WASHINGTON—Task Force on Financial Integrity and Economic Development (Task Force) member Transparency International released its 15th annual Corruption Perceptions Index (CPI) today. The Index is based on different assessments and business opinion surveys concerning the administrative and political aspects of corruption such as bribery of public officials, kickbacks in public procurement, embezzlement of public funds, and the strength and effectiveness of public sector anti-corruption efforts.
Two of the Index’s biggest losers were Russia and the U.S.—both of which were perceived to have become more corrupt over the past year—while Denmark, New Zealand, and Singapore were considered the least corrupt. According to the Index, Somalia is seen as the absolute most corrupt place on earth.
So what is the monetary cost of being the most corrupt country in the world? According to Global Financial Integrity’s report, Illicit Financial Flows from Africa: Hidden Resource for Development, Somalia lost $1.6 billion over the last 39 years—$128 million in 2008 alone—to crime, corruption, and corporate tax evasion. Put into scale: according to the CIA’s World Factbook Somalia’s GDP in 2008 was $5.5 billion.
Russia, according to Global Financial Integrity’s report Illicit Financial Flows from Developing Countries: 2002-2006 lost an average of$32 to $38 billion per year over the four-year period studied.
Next month Global Financial Integrity will release two new reports on illicit financial flows: a report on India’s illicit financial flows in addition to GFI’s annual Illicit Financial Flows from Developing Countries report. The numbers in both reports are staggering, with many countries losing hundreds of billions every year.
Looking at the illicit financial outflow numbers side by side with the Corruption Perceptions Index reinforces the inter-connectivity between the problems of corruption and illicit capital flight. The solution to stemming both lies in creating greater transparency and accountability in the global financial system.
To request more information about Global Financial Integrity’s illicit flows reports or request an embargoed copy, contact Monique Danziger at 202-293-0740 or email@example.com.
Click here for interactive graphics and more information on the Corruption Perceptions Index report.
Disclaimer: Unless specifically stated to be the views of the Financial Transparency Coalition, the opinions expressed on this blog are solely the opinions of the individual blogger and are not necessarily those of the Financial Transparency Coalition.