Banana Republic?

IN political science, the term banana republic describes a politically unstable country with an economy dependent on the export of natural resources.

A country with a so-called “hijacked and controlled democracy” and a corrupt government to the core and cronies ruling with impunity.

A state where the rule of law is totally absent and replaced by “strength and wealth are right”. In a word, a country where kleptocracy, theft, plutocracy, patronage, nepotism and corruption run rampant.

In 1904, the American author, O.Henry, coined the term “Banana Republic” to describe Honduras and neighboring countries economically exploited by American corporations.

Typically, a banana republic has an extremely stratified social class society, typically a large impoverished working class and a ruling class plutocracy, comprised of business, political, and “deep state” actors/elites.

The ruling class controls the primary sector of the economy through labor exploitation; thus, the term banana republic is a pejorative descriptor of a servile oligarchy that encourages and supports bribery, exploits large-scale plantation agriculture, especially banana growing, for its own good.

A banana republic is a country with an economy of state capitalism, in which the country is operated as a private business enterprise for the exclusive benefit of the ruling class.

This exploitation is made possible by the collusion between the State and favored economic monopolies, in which the profit, derived from the private exploitation of public lands, is private property, while the debts thus incurred are the financial responsibility of the plublic treasure.

Such an unbalanced economy remains constrained by the uneven economic development of town and country and usually reduces the national currency to devalued banknotes (paper money), making the country ineligible for international development credit.

Kleptocracy is a government whose corrupt rulers (kleptocrats) use political power to expropriate wealth from the people and lands they rule, usually by embezzling or embezzling public funds at the expense of the entire population.

Volocracy is literally the rule of thieves and is a term used synonymously with kleptocracy. One of the characteristics of political socio-economic theft is that there is often no public announcement explaining or apologizing for the hijackings, nor any charges or legal sanctions against the violators.

Kleptocracy is different from plutocracy (rule by the wealthy) and oligarchy (rule by a small elite).

In a kleptocracy, corrupt politicians secretly enrich themselves outside the rule of law, through bribes, bribes, and special favors, or they simply funnel public funds to themselves- themselves and their associates.

Moreover, kleptocrats often export a large part of their profits to foreign countries, in anticipation of the loss of power.

Kleptocracies are usually associated with autocratic and nepotistic governments in which external oversight is impossible or does not exist.

This lack of control may be caused or exacerbated by the ability of kleptocratic officials to control both the inflow of public funds and the means of disbursement of those funds.

Kleptocratic rulers often treat their country’s treasury as a source of personal wealth, spending funds on luxuries and extravagances as they see fit.

Kleptocracy is more common in developing and collapsing countries whose economies depend on trade in natural resources and/or limited exports.

The dependence of developing countries on export earnings constitutes a form of economic rent and is easier to siphon off without leading to lower incomes.

This leads to wealth accumulation for elites and corruption can serve a beneficial purpose by generating more wealth for the state.

In a collapsing nation, dependence on imports from foreign countries becomes likely as the nation’s internal resources are depleted, thus binding itself contractually to trading partners.

According to some experts, one of the reasons government agencies subscribe to pro-theft policies is to lay the groundwork for the socialization of labor and property in an effort to allow thieves to make the population “subject to a institutionalized authority”.

Newspaper columnist Paul Greenberg, writing against the idea of ​​the United States sending large amounts of foreign aid to Poland in 1989, argued that Poland was emerging from “40 years of communist thievocracy which wiped out not only the economic progress but also the idea of ​​a modern economy”.

Contemporary studies have identified the 21st century kleptocracy as a global financial system based on money laundering, which “depends on the services of the world’s largest banks and expert financial professionals”.

The International Monetary Fund has suggested that it may be a consensus of estimates, according to which money laundering accounted for 2-5% of the global economy in 1998.

Kleptocrats engage in money laundering to hide the corrupt origins of their wealth and protect it from domestic threats such as economic instability and predatory kleptocratic rivals.

They are then able to secure this wealth in the form of assets (usually real estate) and investments in more stable jurisdictions, where it can then be stored for personal use, sent back to the country of origin to support activities. servants of the kleptocrat, or deployed elsewhere to protect and project the regime’s interests abroad.

Since 2011, more than $1 trillion has left developing countries every year in the form of illicit financial flows.

A 2016 study found that $12 trillion had been diverted from kleptocracies – developed and developing economies.

Western professional service providers are exploited by kleptocratic rulers by exploiting Western legal and financial loopholes to facilitate transnational money laundering.

The kleptocratic financial system generally has four stages according to one opinion. First, kleptocrats or those acting on their behalf create anonymous shell companies to conceal the origins and ownership of funds.

Multiple interlocking networks of anonymous front companies can be created and named administrators appointed to further conceal the kleptocrat as the ultimate beneficial owner of the funds.

Second, kleptocrats violate Western laws when they illegally transfer funds into the Western financial system.

Third, the financial transactions made by the kleptocrat in a Western country complete the integration of funds.

Once a kleptocrat has purchased an asset, it can then be resold, providing a defensible albeit illegal source of funds.

This is known as money laundering and is illegal throughout the western world. Research has shown that buying luxury real estate is a particularly preferred method.

Fourth, according to a British tabloid, kleptocrats could use their illegally laundered funds to engage in reputation laundering, hiring public relations firms to present a positive public image and lawyers to suppress journalistic scrutiny of their political connections and of the origins of their wealth.

Many countries currently fit the description above? I leave it to readers, intellectuals, scholars and patriotic citizens to think about it seriously.

—The author is a former civil servant, ILO and IOM consultant.

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