India 4th Largest In Asia For Illicit Money Flows: Report

WASHINGTON, (Bernama) — India is Asia’s fourth largest exporter of illicit capital with an estimated outflow of a whopping US$104 billion between 2000 and 2008, according to a US-based think tank, Press Trust of India (PTI) reported Monday.

[Compare this to:

Malaysia is world’s No 5 in illicit outflows in Malaysiakini or Malaysia is world’s No 5 in illicit outflows in – MTadmin]

According to figures of illicit flow of money released, China tops the list and is several times that of India.

Between 2000 to 2008, Global Financial Integrity (GFI) estimated that the outflow of illicit money from China was US$2.2 trillion.

The report ranks countries according to magnitude of outflows with China ranking at the top followed by Russia (US$427 billion), Mexico (US$416 billion), Saudi Arabia (US$302 billion) and Malaysia (US$291 billion).

In the report titled ‘Illicit Financial Flows from Developing Countries: 2000-2009’, released Tuesday, GFI, a Washington-based think tank said that top five Asia continues to produce the largest portion of illicit flows, almost half-trillion dollars in 2008 alone, PTI quoted as saying.

The five countries are China, Malaysia, Philippines (US$109 billion), while both Indonesia and India are ranked fourth with US$104 billion each, respectively.

On an average, these five countries account for 96.5 per cent of total illicit flows from Asia and 44.9 per cent of flows out of all developing countries.

However, it said that these (Asia region compared to total developing world) shares have been declining; the top five Asian countries transferred 36.9 per cent of illicit flows from all developing countries in 2008, down from 53.3 per cent in 2000.

“India, which was the fifth largest exporter of illicit capital in the 2008 IFF Report is now ranked 15th among developing countries,” the report said.

The think tank says there are three main reasons why average illicit flows from India slipped in the country rankings.

The first reason is that the illicit outflows from several oil producers such as the United Arab Emirates, Kuwait, Venezuela, Qatar, Nigeria, Kazakhstan, and Indonesia (in that order) now outpace those from India.

Secondly, there were substantial inflows of illicit capital into India (mostly through the balance of payments but also through trade mispricing) that were set to zero under the gross outflows method.

And finally, the United Arab Emirates and Qatar, which have the sixth and ninth highest average illicit outflows respectively, were excluded from the 2008 IFF Report because of lack of balance of payments and debt data, it explained.

According to the report, bribery, theft, kickbacks, and tax evasion were the greatest conduit for the illicit financial flows from the major exporters of oil such as Kuwait, Nigeria, Qatar, Russia, Saudi Arabia, the United Arab Emirates, and Venezuela.

Oil exporting countries like Russia, the United Arab Emirates, Kuwait, and Nigeria, are becoming more important as sources of illicit capital, it said.

“Every year developing countries are losing ten times the amount of Official Development Assistance (ODA) remitted for poverty alleviation and economic development,” said GFI director Raymond Baker.