Corrupt leaders in developing countries and transitioning countries skim up to $40 billion a year from the public.

The World Bank and the United Nations announced Monday that they were setting up a system to help developing nations recover assets stolen and sent abroad by corrupt leaders that amount to an estimated $40 billion a year.

According to a fact sheet from the World Bank, 25 percent of Africa’s GDP is lost to corruption every year, amounting to $148 billion in lost tax revenue. 

In addition, the World Bank estimates on the size of the market in criminal activities.

The initiative launched today estimates between US$1 trillion and US$1.6 trillion is lost each year to various illegal activities including corruption, criminal activity such as drugs, counterfeit goods, money, and illegal arms trade, and tax evasion.

This figure is somewhat higher then our Havocscope Global Index, where we currently list the illicit market to be $990.66 billion.  A key difference in our numbers is due to the fact that currently we are not including tax evasion into our index.

The World Bank also highlights the losses that is created by illicit markets.  For every dollar that is lost to the black market, there is one less dollar that is available to spend on social needs.

The report says ever US$100 million recovered could fund full immunizations for 4 million children, provide water connections for 250,000 households, or fund anti-retroviral treatment for over 600,000 people with HIV/AIDS for a full year.

To read the full report, click here (56 page PDF file).