Democratic Republic of Congo Lost $15.5 Billion in Capital Flight Since 1980, According to Global Financial Integrity Report

Contact: Monique Perry Danziger

202-293-0740

July 24, 2008, Washington, D.C. – The Democratic Republic of Congo
(DRC) lost an estimated $15.5 billion due to capital flight from 1980
to 2006, according to a new report from Global Financial Integrity
(GFI), a program of the Center for International Policy.  The report
was prepared using data from the International Monetary Fund and World
Bank and represents the most up-to-date figures for illicit capital
outflow from the DRC.

According to the report,
“pervasive corruption,” and trade mispricing in goods and services led
to a per annum loss of nearly $600 million dollars from the DRC
economy.  Notes the report’s author, lead economist Dev Kar, “With that
money, the DRC could have paid off its entire external debt, which is
$11.2 billion.”

The developing world loses $500 to $800 billion per year due to illicit
financial outflows,” said GFI director Raymond Baker.  “Recognizing and
curtailing this massive capital loss is critical to combating poverty
and fostering economic prosperity in poor and developing nations.”

“The
DRC is a textbook example of what international development experts
call the ‘paradox of plenty,’” said Baker.  “Although the DRC is a
resource-rich nation, possessing 80 per cent of the world’s Coltan and
10 per cent of its copper, as well as diamonds, gold, and oil, 80 per
cent of the Congolese population live in abject poverty.”  

GFI
director Raymond Baker met with 50 high-level finance and academic
representatives in Kinshasa this week to present the report’s findings
and discuss strategies for curtailing capital flight out the DRC.

“This
study illustrates a reality facing many poor countries and the
international development community: capital flight undermines economic
development and poverty alleviation efforts and makes poor countries
more poor,” said Baker.  “With rising commodity prices giving rise to
fears of a global poverty crisis it is critical we take steps to
address this problem and implement measures to curtail illicit
financial outflows from these countries.”