.
These “freezings” fulfil three purposes for European governments: they make them appear committed to freedom and transparency; they let the dictator’s replacements know that Europe is on “their side”; and they also let these replacements know that if they wish to stash their own ill-gotten assets overseas, Europe is there to help.
It should also be noted that Europe makes very little effort to prevent its companies from bribing these corrupt leaders to secure lucrative government contracts.
Mehta notes how, perhaps contrary to expectation, the US is by far the most stringent prosecutor of domestic corporate corruption – Jimmy Carter’s Foreign Corrupt Practices Act (FCPA), signed into effect in 1977 is a piece of powerful legislation that to this day punishes US companies who bribe their way through deals. Europe, by comparison, has managed to prosecute almost no-one over corruption, despite its burgeoning (and notoriously kick-back lubricated) arms industry: just nine individuals and two companies have been held to account for foreign bribary in the combined legal territories of Sweden, France and the UK. In other words, as Mehta succinctly puts it, ‘the West is not just hiding the money of dictatorships – it is paying it to them.’
In examining the complicity of the West in civil war – a position that follows naturally on from its moral and legal flexibility – Mehta writes:
This approach makes Western governments directly complicit in the kind of civil war now racking Syria. As a dictatorship becomes more corrupt, it becomes less likely to hand over power peacefully. A leader who has ruled honestly does not stand to lose a vast fortune if he steps aside, or to be prosecuted for embezzlement. Indeed, he or she may even benefit financially- the Mo Ibrahim Foundation offers a $5 million and a lifetime salary to former African leaders who governed responsibly.
Corrupt dictators have the opposite set of incentives. If they lose power, they lose everything. Syrian dictator Bashar al-Assad is a prime example of this trend. The UK has now “frozen” an astonishing £100 million linked to Assad and his clique.
Some estimates put Assad’s fortune at almost £1 billion, distributed across a variety of money-laundering centres aside from the UK. However, if he loses power in the revolution, his replacements are certain to demand this money back.
It is therefore little wonder that Assad, like Libya’s Muammar Gaddafi, has refused to step down or to accept offers of exile to avert Syria’s increasingly bloody civil war. Charges of grand corruption and money laundering will follow him wherever he goes.
What reason, then, does he have to fear prosecution for war crimes? In any scenario, the result is likely to be a long prison term, or worse. The best Assad can hope for is impoverished exile. Had Europe not made it quite so easy for Syria’s dictator and his friends to stash their assets, he would not now be clinging so tenaciously to power.
To read more of Mehta’s article, go to Ceasefire by following this link. While you’re there, why not check out more of their great content.
How the West Fuels War and Poverty in the Developing World
Shows how Western governments are trapping the developing world in a cycle of violence and poverty.
“We live in a rich world and yet increasingly people are getting caught in the poverty trap and facing real hardship and pain. Vijay Mehta’s excellent book sets out the problems and solutions, and challenges us all to create the spiritual and political will to implement policies which will bring about real change and give hope to humanity.” – Mairead Maguire, Irish peace activist and Nobel Peace Prize winner.
“The Economics of Killing brilliantly links the deepening economic crisis facing the West with the dynamics of militarism that is wreaking havoc on the planet. Everyone who cares about the future must read this groundbreaking book.” – Richard Falk, United Nations Special Rapporteur on Human Rights for the Palestinian Territories, Professor Emeritus of International Law at Princeton University, USA