Abetting Poverty, Drugs, and Terrorism
Illicit Financial Flows
Most of the discussion on development, especially for Africa, assumes that there are rich countries and poor countries and that development requires that the rich countries provide more funding and assistance to the poor ones. That may be so. Less understood by far, however, is the amount of money conveyed annually from the poor countries to the rich ones through illicit financial transactions: funds that are illegally generated, transferred, or used.
On June 28, at a conference co-sponsored by the CSIS Hills Program on Governance and the Global Financial Integrity Program at the Center for International Policy, nearly 200 participants gathered at CSIS to discuss what is known about these flows, how they are generated, how they work, how they affect development, and what can be done to reduce them. A conservative estimate of illicit cross-border flows – inherently an estimate because these are, after all, illicit flows – is that they amount to between $1 trillion and $1.6 trillion annually, and $500 billion to $800 billion of that amount (around 50 percent) is conveyed each year from poor countries to rich ones. That is 8 to 10 times the amount of official development assistance (ODA) provided by the rich countries to the poor ones, and much of ODA is in the form of salaries and other expenses paid for “technical assistance” to citizens of the rich countries.