Nor can I find any figures in Wikipedia about “illicit money” in Swiss banks. The $2.6 trillion figure for 2001 and $5.7 trillion for 2007 are for off-shore funds, perfectly legal. Let’s move on to the Tax Justice Network (TJN), which is against tax havens and tax competition, arguing that this encourages capital flight from developing to developed countries. The TJN’s estimates, including the $11.5 billion figure, focus on tax abuse, not illegality. Nor should one forget that capital flight to developed countries isn’t caused only by tax havens (the pull) but also by irrational policies within developing countries (the push).

We are now left with the Global Financial Integrity (GFI) report of 2009 (2002-06 data) and Raymond Baker. There are several methodological problems with estimating capital flight and, though innovative, the GFI can’t be completely authentic, since one is talking about unrecorded transactions. Having said this, whenever the GFI is quoted, people latch on to the Asian figure, forgetting that the bulk of this flight within Asia is from China. And the quote is also from the executive summary, placing India (together with Russia) in the annual band of $10 to $100 billion, which is quite a large interval. Now we probably know where that $500 billion figure in the Advani press release came from, five multiplied by $100 billion. Had one read the report, one would have discovered the annual Indian figure is more like $25 billion. Since the GFI builds on Raymond Baker’s pioneering 2005 book, one doesn’t have to add anything on Baker.

... contd.