Corruption in developing countries diminishes their funding by billions

Crime, corruption, and tax evasion are the three areas where developing countries lose money for their citizens. In 2011 up to USD$946.7 billion was drained from developing countries (an increase of 13.7% on 2010 figures) through illicit financial outflows reports the Global Financial Integrity (GFI), a Washington-based research organization (Caucasian Business Week, December 30, 2013). These figures were based on 150 countries.

From 2002 to 2011, GFI estimates that USD$5.9 trillion was the cumulative amount of illicit funds that left developing countries. The money flows out of countries through the illicit underworld. Anonymous shell companies, tax havens, and trade-based money-laundering techniques are the main avenues for the departure of almost 6 trillion dollars since 2002, and almost a trillion dollars in 2011.

GFI says that global action has begun to look at this problem, but more needs to be done to prevent money leaving the countries that need it the most. The illicit outflow significantly outpaces their GDP growth.

For example, the United States alone supported the 150 countries of the GFI study to the amount of USD$93.8 billion in 2011 – hence the drain of USD$946.7 billion in 2011 is ten times this amount.

As poor countries keep hemorrhaging vast sums of money from their economies, it places more strain on their social services, such as health care and education, as well as local businesses and infrastructure.

GFI's research ranked 150 countries in terms of the volume of illicit capital outflowing over the 10-year period from 2002 to 2011. According to the report, the 25 largest exporters of illicit funds over the decade were, in order (cumulative amount in USD): (1) China ($1.1 trillion), (2) Russia ($881.0 billion), (3) Mexico ($462.0b), (4) Malaysia ($370.4b), (5) India ($343.9b), (6) Saudi Arabia ($266.4b), (7) Brazil ($192.7b), (8) Indonesia ($181.8b), (9) Iraq ($178.8b), (10) Nigeria ($142.7b), (11) Thailand ($140.9b), (12) UAE ($114.6b), (13) South Africa ($100.7b), (14) Philippines ($88.9b), (15) Costa Rica ($80.7b), (16) Belarus ($75.1b), (17) Qatar ($62.6b), (18) Poland ($49.4b), (19) Serbia ($49.3b), (20) Chile ($45.2b), (21) Paraguay ($40.1b), (22) Venezuela ($39.0b), (23) Brunei ($38.3b), (24) Panama ($38.1b), and Turkey ($37.3b).

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