India with $94.76 billion was also the third largest exporter of illicit capital in 2012, the most recent year included in the annual update of illicit financial flows released Tuesday by Global Financial Integrity (GFI), a Washington -based research and advisory organization.
A record $991.2 billion in illicit capital flowed out of developing and emerging economies in 2012-facilitating crime, corruption, and tax evasion, said the report on “Illicit Financial Flows from Developing Countries: 2003-2012,”
It marked a dramatic increase from 2003, when illicit outflows totaled a mere $297.4 billion.
The report pegs cumulative illicit outflows from developing economies at $6.6 trillion between 2003 and 2012, the latest year for which data is available.
According to the report, the five biggest exporters of illicit financial flows over the decade are: China $1.25 trillion, Russia $973.86 billion, Mexico $514.26 billion, India $439.59 billion and Malaysia $394.87 billion.
GFI also found that the top exporters of illegal capital in 2012 were: China $249.57 billion, Russia $122.86 billion, India $94.76 billion, Mexico $59.66 billion and Malaysia $48.93 billion
The report found that illicit outflows are growing at an inflation-adjusted 9.4 percent per year-roughly double global GDP growth over the same period.
“As this report demonstrates, illicit financial flows are the most damaging economic problem plaguing the world’s developing and emerging economies,” said GFI President Raymond Baker.
“These outflows-already greater than the combined sum of all FDI and ODA flowing into these countries-are sapping roughly a trillion dollars per year from the world’s poor and middle-income economies,” he said.
“It’s extremely troubling to note just how fast illicit flows are growing,” stated GFI Chief Economist Dev Kar, the principal author of the study.
These outflows are growing fastest in and taking the largest toll-as a share of GDP-on some of the poorest regions of the world, he noted.
“These findings underscore the urgency with which policymakers should address illicit financial flows,” Kar said.