Illicit financial flows (IFFs) from developing and emerging economies kept pace at nearly US$1 trillion in 2014, according to a study released today by Global Financial Integrity (GFI), a Washington, DC-based research and advisory organization. The report pegs illicit financial outflows at 4.2-6.6 percent of developing country total trade in 2014, the last year for which comprehensive data are available.
Titled “Illicit Financial Flows to and from Developing Countries: 2005-2014,” the report is the first global study at GFI to equally emphasize illicit outflows and inflows. Each is found to have remained persistently high over the period between 2005 and 2014. Combined, these outflows and inflows are estimated to account for between 14.1 and 24.0 percent of developing country trade, on average.
“The order of magnitude of these estimates, much more so than their exactitude, warrants serious attention in both the developing countries and the wealthier world,” said GFI President Raymond Baker, a longtime authority on financial opacity. “Years of experience with businesses and governments in the developing world have taught us that the decision to bring illicit flows into a particular developing country often marks only the first phase of a strategy to subsequently move funds out of the country. Together, illicit inflows and outflows sap the crucial financial resources needed to reach the Sustainable Development Goals.”
Published on GFI on May 1, 2017.