Stealing Africa: Why Poverty?

In Ruschlikon, a sleepy village in Switzerland, the wealthy residents are receiving more tax revenue than they can use since the arrival of Ivan Glasberg, CEO of commodity giant Glencore. Yet in Zambia, where Glencore owns a majority stake in the country’s biggest copper mining operations, tax is an issue that’s contributing to its poverty…

Glasberg netted $9.6 billion when Glencore went public in 2011. The receipt of of his taxes overwhelmed the public coffers of Ruschlikon so much that the mayor decided to lower the town’s tax rate by 7%.

Not so fortunate for the residents of copper-rich Zambia – where Glencore owns a 73% stake in the Mopani Copper Mines (one of the biggest mining operations in the country).

Unfortunately, Zambia’s copper resources have not made the country rich. Virtually all Zambia’s copper mines are owned by corporations. In the last ten years, they’ve extracted copper worth $29 billion but Zambia is still ranked one of the twenty poorest countries in the world.

So why hasn’t copper wealth reduced poverty in Zambia yet made the residents of Ruschlikon better off? Once again it comes down to the issue of tax, or in Zambia’s case, tax avoidance and the use of tax havens.

In figures…

For every $1 given in aid to a poor country, $10 drains out. Vital money that could help a poor country pay for healthcare, schools, pensions and infrastructure.

Solutions

Below are some ways you can help solve these issues. Organizations dedicated to the issue of income inequality on a international level, and exploitation of rich-source rich, but poor nations. Refer to the 3 Pillars of Activism on more details on how to contribute. A lot of it concerns handling tax havens.

Sources

http://www.therules.org/

http://www.tackletaxhavens.com/

http://www.taxjustice.net/

Video Sources

http://www.whypoverty.net/video/stealing-africa/

http://video.pbs.org/video/2296675180/

http://www.bbc.co.uk/programmes/p010jx25

More reading

http://www.theguardian.com/global-development-professionals-network/2014/dec/04/live-qa-africa-natural-resources-benefit-all-citizens-mining-extractives

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