Malaysia is in the top five countries with the highest average illicit financial flows over the decade, losing a combined US$418.542 billion (RM1.8 trillion) since 2004, according to rankings by a US-based global watchdog.
The Washington-based Global Financial Integrity (GFI) placed Malaysia at the fifth spot, behind China, Russia, Mexico and India, losing an average of US$48 billion (RM206 billion) every year from 2004 to 2013.
Others in the top 10 are Brazil, South Africa, Thailand, Indonesia and Nigeria.
Titled "Illicit Financial Flows from Developing Countries: 2004-2013", the report blamed the illicit outflows on tax evasion, crime, corruption, and other illegal activities.
Five of the top 10 countries in the report are from Asia, accounting to some 40% of illicit outflows around the world, with China being described "the leading source of illicit outflows".
"However, major resource drainage from India, Malaysia, Thailand, and Indonesia also boosted the region’s global ranking in illicit outflows," the report said.
It also said developing and emerging economies lost US$7.8 trillion in illicit financial flows during the 10-year period, and that illicit outflows increased at an average rate of 6.5% annually.
The study measures illegal fund outflows based on misinvoicing and leakages from balance of payment.
It said some 83% of illicit outflows were due to trade misinvoicing, with over US$800 billion exiting developing countries each year.
"While the total value of this trade would not be applied to development programmes, the tax associated with this illicit activity could be allocated to various poverty alleviation efforts," said GFI, which also ranked Malaysia at the fifth position in its report last year. – December 24, 201
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