I. INTRODUCTION
May I start by stating that I worked for the United Nations most of my youth and until retirement. After so many years, I have become a product, knowledgeable and defender of the United Nations, firmly believing in its founding principles. I re-read the United Nations Charter from time to time, to reassure myself that the organization remains the central credible instrument in the pursuit of peace and development in the world, as the Charter states. The reality, as we know it and as I have seen, is a little more complicated and less Cartesian. I have worked very closely with United Nations peacekeeping missions in the DRC, Mali and other African countries. I had serious reservations. Especially that the country that heads the Department of Peacekeeping Operations at the United Nations (UN) is France, a country with a murky and current colonial history in Africa; it still holds colonies - New Caledonia, Mayotte Islands, Réunion, etc. What efficiency and sincerity can we expect in the maintenance (restoration) of peace?
Having been an international civil servant, I am still required to observe certain residual ethics of the United Nations, even though I am now an ordinary citizen, a retired officer. I therefore will not further elaborate on the internal politics of the system.
Still, the great advantage I have is having had the opportunity to experience both sides of the equation. Living today outside the system, I have had the opportunity to hear statements from many detractors, many critics who are not detractors, and which make me realize the fuzzy image the United Nations has gained in the world outside. That affects and reinforces my judgment in a major way. There are countless examples that the world sees that lead to the conclusion that the United Nations is being manipulated to promote policies that do not genuinely align with the spirit and letter of its Charter, especially in relation to Africa. That on the contrary, the UN serves political, economic and social agendas of powerful forces and countries. The International Trade Organization being a case in point.
The workings of the United Nations today are comparable to how the parliament of Mozambique has been operating until recently. The government has cornered it into simply playing the role of rubber-stamping laws submitted by the government itself, and therefore, by the dominant party, since the government and the party have since merged into one. Parliament did not create any laws of its own initiative, despite it being the legislative branch of the state. The party holding an absolute majority in parliament, political power was amalgamated with the executive power and legislative power was taken over. Fusing the executive and the legislative, the government became FIFA, sports club and referee all at the same time. The same happens in the United Nations, where those who have the power of veto are those who have promoted more wars, contrary to the very meaning and reason for the creation of a Security Council. The perception that the United Nations is an instrument of great powers is reinforced on several occasions and repeatedly. Today I'm going to discuss another (small) way.
II. THE THEME
Here, I wish to discuss an initiative called TAX INSPECTORS WITHOUT BORDERS (TIWB). What is it and what is it for?
Launched in 2015, the TIWB program is a capacity building program, a joint initiative of the OECD (Organization for Economic Co-operation and Development) and UNDP aimed at supporting developing countries in building tax audit capacity. TIWB tax audit specialists work with officials from tax administrations in developing countries. It aims to transfer knowledge and technical skills to tax auditors in developing countries, as well as share general auditing practices. Developing country administrations are the main targets (euphemistically called partners) of TIWB programs; these countries are encouraged to define their needs and scope of work. The TIWB Secretariat is jointly managed by the OECD and UNDP and is based in Paris.
Right there, the intention to create an organization “without borders” means that it does not answer to any government, especially not from the targeted countries. They did not receive mandate from anyone but they wish to impose themselves as an organization that defines rules to be observed by the poorest countries, rules that become standards called “international”, without consensus, and compliance becomes the burden of poor countries. With negative impacts that are no one’s responsibility. Why negative? We will see further down with the example of my country.
It turns out that this OECD initiative, to which the United Nations is associated via the UNDP, cannot be isolated from the self-empowered regulatory body for financial flows, also based in Paris, the Financial Action Group (FATF). The FATF leads global action to combat money laundering and financing of terrorism. It investigates how money is laundered, how terrorism is financed, and promotes global standards to mitigate risks and then assess whether countries are taking effective measures to do so. Who empowered it?
Without any consensus, the FATF ends up imposing itself, particularly on banks in developing countries. Interestingly, the only African country member of the FATF is South Africa, whose central bank (Reserve Bank of South Africa) continues to be constituted by private foreign capital and the government of South Africa has no say in it, more than thirty years after the end of apartheid! Without financial sovereignty, South Africa cannot claim to represent Africa. We are not in the FATF. Full stop.
Despite the self-attributed mandate and being very influential with banks in developing countries, forcing rules said to prevent illicit flows, its constitution says: “This Mandate is not intended to create any legal rights or obligations”. In other words, forcing, but with the possibility of denying the responsibility for having forced others. These are self-imposed instruments, initiatives and organizations.
Similar to the annual DAVOS economic forum, without anyone's mandate, but gradually taking charge of the world economy, and gradually becoming a world government.
Illicit capital flows, you said?
Meanwhile, two things are being allowed: the illicit flow of capital from developing countries to “tax havens” and developed countries. The aim here is to promote the imposition of stricter tax collection on citizens through experts “without borders”, while allowing government elites to export capital and have unlimited accounts abroad. To reduce the circulation of money in the national economy and, in return, protect the collaborating national elites, allowing them to export capital to offer their children the best schools abroad and their families the best medical treatment abroad, which are not available in their so-called poor countries; poor countries without which rich countries would be even poorer. The withdrawal of money from citizens and from circulation in the national market means that investments in health and education are made impossible.
Let me be allowed to repeat: Where does the collected tax go? It is not intended to improve services, but rather to finance the lives of national and foreign elites in developed countries. It is not about renouncing or denouncing tax collection, but rather how and where the collected tax is channeled.
And how are the conditions created for those “without borders” to find ground and justification to help us? By weakening us and rendering us in need of their help.
And how do they weaken us? By exploiting our economies through extractive industries and drying up the money from local circulation, thus starving the national economy.
How so? Getting us used to and dependent on the dollar and the loans; and then demanding high interest rate payments on loans.
For an economy that produces little and imports much more (including imports of second-hand products) like ours, there is little money left to service loans (pay interests, which last for decades). Thus, we spend time paying interests without the capacity to pay the principal. It is this state of dependence that is of interest to international capital, as has been proven by the many rescheduling schemes, debt restructuring debt re-financing and other schemes designed to perpetuate the unequal and imbalanced relationship. Improved tax collection is then presented as justification for saying that we know how to control inflation and deserve more loans. And we once again spend time paying accumulated interest. A vicious cycle of perpetual poverty is imposed, with the support of “technicians without borders” who come to help us accelerate tax collection to pay interest, with the IMF and the World Bank watching, such other agents “without borders”.
On the other hand, and to reinforce this dependence on the international foreign capital, two huge burdens are imposed on Mozambican banks (local banks) to achieve their goals: very high domestic interest rates and high mandatory interbank deposits.
III. MOZAMBIQUE
The case of Mozambique that we now discuss is typical of a neocolonial situation. Click here to find out more (in Portuguese).
Prime rates from 2022 very high
In its capacity as central bank, the Bank of Mozambique introduced in 2022 a very high Prime Rate for credit operations in the financial system, which was immediately denounced by businesspeople and citizens with credit holdings in the national banks. In fact, from October 2023, such rates are set at 18.60%, and 20.5%, with an aggravated impact on interest rates from commercial banks to corporate and individual businesses. First instrument of economic asphyxiation.
On the other hand, the mandatory reserves with the central bank (Banco de Moçambique) by the commercial banks were set at 10.5% for national currency and 11% for foreign currency deposits until January 2023. In the first six months of 2023 the central bank increased reserve requirements, to (in the bank's explanation) "absorb the excessive liquidity in the banking system, which risks to generate inflationary pressure". Today, mandatory reserves are 39% of deposit holdings in national currency and 39.5% of deposits in foreign currency. (hyperlink to text in Portuguese). This is the second bottleneck in the economy.
Even the IMF felt that the central bank had been overzealous. Having understood that the noose was too tight, the IMF now wants to distance itself from a policy it promoted, suggesting that this level of compulsory deposits be reduced! You can read the article here (Portuguese).
According to the Mozambican Association of Banks, this increase would result (or resulted) in a transfer of some USD 1.03 billion (MZN 47 billion and USD 245 million), equivalent to 5% of commercial banks' deposit holdings to the Bank of Mozambique.
Starving the economy of oxygen! With political programmes such as SUSTENTA (government agricultural financing project that benefitted only members of a political party) commercial support for small businesses and entrepreneurs and small farmers is made impossible and only mega-projects can survive.
An entire national cycle has been created and is being reinforced in collusion with foreign interests, with the objective of exporting financial resources out of Mozambique. To pay off loans (including the sadly famous hidden debt); to qualify for more loans, thus reinforcing continued dependence on the international financial capital. On the other hand, various other fallacies are being sold to us, such as the “demographic dividend” that looks at population in a negative light, or the idea that by a certain date, 30% of our territories are supposed to be set aside for natural reserves and parks, and other weird schemes that disguise the assault of international capital on national sovereignty, draining finances and devaluing and undervaluing our national currency.
As I said in my article on the National Development Strategy 2025-2034 (article in Portuguese), this monetary policy, practiced by a central bank whose Governor does not respond to summons from the National parliament, a body representing national sovereignty, the development strategy has no financing because despite the fact that the strategy includes many elements of interest to foreign capital, it cannot be financed because there simply is no money and it does not have a development bank, as foreseen in the strategy itself as a condition for success.
IV. MY THESIS
National sovereignty is under attack on several fronts: on the territorial security issues in Cabo Delgado, because of the extractive industries. On the lack of food sovereignty and security. And on the absence of economic sovereignty, as proven by the short closure of the Ressano Garcia/South Africa border at the end of 2024 due to popular demonstrations.
As long as we blindly follow the dictates of international institutions such as the World Bank and the International Monetary Fund (which in fact has a say in the appointment of the Governor of the central bank in many African countries). As long as there is no financial sovereignty, I say, let's forget the success of the National Development Strategy 2025-2034, even with its shortcomings.
There are many forces “without borders” and unfortunately from time to time they also appear under the diplomatic cover of the United Nations.
A luta continua: the said luta will be long and will require a lot of discernment and persistence. It will require strong institutions, or the deliberate strengthening of such institutions.
Jose
Tete, January 2025
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