The real size of Offshore Financial Centres

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Political InsightIn an article for the “In Focus” section of Political Insight (December 2013, Volume 4, Issue 3) Jan Fichtner of the University of Frankfurt a.M. and I analysed the size of the foreign assets in the world’s largest offshore financial centres. All ‘offshore financial centres’ (OFCs) have one characteristic feature in common; they offer very low tax rates and lax regulations to non-residents with the aim to attract foreign financial assets. OFCs essentially undercut ‘onshore’ jurisdictions at their expense. The main beneficiaries are high-net-worth individuals and large multinational corporations that have the capital and expertise required to utilise OFCs. Beyond its geographical connotation the phenomenon of ‘offshore’ represents a withdrawal of public regulation and control, primarily over finance. Some important OFCs are in fact located ‘onshore’, e.g. Delaware in the USA and the City of London in the UK. However, historically many OFCs have literally developed ‘off-shore’, mostly on small islands.
OFCs as defined by Zoromé (2007) are jurisdictions that provide financial services to non-residents on a scale that is excessive compared to the size and the financing of their domestic economies. The graphic shows combined data on securities (Coordinated Portfolio Investment Survey by the IMF) and on deposits/loans (Locational Banking Statistics by the BIS) at the end of 2011. Capturing the two by far most important components of financial centres allows a reasonable approximation of the real size of OFCs while avoiding double counting. The larger the size of the circles on the map, the more foreign financial assets have been attracted to the particular jurisdiction. The vast majority of the almost US$70 trillion foreign financial assets are concentrated in North America, Europe and Japan. Areas with assets below $US50bn are not shown for their relative insignificance in the global context.

Offshore Financial Centres

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European Identities: The 2013 Eurovision song contest

Political InsightThe Eurovision song contest voting patterns is a popular theme for the analysis of European identity and culture. In an article for the “In Focus” section of Political Insight (September 2013, Volume 4, Issue 2) Dimitris Ballas, Danny Dorling and I looked at the voting patterns of this year’s contest that was held in Malmö (Sweden). It has long been argued that there are clear patterns based on geographical region as well as cultural and linguistic bonds and there has typically been labelling of groups of countries that give their votes to each other as ‘blocs’ such as the ‘Scandinavian bloc’, the ‘Mediterranean’, ‘Western’, ‘Eastern’, ‘Scandinavian’, the ‘Balkan’ bloc etc. It can also be argued that political considerations may also affect these voting patterns and this may be particularly interesting in the recent Eurovision song context with voting patterns possibly influenced by the on-going political and economic crisis in the European Union (EU). This map series puts a focus on those countries being closely associated with the EU, either by being current members or official candidate member states (or official potential candidate for EU accession) and/or signed up to any of the following agreements: European Economic Area, the Schengen Zone, the European Monetary Union. The maps are based on European states that currently meet at least one of these criteria, leaving the remaining participants of the song contest aside.

Map of the 2013 Eurovision Voting Patterns

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In Focus: The World’s Billionaires

Political InsightIn an article for the “In Focus” section of Political Insight (April 2013, Volume 4, Issue 1) Danny Dorling and I looked at the global geography of wealth. The map that I created for this feature displays data published by Forbes Magazine in spring 2012 (updated annualy). For 2012 Forbes counted 1153 billionaires across the globe (this figure includes families, but excludes fortunes dispersed across large families where the average wealth per person is below a billion). The total wealth of the billionaires was US$3.7 trillion – as great as the annual gross domestic product of Germany. Top of this league table is the US with 424 billionaires (or billionaire families), followed by Russia (96) and China (95). The following cartogram animation shows, how the distribution of billionaires and the distribution of their total wealth compares. Although there are only small changes between the two maps, it is quite apparent that the wealthiest in the wealthier parts of the world accumulate slightly higher shares of wealth than those living in the emerging economies such as China (though this may be some of the less worrying inequalities that exist globally):

Map animation of the distribution of the World's billionaires and their personal wealth
(click for larger version)

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A Military World

World military spending for 2011 is estimated to be over $1.7 trillion at current prices, and has come to a relative stagnation after it has been steadily rising in recent years. As summarised on the Global Issues website, “the 15 countries with the highest spending account for over 81% of the total; The USA is responsible for 41 per cent of the world total, distantly followed by the China (8.2% of world share), Russia (4.1%), UK and France (both 3.6%).” The data cited here comes from the SIPRI Military Expenditure Database compiled by the Stockholm International Peace Research Institute who use publicly available data sources for its reports. Military expenditure is defined asall current and capital expenditure on: (a) the armed forces, including peacekeeping forces; (b) defence ministries and other government agencies engaged in defence projects; (c) paramilitary forces, when judged to be trained and equipped for military operations; and (d) military space activities. Such expenditures should include: (a) military and civil personnel, including retirement pensions of military personnel and social services for personnel; (b) operations and maintenance; (c) procurement; (d) military research and development; and (e) military aid (in the military expenditure of the donor country). Civil defence and current expenditures on previous military activities, such as veterans’ benefits, demobilization, conversion and weapon destruction are excluded.
SIPRI’s long term observations show how the decrease in military spending following the end of the cold war in the 1990s slowed down at the turn of the century, and has significantly been rising again over the last 10 years – now exceeding the levels of the 1980. A major impact on these figures has the revival of military spending in North America, as the regional breakdown of the data shows. Compared to that, the rise of Asia appears much less significant than one would expect, although the region is clearly gaining importance (see an interactive graphic of the data on the Guardian datablog).
The following cartogram uses the latest available figures of military expenditure from the 2012 update of the database, completed by own estimates for the missing countries. It shows the estimate absolute expenditure in current (2011) US$ for the year 2011:

Cartogram / Map of the global military expenditure
(click for larger version)

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Born abroad: A look at the Population of the UK

According to a BBC News feature, “trends in migration are changing. Once, migrants from the same country tended to cluster in areas where they had relatives or friends. But new maps of England and Wales, reveal that for more recent migrants this is no longer the case” The maps of which this quote speak are a short series of cartograms created in collaboration of the BBC with the University of Sheffield in which we took a look at the first set of data from the 2011 Census in the United Kingdom (with much more detailed statistics due early next year). This is how some of the trends analysed by the BBC look like, using a gridded population cartogram of the country as a basemap for the lower maps shown here:

Cartogram / Map series of people born abroad according to the 2011 UK Census

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