Photo: Corruption, Drug and Gun Crime, Tax Evasion Caused Mexico to Lose $872 Billion in 4 Decades
Between 1970 and 2010, Mexico reportedly lost $872 billion, according to a report from the Global Financial Integrity (GFI), a Washington, DC-based research and advocacy organization.
The report, Mexico: Illicit Financial Flows, Macroeconomic Imbalances, and the Underground Economy, found that due to 40 years of corruption, tax evasion, and drug, weapons, and human trafficking, Mexico has lost an exorbitant amount of money, money Raymond W. Baker, director of GFI says “could have been used to develop the Mexican economy, to invest in education, to build roads, or to fight the drug cartels.”
Baker said the negative ramifications of losing out on $872 billion are “huge for everyday Mexicans.”
Each decade the amount of money lost increased.
-Each year of the 1970s saw an outflow of $3 billion
-The 1980s: $10.4 billion per year
-The 1990s: $17.4 billion per year
-2000 through 2009: $49.6 billion per year
Thought $872 billion in lot money is high, it remains an estimate - an estimate the GFI believes may actually be on the conservative side. Since a large portion of drug cartel activity in conducted in cash the GFI is unable to detect such transactions, and as such are unable to include that addition money to the total.
Trade mispricing plays a large part in Mexico’s “lost money”. Trade mispricing is when individuals or corporations use fraudulent commercial invoices to smuggle money out of the country, usually in order to facilitate tax evasion.
“The ease with which money can be laundered across the U.S.-Mexico border via trade mispricing poses a major national security risk to both the United States and Mexico,” said Baker. “Drug traffickers, like kleptocrats, terrorists and tax dodgers, all gain from anonymous
shell companies, tax haven secrecy, and nefarious trade mispricing tactics. Taking steps to address these issues would curtail a number of societal ills.”
Read the full report, which was authored by Dr. Dev Kar, click here. (PDF)
