In the Bahamian capital Nassau, plump American tourists shoot craps against a background of sculptures and murals of mythical beasts.
'In the zone, Jack,' comes the shout from the Atlantis resort, as dice fly from hands to table. The scene plays to a glamorous image of the Bahamas that fades quickly outside the casino's doors. In the streets behind shops selling Colombian emeralds and other exotica, the preoccupations of city-centre workers are more mundane. A big worry is a move by the world's richest countries to make tax havens like the Bahamas end their secretive ways.
'Taking that away takes away a whole lot of jobs, a whole lot of opportunities,' says Patrice, a bank worker.
The Bahamas won independence from Britain in 1973. But to many this move to restrict offshore banking looks like a new form of colonialism - the island nation is asking why it should have to reform a financial system put in place by its former master. And Bahamians also question the hypocrisy of industrialized nations whose own banking systems are often thickly cloaked against outside eyes.
By their heavy-handed and inconsistent approach the rich nations risk sabotaging a necessary crusade. Collective action to end the dubious business done in offshore financial centres is long overdue.
The pressure from the big economies stems mainly from worries about tax evasion. Governments looking to cut income taxes are casting around for alternative measures to raise money for public spending. An attractive option is to tap the wealth of citizens and companies hiding their money offshore.
And there is a lot of money out there. The Organization for Economic Co-operation and Development (OECD), a club of 29 of the wealthiest nations, says the use of tax havens is expanding at an exponential rate. A 1998 report on just two of the havens (the Isle of Man and the Channel Islands) put the size of their financial services industry at $350 billion - comparable to the gross domestic product of the Netherlands.
The OECD has spent almost two years trying to force the havens to bend to its will. In 1998 it drew up a list of 46 targets in four World Cup-style groups roughly divided by geography (see sidebars). Those included range from politically stable territories and independent nations to countries such as Liberia that lack government worthy of the name. They span the continents - from Anguilla in the Caribbean to Monaco to the Pacific island of Niue.
The thing all have in common is that offshore business plays an important, if not dominant, role in their economies. In the Caribbean many of the havens were developed by colonial authorities after the Second World War. They saw offshore banking as an economic salvation for island nations dubbed 'no soil, no oil' because of their lack of natural resources.
The growth of financial services has helped make some havens the envy of their neighbours. Gross domestic product per person in the British Virgin Islands (BVI) last year was $32,700 - about 60 times higher than Haiti. The problem is that this has been achieved with perks for investors that few consider acceptable. The BVI capital, Road Town, is the world's leading venue for creating offshore companies which pay no income tax. Disclosure requirements are minimal. There is no need to publish lists of directors, owners or shareholders.
The havens effectively act as flags of convenience for wealth. It matters little where the business comes from. Offshore centres are as cosmopolitan as the jewellery shop in central Road Town, where the top-priced ring is Italian-designed and set with a Colombian emerald and ten African diamonds.
What the depositors share is a gratitude for the privacy on offer. One example is Michael Ashcroft, a controversial billionaire businessman who donated nearly five million dollars to Britain's opposition Conservative Party. He has formed sufficiently close links with the Turks and Caicos Islands to loan his name to a school. Its motto is suitably wholesome: 'The young of today are the pillars of tomorrow.'
There are myriad reasons why people want to hide away money obtained legally. For one thing it allows companies to keep joint ventures secret from rivals. And it is a way for some businesses to protect assets from lawsuits.
For individuals, tax havens provide a means to protect wealth and avoid personal embarrassment. One banker gives the example of a businessman trying to stop his partner finding out that he is paying child support to his ex-wife. Others are safeguarding gains against taxation or seizure by governments: witness the influx of private banking business into the Bahamas from Latin America in recent years.
None of these arguments impress those charged with keeping dirty money out of the havens. 'They tell you it's offshore for tax reasons,' says an ex-British police officer. 'That's bullshit. The only people who do it are people with something to hide.'
The havens' opacity is a frustration to investigators trying to track criminals and their illegal earnings. Documents that are publicly available in most countries have to be obtained by legal process. This puts those requesting help in a Catch-22 situation: information crucial to proving wrongdoing is often denied because they have failed to provide enough evidence that a crime has been committed.
Money-launderers exploit this to leave investigators with arduous paper chases. Using a technique known as 'layering', the fraudsters build up edifices of companies, each of them registered as the owner of the one on the tier below. By the time the pursuers have reached the end the money may well have gone elsewhere.
Potential for abuse
No-one knows how many of the offshore companies are conduits for criminal activity. The 80 or so agents registered to act for them rarely, if ever, meet their ultimate clients. The two worlds are separated by many intermediaries like lawyers and accountants.
The irony is that the colonial powers were so eager to develop such opaque structures. With the experiment over, the havens find themselves under attack by their creators. Bodies like the Financial Action Task Force, a 28-member inter-governmental body set up to combat money laundering, and the Financial Stability Forum, all have the same mantra: 'more transparency now'.
The former colonial states are showing little regard for the legacy they left behind. Some havens are wrestling with social injustices that stem from the tax systems they've inherited. Forced to raise money through indirect levies rather than income tax, they punish the people any progressive system ought to help.
The Bahamas is a case in point. To compensate for the absence of personal income tax, imports are subject to a hefty duty. This extends to basic items such as milk. While this is irrelevant to offshore investors it makes a big difference to local people, especially those at the bottom of the income scale. 'In the ghetto store, prices are real high,' says Alex Tair, who works for the Government's gaming board. 'The rich guy has got it much more easy than the poor guy.'
The industrial nations are reluctant to address the issue of what happens to these small nations when their tax haven status is withdrawn. Change could drive money away in a rush, causing job losses among banks and other support services. The response of the OECD is a vague commitment to work with development agencies to cushion the social fall-out.
These were sweet words to Swiss banks which have been involved in a string of outrages. And the scandals keep flowing - from Nazi gold to loot hidden by Sani Abacha, the late Nigerian dictator. Switzerland trades on the image that when you walk into one of the country's banks, no-one will know the door by which you leave.
This makes the OECD's position patently hypocritical. While it is reticent to crack down on its own members, the speed of its action against tax havens threatens the livelihoods of many thousands of people. The result could be doubly unfair: economic and social turbulence for small offshore centres as their business shifts to big economies that still offer a 'no questions asked' service.
What is needed is a broad and enforceable commitment to higher levels of disclosure everywhere. A worldwide lifting of the financial veil would offer benefits to both rich and poor countries. Both would cut down on the tax lost to evasion. Greater transparency might also allow the creation and policing of new ethical levies. One example is the Tobin Tax on currency speculation aimed at helping development in poor nations (see NI 320 Redesigning the Global Economy).
This global advance must occur in a way that softens its impact on the people of the offshore centres. The OECD should commit itself to helping those affected, through financial aid and retraining. Many havens are doubly vulnerable given their shaky dependence on tourism revenues. The last thing they need is for another pillar of their economies to be kicked away without replacement.
Colonialism shaped these economies into what they are today and people will see it as a betrayal if their former occupiers deliver a killing blow.
This first appeared in our award-winning magazine - to read more, subscribe from just £7