It has always been one of the great ironies of international development that some of the poorest countries on earth have the greatest riches. Many African, Asian and South American nations have vast reserves of natural resources. So why don’t they get more of the profits from exploiting them? ... the key problem is tax avoidance by international companies.
— (Savior Mwambwa of the Centre for Trade Policy and Development in Zambia in an interview with the BBC 9 March 2012)

A few weeks ago Fiona and I were involved with the Micah Challenge Voices for Justice conference in Canberra.  I started blogging about some of the issues we were confronted with there…sorry for those who have been eagerly awaiting the next instalment! 

In the last blog (read it here) I brought up the concept of tax avoidance or dodging, and the impact that these business practices are having on developing countries.  As I was reading into it more, one of the case studies really hit home for me.  

Last year, I had the privilege to travel to Zambia with World Vision to see the amazing impact they are having in helping local communities. One of the things pressed home for me during this trip was how systemic some of the underlying issues were.  We had the opportunity to meet with some of the local government officials in the Kaoma / Luampa region.  These people had such a heart to see their communities supported and developed, but were really limited in their capacity to implement changes because they just didn’t have the money to do things.  They were so appreciative of World Vision and the other NGO’s, who’s support and finances made some of these things possible - for example, the regions best medial services were provided by the local mission hospital.  But they still dreamed of so much more that could be done.

One of the big issues (among many) in Zambia is that a majority of local trade happens in the 'informal economy’.  One thing that really struck me was that even with over 50% unemployment, in our two weeks there I would have seen no more than 5 beggers.  The people have amazing initiative…on every road were makeshift stalls selling anything you could want…from food and clothes to sunglasses and phone chargers, to tyres and building supplies!  One enduring image was the man who was selling shoes amongst the peak hour traffic…running alongside a car as the driver tried one on!    But an issue with this informal economy it that it generates no tax income for public services like education and health.

But the problem isn’t just a domestic issue - Zambia has a wealth of natural resources, and plenty of foreign ‘investment’.  However, due to tax avoidance practices, much of this resource wealth benefits the foreign investors more than the Zambians themselves.

In February 2012, the Government of Zambia announced an audit of mining companies operating in that country, believing it was owed up to a $1 billion in unpaid taxes. According to Christian Aid more than half of the copper exported from Zambia in 2008 was supposedly sent to the tax haven of Switzerland, but Swiss import data shows no Zambian copper passed through that country.

Read the complete article here...

You might think this sounds pretty extreme?  It is...but it is also 'normal business practice' and is played out in similar ways all across the world.  In the words of Eric Schmidt (Google CEO - 'Don't be Evil') "It's called capitalism.  We are proudly capitalistic.  I'm not confused by this."  So is he there nothing evil about this?  What has this got to do with God and worship?  And what difference can you make in an issue so widespread and deeply entrenched in our culture?We'll explore these issues in the next post...