Pakistan 109th, India placed 4th in illicit financial flows

Published: December 10, 2015



Developing and emerging economies lost as much as $7.8 trillion in illicit financial flows during the period between 2004 and 2013, according to the report of a US-based think-tank, with $1.917 billion being whisked away from Pakistan.

It put Pakistan at 109th place among 149 countries in the list of “biggest exporters of illicit capital over the decade”. The country lost around 2.3% of GDP due to illegal financial flows, according to the report.

Pakistan’s economy enjoying period of optimism: report

China Mainland ($1.392 trillion), Russian Federation ($1.05 trillion), Mexico ($528.44 billion), India ($510.29 billion) and Malaysia ($418.54 billion) occupied the top five places after contributing the most in illicit financial flows during the period.

The December 2015 report from Global Financial Integrity (GFI), a Washington based research and advisory organisation, shows that illicit outflows increased at an average rate of 6.5% per year-nearly twice as fast as global GDP

These findings also estimate that $1.1trillion was whisked away from developing countries in 2013 alone, reflecting a steady upward trend as illegal flows grew from $465 billion in 2004.

Pakistan now 138th among 189 economies

To conduct the study, analysts looked at balance of payments data and direction of trade statistics (DOTS), as reported to the IMF, in order to detect flows of capital that are illegally earned, transferred or utilised.

Examples of illegitimate money outflows include corrupt government officials transferring money abroad, importers using trade mis-invoicing to evade customs duties, drug cartel trying to launder dirty money and terrorists wiring money abroad to finance operations.

According to the GFI’s findings, illicit outflows peaked in Pakistan in 2010 with a balance of $729 million. This was followed by 2012 and 2013 with illegal flows amounting to $405 million and $529 million, respectively.

The World Bank’s message

GFI provided a list of recommendations to better equip authorities to battle illicit flows. The list included the establishment of public registries of verified beneficial ownership information on all legal entities, significantly boosting customs enforcement by equipping and training officers to better detect intentional misinvoicing of trade transactions and treatment by customs agencies of trade transactions involving a tax haven with the highest level of scrutiny.

Published in The Express Tribune, December 10th,  2015.

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Reader Comments (11)

  • Nadeem
    Dec 10, 2015 - 8:50AM

    Don’t be so silly. It’s just related to the size of the economy. Looks like you have a boring day?Recommend

  • Allah Hafiz
    Dec 10, 2015 - 9:06AM

    For India..thats twice the GDP of pakistan…need to bring back this money….Recommend

  • karachi 6
    Dec 10, 2015 - 9:17AM

    Just look at the property investment made by Pakistanis in Dubai per year; Pakistani investors with transactions worth Dh3.3 first 6 months of 2015 ( PK Rs 93.59 billion) in Dubai real estate.In 2013 Pakistani investment in Dubai Real estate was AED 8.635 billion.(source:Dubai Land Department (DLD). and news paper articles August 2015)
    Based on the above single data set, Global Financial Integrity report seems a bit odd by reflecting the illicit fund flow from Pakistan is only $1.92 Billion.Recommend

  • Clockboy Ahmed
    Dec 10, 2015 - 9:21AM

    Where are the firecrackers ?Recommend

  • Saurongetti
    Dec 10, 2015 - 10:27AM

    Looks like all the countries part of BRICS bank system and moving from US Dollar are in top position; China Mainland ($1.392 trillion), Russian Federation ($1.05 trillion), Mexico ($528.44 billion), India ($510.29 billion) and Malaysia ($418.54 billion).Recommend

  • vinsin
    Dec 10, 2015 - 10:37AM

    @karachi 6:
    Not every foreign transaction means involvement of illicit fund.Recommend

  • Omer
    Dec 10, 2015 - 11:30AM

    For a country, that has taken about $60 billion in external loans over the last 8 years and nothing to show for it. It seems that $1.917 billion is a big underestimate.

  • abdullah
    Dec 10, 2015 - 11:54AM

    @karachi.most if thise properties are bought by the resident pakistanis.seems you have no idea of property market in dubai.all is not black money and not corrupt money.Recommend

  • Amir
    Dec 10, 2015 - 3:10PM

    In case of Pakistan, illicit money is defined the ones taken cash by the courier, like Ayan Ali & Company. But our Politicians have learned a new art and better techniques; they get the kickbacks abroad, (with out movement of funds out of Pakistan) on highly priced projects awarded to international contractors; like, Lahore Waste Management, Metro Bus, LNG, Power Projects etc.Recommend

  • schumaila
    Dec 11, 2015 - 1:02AM

    A large amount of the illicit money flowing out of India lands into pockets of BLA, BRA, NDS and Afghan Media facilitated by RAW so that it can not be documented and investigated Recommend

  • Sarfaraz Abbasi
    Dec 12, 2015 - 6:06AM

    Please stop shamming Modi’s India every other day… Recommend

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