The Qatar Law Forum will host the Doha Legal Conference in Doha from 29th to 31st May 2009 under the patronage of His Highness the Emir of the State of Qatar, Sheikh Hamad bin Khalifa Al-Thani. Its purpose is to provide an unprecedented opportunity for global leaders in law to debate the global commitment to the Rule of Law. The importance of this debate in the present global economic circumstances is self-evident. It is the ambition of the Forum to be the foremost meeting for positive transnational engagement among leaders in law from around the world. Given its reach, the Forum offers an unparalleled opportunity for face-to-face dialogue. It will address the administration of justice, latest methods of dispute resolution, and legal education, in an ever-changing world. Its focus will include the role of the law in meeting the world’s current financial challenges. The hosting of the Forum in the Middle East will allow the issues to be addressed both at a global level and in an Islamic context. There is the confirmed attendance of leading judicial figures (including eleven serving Chief Justices), distinguished academics from universities in Europe, the Americas, the Far East and the Middle East, together with regulators, central bankers and general counsel of the most senior level.
Among the host of topics being covered at the conference, the following may be in focus :
- Islamic Finance;
- The Legal Profession Today: Local and International Practice;
- From Delaware to Doha: the Legal Environment Necessary for Corporate Centres and Thriving Financial Markets;
- Redefining Global Governance;
- International Organisation and the Economic Crisis: The Contribution of Global and Regional Cooperation in Trade and Finance;
- In a Time of Financial Stress: Regulatory Law and the Credit Crunch; and
- International Dispute Resolution: Mediation and Arbitration and the Place of Law and Economics.
The provisional programme is available here...
Wednesday, May 6, 2009
Saturday, May 2, 2009
Colors of Money in India
BLACK MONEY in Swiss bank from India has become a major issue in the current Lok Sabha elections in the country. The BJP, the Congress and the Left have decided to capitalise on the issue making claims and counter claims. According to an estimate put forward by BJP’s prime ministerial candidate L K Advani , anything between 25 lakh crore and 70 lakh crore of rupees have been siphoned out of the country in the past sixty years. While the BJP blamed the Congress for siphoning off funds from the country, the Congress rebuffed by saying that even the NDA government during its tenure did not take any steps to prevent such siphoning off of funds from the country. According to the 2006 estimate of the Swiss Bank Association, the Indians have deposited over 1450 billion dollars. A recent estimate said the amount had now gone up to 1891 billion dollars. Source
Why call it "Black" ?
So how come we call it black money? All countries, to a greater or smaller percentage, have what is known as a parallel, or cash, economy that operates outside the legitimate loop. But India's parallel economy is unparalleled, in that by many guesstimates it is not only as big as the legit economy but in fact a couple of times bigger. And we have a unique name for it. Black money. Also known as No.2. The origins and current disposition of black money are as mysterious as its name. Source
A 2006 report of the Swiss Banking Association dug out by an Indian private channel, CNN-IBN, claims Indians are the biggest depositors of black money in banks located in Switzerland. Top five countries in terms of such deposits were:
India: $1456 billion
Russia: $470 billion
UK: $390 billion
Ukraine: $100 billion
China: $96 billion
India with $1456 billion or $1.4 trillion has more money in Swiss banks than rest of the world combined. This must be unaccounted money earned in India by wrong means as otherwise any Indian wanting to open a bank account abroad has to take permission of the Reserve Bank of India and records do not show any such permissions granted for deposits in Switzerland. In March 2005, the Tax Justice Network (TJN) published a research finding demonstrating that $11.5 trillion of personal wealth was held offshore by rich individuals across the globe. The findings estimated that a large proportion of this wealth was managed from some 70 tax havens. Source
The share prices of real estate companies have crashed. Yet, India has no mortgage crisis or financial sector crisis. Why not? Mainly because of the huge amount of black money in Indian real estate. This has saved the Indian financial sector in unexpected ways. This is because a large proportion, often half, of almost all home purchases is paid in black money. If a house is sold for Rs 100 lakh, the official registered value will typically be only Rs 50 lakh, with the balance paid under the table in cash. A bank may loan Rs 50 lakh, covering the entire formal price. However, the owner's contribution is not zero: he has paid Rs 50 lakh in black. To preserve that black investment, he will keep paying his installments even if house prices dip.Now, the Indian legal system is so slow that borrowers have little fear of even their mortgaged homes being seized, let alone other assets. Yet, they do not default, and India's financial system remains strong. The reason is that banks enjoy, without asking for it, a huge safety margin provided by the black money invested by every home owner. To preserve this black investment, borrowers will do their level best not to default and lose their property. Ironically, black money enforces loan discipline in India, far more effectively than formal contracts or legal processes. Source
Since the Middle Ages, Switzerland has stood for bank secrecy -- or bank privacy, as the Swiss would insist. In the past month, this foundation of Swiss banking has collapsed under calls for transparency, making Swiss banks seem as outdated as cuckoo clocks. The nearly universal condemnation of Swiss banking is a sign of how quickly our expectations about privacy have changed. Under pressure from the U.S., Germany, Britain and other high-tax countries, the Swiss agreed to abandon their longstanding protections for depositors accused by their home countries of tax evasion. Until now, countries had to present evidence of fraud, a more serious accusation, before Swiss banks would turn over information about their clients. Switzerland has long been the preferred location for private banking, with more than $2 trillion of the $7 trillion in all offshore deposits located in the country. For many years, the global consensus was that the benefits of banking secrecy outweighed the clear vices. It took almost 50 years before Swiss bankers agreed to look into deposits left by Jews killed by the Nazis, eventually creating a $1.25 billion fund for their heirs. The Swiss have taken other steps, including against terrorists and money launderers, but the hard line against tax complaints from other countries was considered unmovable. Source
Why call it "Black" ?
So how come we call it black money? All countries, to a greater or smaller percentage, have what is known as a parallel, or cash, economy that operates outside the legitimate loop. But India's parallel economy is unparalleled, in that by many guesstimates it is not only as big as the legit economy but in fact a couple of times bigger. And we have a unique name for it. Black money. Also known as No.2. The origins and current disposition of black money are as mysterious as its name. Source
A 2006 report of the Swiss Banking Association dug out by an Indian private channel, CNN-IBN, claims Indians are the biggest depositors of black money in banks located in Switzerland. Top five countries in terms of such deposits were:
India: $1456 billion
Russia: $470 billion
UK: $390 billion
Ukraine: $100 billion
China: $96 billion
India with $1456 billion or $1.4 trillion has more money in Swiss banks than rest of the world combined. This must be unaccounted money earned in India by wrong means as otherwise any Indian wanting to open a bank account abroad has to take permission of the Reserve Bank of India and records do not show any such permissions granted for deposits in Switzerland. In March 2005, the Tax Justice Network (TJN) published a research finding demonstrating that $11.5 trillion of personal wealth was held offshore by rich individuals across the globe. The findings estimated that a large proportion of this wealth was managed from some 70 tax havens. Source
The share prices of real estate companies have crashed. Yet, India has no mortgage crisis or financial sector crisis. Why not? Mainly because of the huge amount of black money in Indian real estate. This has saved the Indian financial sector in unexpected ways. This is because a large proportion, often half, of almost all home purchases is paid in black money. If a house is sold for Rs 100 lakh, the official registered value will typically be only Rs 50 lakh, with the balance paid under the table in cash. A bank may loan Rs 50 lakh, covering the entire formal price. However, the owner's contribution is not zero: he has paid Rs 50 lakh in black. To preserve that black investment, he will keep paying his installments even if house prices dip.Now, the Indian legal system is so slow that borrowers have little fear of even their mortgaged homes being seized, let alone other assets. Yet, they do not default, and India's financial system remains strong. The reason is that banks enjoy, without asking for it, a huge safety margin provided by the black money invested by every home owner. To preserve this black investment, borrowers will do their level best not to default and lose their property. Ironically, black money enforces loan discipline in India, far more effectively than formal contracts or legal processes. Source
Since the Middle Ages, Switzerland has stood for bank secrecy -- or bank privacy, as the Swiss would insist. In the past month, this foundation of Swiss banking has collapsed under calls for transparency, making Swiss banks seem as outdated as cuckoo clocks. The nearly universal condemnation of Swiss banking is a sign of how quickly our expectations about privacy have changed. Under pressure from the U.S., Germany, Britain and other high-tax countries, the Swiss agreed to abandon their longstanding protections for depositors accused by their home countries of tax evasion. Until now, countries had to present evidence of fraud, a more serious accusation, before Swiss banks would turn over information about their clients. Switzerland has long been the preferred location for private banking, with more than $2 trillion of the $7 trillion in all offshore deposits located in the country. For many years, the global consensus was that the benefits of banking secrecy outweighed the clear vices. It took almost 50 years before Swiss bankers agreed to look into deposits left by Jews killed by the Nazis, eventually creating a $1.25 billion fund for their heirs. The Swiss have taken other steps, including against terrorists and money launderers, but the hard line against tax complaints from other countries was considered unmovable. Source
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