Global Financial Integrity Estimates Mexico LosesGFI: Over $50bn Annually in Illicit Financial Outflows

From Global Financial Integrity:

As drug violence in Mexico spirals out of control, a new blog post published today on the website of the Task Force on Financial Integrity & Economic Development reveals that the Mexican economy is losing over US$50 billion per year in illicit financial outflows. Citing data from GFI’s forthcoming report, Illicit Financial Flows from Developing Countries: 2000-2009, Global Financial Integrity Economist Karly Curcio states that, between 2000 and 2008, total illicit financial outflows from Mexico totaled US$462 billion.
Curcio writes:

"As Mexican stability is deteriorating, billions of dollars are being sent illegally out of the economy undermining genuine efforts at reform and growth. Findings from a forthcoming Global Financial Integrity update on Illicit Financial Flows from Developing Countries show that between 2000 and 2008 cumulative illicit flows from Mexico were over US$462 billion. That is over $50 billion per annum."

Moreover, due to limitations in the economic model used by GFI, these are likely to be conservative estimates. Curcio explains:

"The model is not able to capture illegal, cash-only transactions and smuggling related activates, so the negative economic impact of illicit flows from the country is almost certainly understated."

Click here to read the full blog post.

GFI’s forthcoming report, Illicit Financial Flows from Developing Countries: 2000-2009, updates GFI’s ground-breaking 2008 report, Illicit Financial Flows from Developing Countries: 2002-2006, which estimated that the developing world loses roughly US$1 trillion annually in illicit financial outflows.

The new report will provide the latest data on illicit financial flows out of each of the 160 developing countries analyzed for each year from 2000 through 2008. Projected 2009 totals will be included on a regional—as opposed to country-by-country—basis.

The report is scheduled to be released on January 18, 2011.

For inquiries, interviews, and to receive an embargoed copy of the report, contact Monique Perry Danziger at mdanziger(at)gfip.org or +1 202-293-0740 ext. 222.

The GFI story also draws attention to this very good story about U.S. hypocrisy in cracking down on tax evasion.