September 17, 2007
Tom Cardamone
WASHINGTON, DC – Global Financial Integrity (GFI) welcomes the World Bank’s pending study on illicit financial flows out of developing countries and thanks the Norwegian government for its important contributions to this research. GFI has been the leading organization calling for such a study, most recently at a conference titled “Illicit Financial Flows: The Missing Link in Development” held on June 28.
GFI Director Raymond Baker said today that by agreeing to conduct this study Robert Zoellick “has indicated his understanding of the devastating impact illicit financial flows have on development and his willingness to address the issue early in his term.”
GFI estimates that between $500 billion and $800 billion exits developing economies annually. Indeed, for every dollar of foreign aid flowing into developing countries an estimated ten dollars in illicit money flows out. This outflow of capital from developing nations constitutes the most damaging economic condition hurting the poor today.
The World Bank study is significant because:
- The Bank has recognized the devastating roll illicit financial flows have on development;
- This is the first time the Bank has committed itself to studying the entire global financial equation for development, and;
- The coordination between the Bank, the U.N. and the Norwegian government indicates that stemming illicit financial flows is now on the global economic agenda.
Baker also noted that with World Bank leadership “it is hoped that the G-8, OECD, WTO and other international economic organizations will soon begin work to stem the flow of illicit money out of developing countries.”