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I found this interesting after spending a few weeks there this Summer on a whim. Everything about it is just so improbable. Tiny ancient place, Arabic-descended

I found this interesting after spending a few weeks there this Summer on a whim. Everything about it is just so improbable. Tiny ancient place, Arabic-descended language, Mediterranean climate, built environment like some cross of Crete and Jerusalem, Catholic culture and social mores, English food-and-drink, and now also ugly sprawl and car-culture, receding nature, people everywhere. All that and crawling with the families of minor Russian oligarchs and unashamedly advertising all sorts of tax-haven services. Just... weird.

neaden 9y ago
I wonder if corruption is to some degree inevitable in any country this small. How do you deal with international companies and billionaires who are richer than your entire nation?
- ajmurmann 9y ago
  Hah, that's a fascinating point to me because I always thought small countries made corruption harder because everyone will know what's going on. I wonder if for the reasons you describe the is more corruption but it has less negative impact because everyone is watching and eventually gets paid off.
  - garmaine 9y ago
    The trickle down effect of corruption is very real and noticeable on small island nations.
  - barrkel 9y ago
    Small countries have small elites that are far more likely to have gone through the same educational institutions and run in the same social circles. A corruption of back-scratching at the top, where consequences and laws are for the little people, rather than a culture of pervasive bribery. Ireland is corrupt like this - not for major crimes, just lots of little things, like planning permission and speeding points on driving licenses. Nobody wants to make a big stink because everybody swims in the same small pond, and what goes around comes around. Here's a case study on the topic of speeding points: https://www.theguardian.com/media/greenslade/2013/oct/03/irish-independent-ireland https://www.theguardian.com/media/greenslade/2013/oct/03/iri... ; speeding points corruption is an ongoing political issue that has brought down multiple justice ministers, primarily due to the attempted coverups (trying to silence Maurice McCabe).
- austroscot 9y ago
  > How do you deal with international companies and billionaires who are richer than your entire nation? I think drawing correlations between country size/population/gdp/wealth and corruption is going to be difficult. However, arguably, looking at smaller countries we should see this trend at a similar rate. I'd suggest comparing with extremes: two, much smaller European countries. - Andorra; pop: ~90k, GDP per capita (2016, est.) ~36k USD - San Marino; pop: ~35k, GDP per capita (2017, est.) ~45k USD I spent a while looking in to them, but then started thinking "how do you measure corruption"? I came across a 'corruption perception index (2017)'[1], which aggregates different measures of corruption across various sources, but sadly they have no data for either countries. Comparing them with neighbouring countries however, would put them right in the ball park of Malta. [1] https://www.transparency.org/news/feature/corruption_perceptions_index_2017#table https://www.transparency.org/news/feature/corruption_percept...
- matt4077 9y ago
  The "tax haven" business model only works for small countries: Malta, but also Luxembourg, the Caymans, Panama, and Ireland. If you can attract a significant slice of the world's wealth and somehow funnel just 1% into the local economy, that can be enough to provide generous services for a 6-digit population. But it obviously doesn't work for anything larger. My example of Ireland, above, is probably just on the threshold. And the model only worked for them because they also have a well-educated and english-speaking population, making it attractive for actual operations to be located in Dublin. The problem is, obviously, that this is an international zero-sum game. The US, Russia, and most EU countries provide all the infrastructure that allowed their citizen to earn the money, but the money leaves those countries as soon as the tax-man rings. Which is why the last decade has seen an assault on tax havens: Switzerland's bank secrecy laws have already been neutered, Panama has lost most trust with the recent leaks, and Ireland is forced to play nice by the EU. It's highly likely that oligarchs will soon run out of such locales, because it's becoming increasingly difficult to maintain both ingredients necessary for a tax haven: you need not only low taxation, but also robust rule-of-law. Those two goals come into conflict once the first is used to brand you an international pariah.
  - tCfD 9y ago
    > running out of tax havens But they are just getting started moving into bitcoin and cryptocurrencies, in the nick of time
  - CryptoPunk 9y ago
    >>The problem is, obviously, that this is an international zero-sum game. The US, Russia, and most EU countries provide all the infrastructure that allowed their citizen to earn the money, but the money leaves those countries as soon as the tax-man rings. This is a pretty baseless assumption. Most of the wealth is obviously produced in large countries with very significant natural and human resources, but we have no way to know if they would be producing more or less wealth if their tax burdens and governments were smaller. What evidence that exists suggests government significantly smaller than the norm in the developed world is better for economic development. If it is indeed the case that low taxes contribute to more global economic growth, then these tax havens are bolstering the world's economy rather than exploiting it in a zero sum way. >>Those two goals come into conflict once the first is used to brand you an international pariah. By the sounds of it, there is a concerted push by a large and powerful political faction to make it illegal for any country in the world to have low taxes, on the basis that a country exercising its sovereignty in this way is somehow victimizing and exploiting other countries.
- qubex 9y ago
  Iceland's population is about 300’000 and it's probably amongst the least corrupt (held the bankers to account) and most approachable (ministers’ direct phone numbers in phone books) I know of. Do not confuse corruption and integration into the community.
  - kzrdude 9y ago
    Are you Icelandic? Iceland is not free of corruption. https://icelandmonitor.mbl.is/news/politics_and_society/2016/10/18/eva_joly_iceland_has_a_corruption_problem/ https://icelandmonitor.mbl.is/news/politics_and_society/2016...
    - charlesdm 9y ago
      Being listed in the Panama Papers is the same as being corrupt now? Well well..
    - qubex 9y ago
      No I'm not. I'm hybrid British/Italian, suffering thirtyfive-plus years as a resident of the latter has taught me what real corruption and inefficiency look like. I've visited Iceland and found it to be quite amazing both in terms of landscape and society. Hence my reference. I don't think having some instances of corruption actually negates the core import of my statement.
    - brm 9y ago
      I'll never understand the portion of the population that reads a relative ranking and then declares that its not true because x still exists there... "amongst the least corrupt" != "free of corruption" It's like saying X is among the best schools in the region and sends the most children to university and someone rebutting the statement with "yeah, but billy went there and didn't graduate and didn't go to university." It's as if their brain is a computer program that's designed to purposely misinterpret information and then argue against the information for the sake of it. Sorry for the rant. This type of nonsense has been building, or least becoming more obvious, lately in the public and political spheres and I needed to flag it for my sanity.
walshemj 9y ago
You mean the second tier ones that Monaco wouldn't let in
catalinbraescu 9y ago
"unashamedly advertising all sorts of tax-haven services. Just... weird." Why would anyone be ashamed to advertise tax-haven services???
- chowells 9y ago
  Because they're fundamentally about maximizing personal gain regardless of the cost to society. This is in direct violation of the covenant upon which societies are founded. Most people take this violation as an immoral act.
  - sbmassey 9y ago
    By 'society' here, I take it that you mean the interests of large, highly taxed countries?
  - TomMarius 9y ago
    Most people in my country deem high taxes immoral.
  - ersii 9y ago
    Are you implying that public officials and the public sector is not trying to maximize their personal gain (regardless of the cost to society)? Which covenant is the founding of societies based upon? Please enlighten us.
- trevyn 9y ago
  Shame and phrases like “violation of the covenant upon which societies are founded” are tools used by people to try to convince you to do things that are in their best interest.

neaden 9y ago

I wonder if corruption is to some degree inevitable in any country this small. How do you deal with international companies and billionaires who are richer than your entire nation?

ajmurmann 9y ago
Hah, that's a fascinating point to me because I always thought small countries made corruption harder because everyone will know what's going on. I wonder if for the reasons you describe the is more corruption but it has less negative impact because everyone is watching and eventually gets paid off.
- garmaine 9y ago
  The trickle down effect of corruption is very real and noticeable on small island nations.
- barrkel 9y ago
  Small countries have small elites that are far more likely to have gone through the same educational institutions and run in the same social circles. A corruption of back-scratching at the top, where consequences and laws are for the little people, rather than a culture of pervasive bribery. Ireland is corrupt like this - not for major crimes, just lots of little things, like planning permission and speeding points on driving licenses. Nobody wants to make a big stink because everybody swims in the same small pond, and what goes around comes around. Here's a case study on the topic of speeding points: https://www.theguardian.com/media/greenslade/2013/oct/03/irish-independent-ireland https://www.theguardian.com/media/greenslade/2013/oct/03/iri... ; speeding points corruption is an ongoing political issue that has brought down multiple justice ministers, primarily due to the attempted coverups (trying to silence Maurice McCabe).
austroscot 9y ago
> How do you deal with international companies and billionaires who are richer than your entire nation? I think drawing correlations between country size/population/gdp/wealth and corruption is going to be difficult. However, arguably, looking at smaller countries we should see this trend at a similar rate. I'd suggest comparing with extremes: two, much smaller European countries. - Andorra; pop: ~90k, GDP per capita (2016, est.) ~36k USD - San Marino; pop: ~35k, GDP per capita (2017, est.) ~45k USD I spent a while looking in to them, but then started thinking "how do you measure corruption"? I came across a 'corruption perception index (2017)'[1], which aggregates different measures of corruption across various sources, but sadly they have no data for either countries. Comparing them with neighbouring countries however, would put them right in the ball park of Malta. [1] https://www.transparency.org/news/feature/corruption_perceptions_index_2017#table https://www.transparency.org/news/feature/corruption_percept...
matt4077 9y ago
The "tax haven" business model only works for small countries: Malta, but also Luxembourg, the Caymans, Panama, and Ireland. If you can attract a significant slice of the world's wealth and somehow funnel just 1% into the local economy, that can be enough to provide generous services for a 6-digit population. But it obviously doesn't work for anything larger. My example of Ireland, above, is probably just on the threshold. And the model only worked for them because they also have a well-educated and english-speaking population, making it attractive for actual operations to be located in Dublin. The problem is, obviously, that this is an international zero-sum game. The US, Russia, and most EU countries provide all the infrastructure that allowed their citizen to earn the money, but the money leaves those countries as soon as the tax-man rings. Which is why the last decade has seen an assault on tax havens: Switzerland's bank secrecy laws have already been neutered, Panama has lost most trust with the recent leaks, and Ireland is forced to play nice by the EU. It's highly likely that oligarchs will soon run out of such locales, because it's becoming increasingly difficult to maintain both ingredients necessary for a tax haven: you need not only low taxation, but also robust rule-of-law. Those two goals come into conflict once the first is used to brand you an international pariah.
- tCfD 9y ago
  > running out of tax havens But they are just getting started moving into bitcoin and cryptocurrencies, in the nick of time
- CryptoPunk 9y ago
  >>The problem is, obviously, that this is an international zero-sum game. The US, Russia, and most EU countries provide all the infrastructure that allowed their citizen to earn the money, but the money leaves those countries as soon as the tax-man rings. This is a pretty baseless assumption. Most of the wealth is obviously produced in large countries with very significant natural and human resources, but we have no way to know if they would be producing more or less wealth if their tax burdens and governments were smaller. What evidence that exists suggests government significantly smaller than the norm in the developed world is better for economic development. If it is indeed the case that low taxes contribute to more global economic growth, then these tax havens are bolstering the world's economy rather than exploiting it in a zero sum way. >>Those two goals come into conflict once the first is used to brand you an international pariah. By the sounds of it, there is a concerted push by a large and powerful political faction to make it illegal for any country in the world to have low taxes, on the basis that a country exercising its sovereignty in this way is somehow victimizing and exploiting other countries.
qubex 9y ago
Iceland's population is about 300’000 and it's probably amongst the least corrupt (held the bankers to account) and most approachable (ministers’ direct phone numbers in phone books) I know of. Do not confuse corruption and integration into the community.
- kzrdude 9y ago
  Are you Icelandic? Iceland is not free of corruption. https://icelandmonitor.mbl.is/news/politics_and_society/2016/10/18/eva_joly_iceland_has_a_corruption_problem/ https://icelandmonitor.mbl.is/news/politics_and_society/2016...
  - charlesdm 9y ago
    Being listed in the Panama Papers is the same as being corrupt now? Well well..
  - qubex 9y ago
    No I'm not. I'm hybrid British/Italian, suffering thirtyfive-plus years as a resident of the latter has taught me what real corruption and inefficiency look like. I've visited Iceland and found it to be quite amazing both in terms of landscape and society. Hence my reference. I don't think having some instances of corruption actually negates the core import of my statement.
  - brm 9y ago
    I'll never understand the portion of the population that reads a relative ranking and then declares that its not true because x still exists there... "amongst the least corrupt" != "free of corruption" It's like saying X is among the best schools in the region and sends the most children to university and someone rebutting the statement with "yeah, but billy went there and didn't graduate and didn't go to university." It's as if their brain is a computer program that's designed to purposely misinterpret information and then argue against the information for the sake of it. Sorry for the rant. This type of nonsense has been building, or least becoming more obvious, lately in the public and political spheres and I needed to flag it for my sanity.

walshemj 9y ago

You mean the second tier ones that Monaco wouldn't let in

catalinbraescu 9y ago

"unashamedly advertising all sorts of tax-haven services. Just... weird." Why would anyone be ashamed to advertise tax-haven services???

chowells 9y ago
Because they're fundamentally about maximizing personal gain regardless of the cost to society. This is in direct violation of the covenant upon which societies are founded. Most people take this violation as an immoral act.
- sbmassey 9y ago
  By 'society' here, I take it that you mean the interests of large, highly taxed countries?
- TomMarius 9y ago
  Most people in my country deem high taxes immoral.
- ersii 9y ago
  Are you implying that public officials and the public sector is not trying to maximize their personal gain (regardless of the cost to society)? Which covenant is the founding of societies based upon? Please enlighten us.
trevyn 9y ago
Shame and phrases like “violation of the covenant upon which societies are founded” are tools used by people to try to convince you to do things that are in their best interest.