Wealthy elites pocket more than 7.5% of
financial aid coming into their economically struggling countries, according to
new research from the World Bank.
To reach these disturbing findings, researchers
measured the increase in deposits into offshore bank accounts in countries
known for high levels of bank secrecy by people in countries receiving
disbursements of foreign aid.
They discovered that roughly 7.5% of
foreign aid from the World Bank to poor countries is diverted from the intended
beneficiaries into offshore bank accounts of wealthy elites and corrupt
government officials.
The siphoning of foreign aid into
offshore bank accounts was found to increase as the ratio of aid to gross
domestic product in recipient countries grew, rising to as much as 15% for the
most aid-dependent countries.
Since the World Bank report includes only
foreign aid that winds up in offshore bank accounts, it can be considered the
lower boundary on the amount of foreign aid that ends up lining the pockets of corrupt
officials or elites in aid-dependent countries.
The total does not include aid diverted
locally to buy real estate or sports cars, for example.
The Heritage Foundation’s annual Index
of Economic Freedom measures
corruption in 180 countries around the world. Government Integrity is one of 12
subcategories that are averaged to find economic freedom scores for each
country in the index.
Corruption levels are highest in countries receiving large amounts of foreign aid.
The World Bank’s research is a wake-up call to the U.S. and other providers of foreign aid.
They need to do much more to assure the money reaches those who truly need it, not those who already enjoy wealth and privilege.
Source material can be found at this site.
