The growth of London as a centre for financial and professional services coincided with the collapse of the USSR and the rise of post-Soviet kleptocracies in the 1990s. These states and their elites have since become a major source of clients for UK-based services firms and of investors in UK assets.
In keeping with global standards, the UK has officially adopted a risk-based approach to anti-money laundering. However, failures of enforcement and implementation of the law – plus the exploitation of loopholes by professional enablers – have meant that little has been done in practice to prevent kleptocratic wealth and political agendas from entering Britain.
The 30th edition of the Global Financial Centres Index 30, was published today by Z/Yen Group in partnership with the China Development Institute (CDI). The launch webinar for GFCI 30 linked London and Busan.
New York held onto the top position in the index and has now been in first place for three years.
London remained in second place, while Hong Kong and Singapore in third and fourth position both fell 25 points in the ratings.
Overall the average rating fell 12.9 points (2.05%). While a small change, this is the third consecutive fall in the average rating.
The fact that overall ratings continue to fall against the levels that we saw in 2019 reflects the continuing uncertainty around international trade, the impact of the covid-19 pandemic, and geopolitical and local unrest.
Asia/Pacific centres generally fell in the ratings in GFCI 30, and assessments from people based in Asia/Pacific suggest that they judge Chinese centres in particular less favourably than before. This might suggest that the economic gains in the region arising from covid-19 may be levelling off.
North American centres performed well in GFCI 30. This is likely to reflect renewed optimism about the US and Canadian economies as they move forward from the pandemic.
The relatively strong performance of New York and London suggests that the financial services sectors in these cities managed to sustain their performance despite radical changes in working practices during the last 18 months.
Kigali and Lagos join the index for the first time, recognising the growth of financial services in Africa.
The top 20 centres in GFCI 30 are shown in the table below.
FinTech
New York and Shanghai retained first and second positions in the GFCI 30 FinTech ranking, with London rising two places to third place.
In the top 40 positions, Western European centres performed well, with most gaining rank position.
Professor Michael Mainelli, Executive Chairman of Z/Yen, said:
We see two patterns in the results for GFCI 30 – confidence in the recovery of the North American and Western European economies following the shock of 2020; and a levelling off following the rapid rise of Asia/Pacific centres and their economic stability in the covid-19 pandemic. Competition remains tight. Outside the top two centres, only five points on a 1,000 point scale separate the centres ranked third to eighth.
On World Democracy Day, September 15, 2021, the Ghana Center for Democratic Development (CDD-Ghana) and Democracy in Africa (DIA) release two major reports about the capture of supposedly democratic political systems by private networks that work in their own interest, rather than that of the public.
The reports also demonstrate that the extent of democracy capture varies significantly. It is relatively lower or less pronounced in countries such as Ghana, with an experience of multiple transfers of power through competitive elections, and much higher in states such as Zimbabwe where the government has never changed hands. The shape that networks take also varies tremendously and no two shadow states are the same:
In Uganda, the shadow state is run by an axis of President Museveni’s family and the country’s “military aristocracy”, along with a select number of interlocutors in the business community.
In Benin, things look very different, as President Patrice Talon has exploited the weakness of the legal system, the judiciary and the legislature to turn one of the continent’s most vibrant democracies into a near one-party state.
In the DRC, the international military alliances around former President Joseph Kabila played a critical role in creating a shadow state that was intimately connected to transnational smuggling networks.
In Zambia, the security forces have been less relevant and instead democracy capture has been driven by the nexus between civilian politicians, government officials, and private businessmen.
In Zimbabwe, the importance of the military has grown since the early 2000s, penetrating further areas of the state and the economy, raising questions about whether President Emmerson Mnangagwa or army leaders really hold power.
Understanding how democracy is captured is critical because it helps to explain the lack of progress in many countries towards democratic consolidation, how poorly performing governments are able to remain in power, why development programmes often fail to meet the needs of ordinary citizens, and why the gap between the “haves” and “have nots” continues to grow.
Key insights and findings include:
The way that “billionaire judges” in Nigeria make fortunes by taking bribes to exonerate political leaders and criminal organizations, facilitating corruption and creating a culture of impunity that undermines both democratic accountability and the rule of law.
How security officials, bank managers, electoral officials, judges and journalists collude with members of the ruling party to prevent opposition parties from being able to effectively campaign in elections in countries such as Mozambique, Uganda and Zimbabwe, preventing a transfer of power.
The way the police and military in the DRC set up command posts near newly productive mining shaft, not to protect workers but instead to issue unofficial “taxes”, so that some mine operators have to pay 40 regular fees – only 9 of which are official levies of the national government.
How companies with connections to the ruling party and the military in Zimbabwe have used their connections to artificially create a fuel shortage that has enabled them to inflate their prices at the expense of motorists, creating major challenges for businesses and ordinary citizens.
The way that Presidents such as Uganda’s Yoweri Museveni issue tax waivers to their business allies in return for financial contributions to their election campaign “war chest”, denying the Treasury hundreds of millions of dollars in revenue, and reducing the funds available for health and education.
How the partial capture of democracy in Ghana has contributed to the emergence of a distinctive class of super privileged Ghanaians, who have become rich in part due to their privileged access to the state, including governing and opposition party politicians and their cronies in the business sector and leadership of state bureaucratic and parastatal agencies.
According to Professor H. Kwasi Prempeh, Executive Director of CDD-Ghana, “Rather than a government of the people, by the people and for the people, democracy in Africa, including the legitimacy it confers on governments, appears captured to serve interests other than the people’s, thus leaving many people increasingly questioning democracy’s relevance. The future of democracy in Africa depends on our ability to reverse this picture.”
On his part, Nic Cheeseman, Professor of Democracy at the University of Birmingham said, “the growth of shadow states – powerful networks of unelected individuals that use their access to the government to pursue their own interests at the expense of the public – represents the most significant political challenge facing African countries today, and is the root cause of the democratic backsliding that we have seen in many states over the last ten years”.
John Githongo, a noted Kenyan anti-corruption campaigner was also of the view that “these reports represent the most comprehensive and insightful analysis of the way that democracy and economic and subverted in Africa available to date. They reveal that shadow states and democracy capture are the root causes of corruption, inequality and development failure.”
The countries covered in this project include Benin, the Democratic Republic of Congo, Ghana, Kenya, Mozambique, Nigeria, Uganda, Zambia, and Zimbabwe.
Democracy Capture in Benin, Ghana, Kenya, Mozambique, and Nigeria
The Shadow State in the Democratic Republic of Congo, Uganda, Zambia, and Zimbabwe
Italy has been exposed at the heart of an ongoing trade in illicit timber from Myanmar, in defiance of both EU trade regulations and sanctions imposed in response to the violent military coup earlier this year.
In this report, EIA identifies a total of 27 Italian timber traders importing teak timber products.
The payments industry has undergone rapid innovation as spending has shifted online. This has facilitated new systems with customer convenience at their heart but also led to a rise in fraud and scams that the industry is trying to address.
Nespresso launched KAHAWA ya CONGO – a smooth and fruity organic coffee made possible only through the unique brand’s Reviving Origins program, which aims to revitalize coffee production in regions impacted by adversities ranging from climate change to conflict. The first organic blend under the Reviving Origins program, KAHAWA ya CONGO, is from the Lake Kivu region, where the once-thriving coffee farming community has been devastated by decades of political and economic instability.
Since its launch in 2019, the Reviving Origins program has enabled the production of exquisite coffees from areas of Zimbabwe, Uganda, Colombia and now, the DRC, to become available as seasonal coffees for Nespresso coffee drinkers.
In 1980, coffee was the second most important export for DRC and ranked among the world’s finest but declined in the early 2000s due to years of instability that had a devastating impact on the industry. Volumes have since dropped by 10 times.
Nespresso, together with global non-profit TechnoServe, the U.S Agency for International Development (USAID) and coffee trader Virunga Coffee/Olam International, is working with 2,500 farmers in South Kivu to improve coffee quality and yield, and embed sustainable farming practices, while increasing incomes. Nespresso is also in the process of expanding the program across North Kivu to potentially include up to 1,700 organic certified farmers.
Paulo Barone, Head of Coffee Sustainability and Origins Development at Nespresso, said: “Kivu has the potential to be among the world’s great coffee regions but has faced extremely challenging conditions in recent years. Through our Reviving Origins program, we’re working closely with Congolese farmers to revitalise the sector, restore Kivu as a leading source of high-quality, exceptional Arabica coffee and rebuild sustainable livelihoods, while bringing vital social support to enhance the welfare of the communities behind our KAHAWA ya CONGO coffee.”
Paul Sabatine, Mission Director for USAID/Democratic Republic of the Congo, said: “Nespresso’s partnership with USAID to revitalize DRC’s coffee sector is critical for Congolese farmers, who now have better coffee quality, improved productivity and higher incomes. Communities have experienced stronger economic development due to the partnership, in a region where absence of sustainable livelihoods fuels conflict. We look forward to a continued collaboration with Nespresso as we jointly seek to improve farmers’ livelihoods.”
Will Warshauer, President and CEO of TechnoServe, added: “This coffee represents the incredible spirit of Congolese farmers who have overcome so much to build a better life for their families. In working with these farmers to improve their coffee crops, TechnoServe has seen how dedicated buyers like Nespresso, who pay higher prices for higher quality, can transform the livelihoods of thousands of people in this conflict-affected region. We’re looking forward to a bright future for Congolese coffee and for the hardworking farmers who produce it.”
Kivu coffee farmer, Turanyi Kabasura, said: “I see my remaining days being better than those in the past, because I am going to work, assured of receiving regular pay and a bonus each time after the coffee sale. In my whole life, no one has ever given me such a bonus. I can use that to develop other strategies, such as raising small livestock, or my wife can run a small business. I am starting to see the results of my work.”
REVIVING COFFEE AND COMMUNITIES IN KIVU
In Kivu, decades of conflict have led to many farmers fleeing their homes, and the region continues to face significant economic and healthcare challenges. Today, 58% of households in DRC lack access to clean water systems, and 15% of children do not reach their 5th birthday, with preventable and treatable diseases such as water-borne illnesses, acute respiratory infections and malaria among the leading causes.
In partnership with the Eastern Congo Initiative (ECI), Nespresso is investing CHF 1 million to support the establishment of 23 water access points across the region, in addition to one primary and five mobile health clinics, which will deliver 13,000 health consultations per year to local communities, helping in the fight against cholera, a major health issue in the country.
Abraham Leno, ECI Executive Director, said: “Eastern Congo has suffered through decades of fighting. During those years in addition to terrible loss of countless people, the economy collapsed and public institutions’ capacity to care for the people of Congo was greatly depleted. But farmers kept working their fields and tending their coffee trees, because they knew that it was their path to a brighter future for their families. That is the true spirit of Congo. Nespresso’s funding of Asili, the social enterprise powered by ECI, will help farmers secure that future – building meaningful livelihoods and bringing world-class essential services, like clean drinking water and affordable healthcare, to families. It’s transformational change like this that allows hope to flourish and communities to heal.”
Nespresso’s unique sustainable sourcing model in coffee producing countries, the Nespresso AAA Sustainable Quality™ Program, provides the foundation for its work in Reviving Origins regions and involves more than 120,000 farmers across the world. Overall, Nespresso is investing a total of CHF 10 million in the Reviving Origins program over a period of five years (2019-2023).
KAHAWA ya CONGO is available online and at Nespresso boutiques, alongside Reviving Origins coffees AMAHA awe UGANDA, TAMUKA mu ZIMBABWE and ESPERANZA de COLOMBIA – returning for 2021. The long-term objective of the Reviving Origins program is to establish these under-threat coffees as permanent blends, available all year round for consumers.
KAHAWA ya CONGO: “Hope of Congo”
The rain-rich volcanic soils along the Kivu lakeshores of Eastern Congo provide an ideal environment for growing specialty Arabica coffee. The first organic coffee in the Reviving Origins range, KAHAWA ya CONGO is a smooth, seasonal coffee with a mild, fruity note, and alluring sweet cereal and nutty aromas.
A report published today by The Sentry, “Shadows and Shell Games: Uncovering an Offshore Business Empire in Zimbabwe,” reveals key details of the business practices of controversial businessman and presidential advisor Kudakwashe Tagwirei.
The Sentry’s investigation reveals that Tagwirei, who has been followed by allegations of corruption and cronyism for years, has been using complex corporate structures and seemingly preferential government treatment to build his business empire and enormous wealth. The tycoon now presides over a sprawling network of more than 40 companies spanning the oil, mining, banking, logistics, transportation, and import/export sectors. The report details how Tagwirei has effectively concealed his control over this empire through an elaborate foreign network, hiding his wealth and ownership through offshore financial structures.
Economic Impact of the Pandemic and Policy Responses. Mauritius has been successful in containing the COVID-19 pandemic thanks to strict health measures but the halt in tourism has significantly affected its tourism-dependent economy. A comprehensive set of stimulus measures to mitigate the economic impact of the pandemic, including a wage subsidy and income support for the self-employed, have provided support to firms and households.
Environmental crime – such as forestry crime, illegal mining and waste trafficking - is an extremely profitable criminal enterprise, generating billions in criminal gains each year. It fuels corruption, and converges with many other serious and organised crimes, such as tax fraud, drug trafficking and forced labour.
Environmental crime is a ‘low risk, high reward’ crime. Across many countries, light sanctions for environmental crimes alongside limited efforts to follow and remove the profits, make this is a lucrative but safe source of income for criminals. The FATF therefore conducted this study to increase understanding of the scale and nature of money laundering threats from environmental crime and to strengthen the response across public and private sectors. The G20 Finance Ministers and Central Bank Governors have similarly recognized the need to strengthen action, and the importance of FATF’s role in supporting biodiversity aims.
Building on the FATF’s 2020 report on money laundering from the illegal wildlife trade, this report shows that criminals are making enormous profits by using front companies to mix legal and illegal goods and payments early in the resource supply chains. They also rely on corruption, trade-based fraud, and offshore corporate structures to conceal the ultimate criminals benefitting from these crimes.
As a priority, countries should:
The private sector also has an important role in detecting financial flows from environmental crimes. The FATF’s study identifies good practices and risk indicators to help financial and non-financial sectors detect potential cases.
Going forward, FATF will continue its focus on environmental crime, including exploring whether further policy work is needed. In September 2021, FATF plans to hold a public webinar for non-government stakeholders to discuss the findings of this new study.
After the “unprecedented” year that was 2020, Q1 of 2021 has been fast and furious for both ThoughtLeaders4 FIRE and the Asset Recovery Community.
As office doors creak open, wingtips start to hit the pavements and signs of life cautiously return to London, our authors review this quarter with one eye firmly fixed on the future.
The twenty-ninth edition of the Global Financial Centres Index (GFCI 29) was published on 17 March 2021. GFCI 29 provides evaluations of future competitiveness and rankings for 114 financial centres around the world. The GFCI serves as a valuable reference for policy and investment decision-makers.
China Development Institute (CDI) in Shenzhen and Z/Yen Partners in London collaborate in producing the GFCI. The GFCI is updated and published every March and September, and receives considerable attention from the global financial community.
126 financial centres were researched for GFCI 29 of which 114 are now in the main index. The GFCI is compiled using 143 instrumental factors. These quantitative measures are provided by third parties including the World Bank, the Economist Intelligence Unit, the OECD and the United Nations.
The instrumental factors are combined with financial centre assessments provided by respondents to the GFCI online questionnaire. GFCI 29 uses 65,507 assessments from 10,774 respondents.
The results of GFCI 29 include:
Leading Centres
Western Europe
Asia/Pacific
North America
Eastern Europe & Central Asia
Middle East & Africa
Latin America & The Caribbean
FinTech
Jamaica’s Blue Mountains – steep slopes, volcanic soils, and island mists – are ideal Arabica terroir. This controlled designation of origin ships their treasured beans in iconic handmade wood barrels. The exotic woody and rich spice notes of this rare crop make JAMAICA BLUE MOUNTAIN worthy of its protected name.
ORIGIN
Arabica bean from the steep slopes and volcanic soils of Jamaica’s Blue Mountains.
ROASTING
The treasured Jamaica Blue Mountain beans get a split roast. Both splits are darker roasts – it develops intensity while balancing the flavor. The second split takes a little longer and that builds the coffee’s intensity without pushing the bitter note too far.
AROMATIC PROFILE
Exotic woody notes mark this Limited Edition espresso. This Jamaican treasure carries a pleasantly spicy aftertaste – hints of pepper, cinnamon and nutmeg lingering long after the last sip.
Coffee lovers eager to discover the diverse coffee tastes of the world can now enjoy Nespresso World Explorations. The coffee range builds on the popular Lungo collection which showcases distinct coffees inspired by the cities of Cape Town, Tokyo, Stockholm and Vienna, with the addition of two new cups inspired by Shanghai and Buenos Aires.
Inviting consumers on a journey that will enhance their tastes and enrich their coffee knowledge, the World Explorations range features the intense Cape Town Envivo Lungo and Stockholm Fortissio Lungo, as well as the more balanced Vienna Linizio Lungo and Tokyo Vivalto Lungo, with two new mild cups, Shanghai Lungo and Buenos Aires Lungo, inspired by the flavour profiles typical of these Asian and South American cities.
Celebrating traditional coffee moments from around the world like the Viennese coffee house culture, where coffee becomes part of a special trip and is enjoyed idly from morning ‘til night, or Argentina’s Merienda coffee break, observed late in the afternoon alongside sweet and savoury snacks, Nespresso World Explorations captures the sensations, tastes and aromas of some of the world’s most admired cities.
World Explorations Shanghai Lungo
World Explorations Buenos Aires Lungo
In a nod to Argentina’s vibrant food scene where sweetness prevails, Nespresso’s World Explorations Buenos Aires Lungo blends a gently roasted Colombian Arabica with Ugandan Robusta, to deliver distinct cereal and sweet popcorn notes. Paying tribute to the city’s love for smooth long cups characterised by a sweet, milky flavour, it is best served with a generous drop of milk and sugar.
World Explorations Cape Town Envivo Lungo
Reflecting South Africa’s preference towards Asian coffees, which have shaped local tastes over time, Nespresso’s World Explorations Cape Town Envivo Lungo blends Indian Arabica and Robusta to deliver an intense and full bodied Lungo with a punchy, bitter note and woodsy aroma. Unfold the coffee’s smooth roasted notes with a splash of milk to enjoy it like a local.
World Explorations Stockholm Fortissio Lungo
Taking consumers on a leisurely wander through Stockholm, Nespresso’s World Explorations Stockholm Fortissio Lungo recreates the aromatic profile of a Swedish coffee by coupling Monsooned Malabar with Colombian Arabica for an intense, sweet cup with a hint of bitterness. To taste this cup like a true Swede, we suggest serving this flavourful coffee with friends and family over a plate of cinnamon rolls.
World Explorations Tokyo Vivalto Lungo
World Explorations Vienna Linizio Lungo
Taken from Vienna’s coffeehouse tradition, Nespresso World Explorations Vienna Linizio Lungo pays homage to the many recipes and smoothness of Viennese coffee, pairing sweet Brazilian and Colombian Arabicas, lightly roasted by our experts to enhance the malty and aromatic notes in the cup. For an authentic coffee experience, this Lungo is suggested to be topped up with hot water for an even longer cup and served with a slice of cake.
