For every dollar of aid that goes into developing countries, ten dollars comes out as capital flight. It has been estimated that developing countries lose more than USD 500 billion every year in illegal outflows which are not reported to the authorities and on which no tax gets paid.
The largest channel for capital flight is trade, where mispricing of transactions with the help of tax havens and banking secrecy undermines the tax and domestic resource mobilization ability of developing country governments.
Wealthy individuals and other domestic elites piggyback on the institutional apparatus of secrecy, private banking and tax havens to transfer billions of dollars out of poor developing countries, depriving their fellow citizens of even the most basic needs such as health care. Western multinational corporations, financial institutions, accounting firms, lawyers and financial centres have all been complicit in perpetrating, facilitating and actively soliciting this capital flight.