Emerging countries lost $946.7 billion to fraud, corruption and illicit business transactions in 2011, up 13.7% from $832.4 billion in 2010. That’s a tremendous increase from 2002, when dirty money totaled only $270.3 billion. The illicit money leaving emerging countries totaled $5.9 trillion between 2002 and 2011, according to a report by Global Financial Integrity (GFI). Asian countries were the largest exporters of illegal money in the ten year period, accounting for more than 40% of total illegal money outflows.

Emerging Countries

Emerging countries lose more than they receive

The emerging countries lost a lot more money than they received in foreign aid. In 2011, they lost $10 for every $1 they received in economic assistance. GFI president Raymond Baker said in a statement that the illicit underworld is thriving by attracting dirty money from emerging countries at a time when the global economy is under stress. GFI’s findings fetched attention of G20 nations that are struggling to recover from the 2008-09 financial crisis. Developed nations have witnessed the rising gap between rich and poor.

The Middle East and North Africa (MENA) has witnessed the fastest increase in illicit money outflows. Dirty money from these countries grew at a 31.5% annual rate between 2002 and 2011. Sub-Saharan Africa came second, with 20.2% annual increase in illegal money outflows during the ten year period.

Dirty money growing faster than emerging countries’ GDP

In 2011, Russia saw the biggest illicit capital outflow in 2011 as the country lost $191.14 billion. China came second with $151.35 billion, followed by India at $84.93 billion. Between 2002-2011, China topped the list with $1.08 trillion in illicit capital outflow. Russia sent $880.96 billion in the same period. Mexico was ranked third with $461.86 billion, followed by Malaysia with $370.38 billion and India with a total of $343.04 billion. Malaysian media demanded the prime minister Datuk Seri Najib Razak leave the post of finance minister after the ‘disgraceful’ report.

Among the top 15 exporters of illegal money, one is from the Middle East (Iraq), two from the Americas (Mexico and Brazil), four from Europe (Russia, Serbia, Poland, Belarus), two from Africa (South Africa and Nigeria), and six from Asia (China, Indonesia, India, Malaysia, the Philippines and Thailand).

Over the ten year period, the dirty money outflow has increased at a 10.2% annual rate, much higher than the GDP growth rate of emerging countries.