Study Finds Crime, Corruption, Tax Evasion Drained $946.7bn from Developing Countries in 2011

Findings

 The US$946.7 billion of illicit outflows lost in 2011 is a 13.7 percent uptick from 2010—which saw developing countries hemorrhage US$832.4 billion—and a dramatic increase from 2002, when illicit outflows totaled just US$270.3 billion.  The study estimates the developing world lost a total of US$5.9 trillion over the decade spanning 2002 through 2011.

“It’s extremely troubling to note just how fast illicit flows are growing,” stated Dr. Kar.  “Over the past decade, illicit outflows from developing countries increased by 10.2 percent each year in real terms—significantly outpacing GDP growth.  This underscores the urgency with which policymakers should address illicit financial flows.”

Moreover, the US$946.7 billion that flowed illicitly out of developing countries in 2011 was approximately 10 times the US$93.8 billion [XLS | 49 KB] of net official development assistance (ODA) that went into these specific 150 developing countries that year. This means that for every US$1 in economic development assistance going into a developing country, roughly US$10 of capital are lost via illicit outflows.

“Illicit financial flows have major consequences for developing economies,” explained Mr. LeBlanc, the co-author of the report.  “Poor countries hemorrhaged nearly a trillion dollars from their economies in 2011 that could have been invested in local businesses, healthcare, education, or infrastructure.  This is nearly a trillion dollars that could have been used to help pull people out of poverty and save lives.  Without concrete action, the drain on the developing world is only going to grow larger.”

Dr. Kar and Mr. LeBlanc’s research tracks the amount of illegal capital flowing out of 150 different developing countries over the 10-year period from 2002 through 2011, and it ranks the countries by the volume of illicit outflows. According to the report, the 25 biggest exporters of illicit financial flows over the decade are:

1. China ………………………. US$107.56 billion average ($1.08 trillion cumulative)
2. Russia……………………………………. US$88.10 billion avg. ($880.96 billion cum.)
3. Mexico …………………………………… US$46.19 billion avg. ($461.86 billion cum.)
4. Malaysia ……………………………….. US$37.04 billion avg. ($370.38 billion cum.)
5. India ………………………………………. US$34.39 billion avg. ($343.93 billion cum.)
6. Saudi Arabia………………………….. US$26.64 billion avg. ($266.43 billion cum.)
7. Brazil …………………………………….. US$19.27 billion avg. ($192.69 billion cum.)
8. Indonesia ………………………………. US$18.18 billion avg. ($181.83 billion cum.)
9. Iraq ………………………………………… US$15.76 billion avg. ($78.79 billion cum.)¹
10. Nigeria ………………………………….. US$14.23 billion avg. ($142.27 billion cum.)
11. Thailand ……………………………….. US$14.09 billion avg. ($140.88 billion cum.)
12. United Arab Emirates ………….. US$11.46 billion avg. ($114.64 billion cum.)²
13. South Africa …………………………… US$10.07 billion avg. ($100.73 billion cum.)
14. Philippines ………………………………… US$8.89 billion avg. ($88.87 billion cum.)
15. Costa Rica ………………………………… US$8.06 billion avg. ($80.65 billion cum.)
16. Belarus ……………………………………… US$7.51 billion avg. ($75.09 billion cum.)
17. Qatar ……………………………………….. US$6.28 billion avg. ($62.82 billion cum.)²
18. Poland ………………………………………. US$4.94 billion avg. ($49.39 billion cum.)
19. Serbia ……………………………………….. US$4.94 billion avg. ($49.37 billion cum.)
20. Chile ………………………………………….. US$4.52 billion avg. ($45.20 billion cum.)
21. Paraguay …………………………………… US$4.01 billion avg. ($40.12 billion cum.)
22. Venezuela …………………………………. US$3.90 billion avg. ($38.97 billion cum.)
23. Brunei ………………………………………. US$3.84 billion avg. ($38.37 billion cum.)²
24. Panama …………………………………….. US$3.81 billion avg. ($38.09 billion cum.)
25. Turkey ……………………………………….. US$3.73 billion avg. ($37.28 billion cum.)

Link to detailed report: click here