July 24, 2008
Monique Perry Danziger, +1 202 293 0740 ext. 222
Global Financial Integrity
Monique Perry Danziger, +1 202 293 0740 ext. 222
WASHINGTON, DC – The Democratic Republic of Congo (DRC) lost an estimated $15.5 billion due to capital flight from 1980 to 2006, according to a new report from Global Financial Integrity (GFI), a program of the Center for International Policy. The report was prepared using data from the International Monetary Fund and World Bank and represents the most up-to-date figures for illicit capital outflow from the DRC.
According to the report, “pervasive corruption,” and trade mispricing in goods and services led to a per annum loss of nearly $600 million dollars from the DRC economy. Notes the report’s author, lead economist Dev Kar, “With that money, the DRC could have paid off its entire external debt, which is $11.2 billion.”
The developing world loses $500 to $800 billion per year due to illicit financial outflows,” said GFI director Raymond Baker. “Recognizing and curtailing this massive capital loss is critical to combating poverty and fostering economic prosperity in poor and developing nations.”
“The DRC is a textbook example of what international development experts call the ‘paradox of plenty,’” said Baker. “Although the DRC is a resource-rich nation, possessing 80 per cent of the world’s Coltan and 10 per cent of its copper, as well as diamonds, gold, and oil, 80 per cent of the Congolese population live in abject poverty.”
GFI director Raymond Baker met with 50 high-level finance and academic representatives in Kinshasa this week to present the report’s findings and discuss strategies for curtailing capital flight out the DRC.
“This study illustrates a reality facing many poor countries and the international development community: capital flight undermines economic development and poverty alleviation efforts and makes poor countries more poor,” said Baker. “With rising commodity prices giving rise to fears of a global poverty crisis it is critical we take steps to address this problem and implement measures to curtail illicit financial outflows from these countries.”
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Notes to Editors: