India lost $128 billion in illegal capital outflow

A staggering $128 billion in capital illegally flowed out of India in the last decade, making the country the 15th largest victim of illegal financial outflows that cost developing countries $903 billion in 2009, a new study says.

The study comes as New Delhi announced it would bring out a white paper on black money stashed away in tax havens abroad. Finance minister Pranab Mukherjee said on Wednesday that the government would soon introduce a bill to strengthen anti-money laundering laws.

While $903 billion marks a drop from the $1.55 trillion that illicitly flowed out of the developing world in 2008, the study finds the decrease almost entirely attributable to the global financial crisis than any governance improvement or economic reforms.

“This is a breathtakingly large sum at a time when developing and developed countries alike are struggling to make ends meet,” said Raymond Baker, director of research and advocacy organization Global Financial Integrity GFI. Entitled ‘illegal financial flows from developing countries over the decade ending 2009’, the report tracks the amount of illegal capital flowing out of 157 developing countries from 2000 to 2009.

According to the report, the 20 biggest victims of illegal financial flows over the decade are: China $2.74 trillion, Mexico $504 billion, Russia $501 billion, Saudi Arabia $380 billion, Malaysia $350 billion, United Arab Emirates $296 billion, Kuwait $271 billion, Nigeria $182 billion, Venezuela $179 billion, Qatar $175 billion, Poland $162 billion, Indonesia $145 billion, the Philippines $142 billion, Kazakhstan $131 billion, India $128 billion, Chile $97.5 billion, Ukraine $95.8 billion, Argentina $95.8 billion, South Africa $85.5 billion and Turkey $79.1 billion.