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Pacific countries lose US $12.1billion in illicit financial flows

EIGHT Pacific countries suffered losses of US$12.1 billion over 10 years in what global finance reformers describe as “illicit financial flows.” Papua New Guinea ($4.3b) and Fiji ($2.7b) recorded the most losses according to figures compiled by GFI, Global Financial Integrity. Vanuatu was third, with ‘illicit flows’ of US$2 billion.

Nearly a quarter of that Vanuatu figure was lost all in one year, in 2008, according to GFI figures. Global figures are estimated by GFI to “very conservative”, based on official statistics that reveal corrupt practices such as trade misinvoicing that is “hiding in plain sight.” GFI reported the losses among $6.6 trillion flowing from developing countries worldwide, between 2003 and 2012.

Illicit flows are growing fast. Nearly $1 trillion was lost worldwide in 2012, slipped away into anonymous shell companies, tax havens and secret bank accounts, up from an estimated $297 billion in 2003. That’s a growth rate of more than 9 per cent each year, twice that of global GDP, states GFI. Estimates for Illicit financial flows are based only on actual goods, as counted by the International Monetary Fund, not services. Drugs, human trafficking and counterfeiting are not included either.

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