Bangladesh loses $68b in illicit trade flows from 2013 to 2022: Report
Across developing Asia, trade-related illicit financial flows reached an estimated $1.69 trillion in 2022 alone.
Bangladesh lost an estimated $68.3 billion through trade-related illicit financial flows between 2013 and 2022, according to a report by Global Financial Integrity released on Thursday (26 March).
Trade misinvoicing involves deliberately falsifying the value or quantity of imports and exports to evade taxes, shift profits, or transfer capital abroad, report said.
The report finds that Bangladesh is among the top 10 countries in developing Asia in terms of total trade value gaps.
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In Bangladesh's case, a significant portion of the illicit flows is linked to trade with advanced economies. The report estimates that around $33 billion of the total gap occurred in transactions with countries such as the United States and those in Europe.
The findings suggest that Bangladesh's exposure is not limited to regional trade but is tied to global supply chains, particularly in export-oriented sectors and import-dependent industries.
Compared to other South Asian countries, Bangladesh's losses are substantial but remain far lower than India's, which recorded more than $1.06 trillion in illicit trade flows over the same period.
Sri Lanka, by contrast, recorded a smaller volume of about $24 billion in trade gaps with advanced economies, though its economic vulnerability amplifies the impact of such leakages.
Across developing Asia, trade-related illicit financial flows reached an estimated $1.69 trillion in 2022 alone, underscoring the scale of the challenge.
Major economies such as China, Thailand and India account for the bulk of these flows, though the problem spans countries of all sizes.
The study said, such practices remain deeply embedded across Asian economies, with no clear sign of decline over the past decade.
Illicit outflow rate: Smaller and mid-size economies top the list
To assess the intensity of trade misinvoicing relative to the size of each country's trade, the GFI calculated each country's average trade value gap as a percentage of its total trade between 2013 and 2022.
The Philippines tops the list, with a staggering 25.6% of its total trade value lost to misinvoicing, narrowly ahead of China at 24.9%.
Several small economies appear next: Timor-Leste and Maldives follow at 23.8% each, with Malaysia (23.6%), Thailand (23.4%), and Mongolia (23.2%) close behind.
India registers 21.8%, while, two small economies, Samoa and Myanmar each stand at 21.3%.
The report noted, India's percentage, while a bit lower, is still around one-fifth of trade, significant for such a large economy and consistent with decades of capital flight issues.
Bangladesh, meanwhile, records a geometric mean illicit outflow rate of 15.86% over the decade, while, the report lacked the country's data for 2014, 2019, 2020, 2021, and 2022.
Cambodia and Sri Lanka deepen losses, Nepal and Maldives cut gaps
Cambodia and Sri Lanka stand out for their worsening trends. Cambodia's trade value gap surged from 17.65% in 2013 to 27.04% in 2022, with the sharpest acceleration beginning in 2019. Sri Lanka followed a steadier but equally troubling climb, rising from 16.63% to 23.92% over the decade.
India has maintained a consistently high gap; while it fluctuated throughout the period, it ended higher at 22.77% in 2022 compared to 21.35% in 2013.
In contrast, Nepal has seen a remarkable and consistent decline in its trade value gap, falling from 19.98% in 2013 to a low of 11.53% in 2022, the lowest among the Developing Asian countries.
The Maldives also experienced a notable recent improvement, dropping to 18.45% in 2022 after several years of exceeding 24%, including a peak of 26.25% in 2019.
