The Changing Nature of the Offshore Financial Industry


The growth of communication technology has virtually eliminated boundaries developing an economy enabling financial flows access to markets in every areas of earth.This has allowed the spread of world wide transactions stimulating creation and growth along many regions of the market.

The movement toward globalization is turning out to be more authoritarian, moving from a hands-off liberalized variation, to something entirely self-serving, governed and manipulated by the economic elites, multinational companies (MNC), and state authorities driven by their own narrow agendas and policies that are then preached to the remaining portions of the world.

Western Financial Institutions Versus the World

Global transactional forces are being manipulated through intimidation tactics largely coming form the US and the EU, forcing smaller countries to adopt banking and corporate regulations that serve them.

The risks of labeling one form of competition unsafe and another just is a dangerous precedence that tarnishes the idea of economic liberalization. It goes away from an open border form of globalization and becomes more like a fascist world arrangement of masters vs people.

Many such countries in attempts to claim potential taxable income, have used regulatory bodies such as the U.S. Government, EU, OECD, and FATF to ensure their authority remains intact. While it is unquestionably apparent that worlds market require polices to curb illicit capital, though it must be done in collaboration with those its rules against rather than assume authorities powers.

These polices are weaponized so that economic hegemony remains firmly within the hands of developed nations which is maintained by exploiting the disequilibrium that is inherent in the worlds economic order.

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The OECD for example feels that taxation competition as detrimental to the global economic order, which they argue is a form of civil-disobedience.

Many Offshore Financial Centers (OFC) are colonies whose development has been significantly curtailed by continuous exploitation by the imperialistic legacy of the past, most are left with little recourse but to seek out some form of comparative advantage in an otherwise rigged economic system.

Emerging markets have been especially hit, which has severely threatened their economy as many countries rely on forming companies offshore as it generates a significant portion of their GDP.

Global Hegemony

Intimidation tactics along with economic blacklisting are used against small tax havens that do not accept the new laws and supervisory institutions established. In order to attract foreign capital, many markets offer entities and taxation benefits to attract investments.

Much like many western countries, attempting to pull investors by giving economic advantages to organizations seeking to establish themselves; emerging market have sought to create a financial environment to attract the same investors through tax breaks.

Western nations have been critical of these policies, as they argue that it has led to an outflow of capital seeking refuge in low tax climates. Be this as it many, this is just another part of the  natural movement of capital that it will seek and find rest in an environment if it enjoys a comparative advantage.

Any truly liberalized economic order allows global market forces and the fluidity of capital to create markets. Openness an essential quality of global finance is quickly losing its part in the global economy. The future will tell if this trend continues.

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The Solution?

In order for capital to move fluidly between countries and peoples there needs to be a mutually agreed upon structure whereby regulations are agreed upon by all parties. There runs the risk of seriously undermining state sovereignty and the liberal order if western institutions continue to serve their own interests at the expense of all else.

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