India’s lost $128 b in illicit capital outflow in a decade; China $ 2.74 t

WASHINGTON: A staggering $128 billion in capital illegally flowed out of India in the last decade, making the country the 15th largest victim of illicit financial outflows that cost developing countries $903 billion in 2009, a new study says.

The study comes as New Delhi announced it would bring out a white paper on black money stashed away in tax havene abroad. Indian Finance Minister Pranab Mukherjee Wednesday said the government will soon introduce a bill to strengthen anti-money laundering laws.

While $903 billion marks a drop from the $1.55 trillion that illicitly flowed out of the developing world in 2008, the study finds the decrease almost entirely attributable to the global financial crisis than any governance improvement or economic reforms.

“This is a breathtakingly large sum at a time when developing and developed countries alike are struggling to make ends meet,” said Raymond Baker, director of research and advocacy organization Global Financial Integrity GFI.

“This report should be a wake up call to world leaders that more must be done to address these harmful outflows.”

Entitled “Illicit Financial Flows from Developing Countries over the Decade Ending 2009”, the report tracks the amount of illegal capital flowing out of 157 developing countries from 2000 to 2009.

According to the report, the 20 biggest victims of illicit financial flows over the decade are: China $2.74 trillion, Mexico $504 billion, Russia $501 billion, Saudi Arabia $380 billion, Malaysia $350 billion, United Arab Emirates $296 billion, Kuwait $271 billion, Nigeria $182 billion, Venezuela $179 billion, Qatar $175 billion, Poland $162 billion, Indonesia $145 billion, the Philippines $142 billion, Kazakhstan $131 billion, India $128 billion, Chile $97.5 billion, Ukraine $95.8 billion, Argentina $95.8 billion, South Africa $85.5 billion and Turkey $79.1 billion.

Mukherjee told the Indian parliament that tax treaties with 60 out of 75 countries had been amended and this would enable the government track black money.

He added there were various estimates of black money available ranging from $500 billion to $1,900 billion.