Nobel award-winning economist Joseph Stiglitz has suggested, in an apparent reference to Panama, that the U.S. and Europe should stop doing business with countries that refuse to provide transparent financial systems.
Stiglitz’s suggestion comes barely weeks after he resigned from a committee set up to help Panama shake off its stigmatic reputation as a tax haven.
The committee is assigned with the task of reviewing practices in Panama’s financial industry and recommending to the government how to fix the system. For Panama, Stiglitz’s resignation has only strengthened the foreigners’ suspicion over its financial industry.
In an article posted by Time, the reputed economist said he stepped down from the seven-member committee after the Panamanian government demanded the final say on the committee’s assigned report.
Panamanian officials agreed to cooperate, but the government refused when some members insisted that the report should be made public regardless of its findings.
Swiss anti-corruption expert Mark Pieth also resigned along with Stiglitz, but remaining members of the committee, the majority of whom are Panamanian officials, have vowed to continue their task.
Panama has long been suspected of being a tax haven, suspicions that were confirmed when the International Consortium of Investigative Journalists helped to uncover the Panama Papers, a massive cache of incriminating documents handled by the Panamanian law firm Mossack Fonseca. This scandal showed the world how the rich and powerful set up dubious companies in tax havens in an apparent effort to evade tax in their home country.
Perhaps Panama was worried that the committee would recommend to the government to disclose the actual beneficiaries of all companies registered in the country, says Stiglitz. Such an act, he wrote, would have undermined Panama’s business model, dissuading foreigners from attempting to launder their money in the Central American country.