With the Hudson Institute's Kleptocracy Initiative, I looked through new numbers on illicit financial flows (IFFs) - and the remarkable damage they continue to bring:
Despite increased international attention, the global growth of IFF outflows, as the [Global Financial Integrity] report lays out, have remained steady over the past half-dozen years – while the expansion of IFF inflows kept even over the decade GFI studied. And given the magnitude of the IFFs involved, it’s difficult to over-estimate the fallout of such trajectory, especially in the developing countries in question.
Not only have such IFFs allowed the explosion of trade in transnational crime – also valued in the trillions – but they’ve done untold damage to domestic development. As Salomon and Spanjers note, the IFFs uncovered in the report may represent “tax revenues lost by developing country governments which would then be unavailable for use by those governments toward reducing inequality, eliminating poverty, and, more generally, raising the quality of life for people living in those countries.” Enhancing networks of corruption, encouraging governmental malfeasance, straining already straitened oversight bodies – the fallout from such IFFs reaches wide, undercutting any and all poverty-reduction or good governance programs elsewhere. And as long as such IFFs remain, the report continues, “such social corrosion exacerbates the deterioration, making it more and more difficult for a country to achieve and sustain adequate living standards for its citizens.”