A comprehensive new report by Global Financial Integrity (GFI) has found that Pakistan accumulated a massive $119.4 billion trade value gap between 2013 and 2022, signaling significant risks of illicit financial flows and trade-based money laundering
The report, “Trade-Related Illicit Financial Flows in the Middle East and North Africa (2013–2022),” suggests Pakistan’s economy loses an average of $11.9 billion annually due to improper invoicing. It cites the “value gap”—the difference between what Pakistan reports as trade and what its partners report receiving—as a primary indicator for trade mis-invoicing, which involves the deliberate falsification of the price, quantity, or quality of goods on customs invoices to shift capital illegally across borders.
For Pakistan, this drain on resources is a critical concern. GFI notes that such flows “drain revenues that countries urgently need to finance public services and infrastructure.” It also highlights that countries with high illicit outflows typically invest significantly less in health and education than counterparts with lower illicit behavior.
The data reveals a distinct split where these discrepancies occur. Out of the total $119.4 billion cumulative gap, $54.3 billion was linked to trade with advanced economies, while $65.1 billion occurred in trade with non-advanced economies or regional partners.
Pakistan ranks among the top economies in the MENA region for absolute trade gaps, trailing only the major oil-exporting hubs of the U.A.E., which has a value gap of $457 billion, and Saudi Arabia, with a gap of $320 billion.
To curb these multi-billion dollar leaks, the report urges countries like Pakistan to pursue “multi-pronged reforms,” including but not limited to modernizing customs by investing in digital monitoring and A.I.-driven analytics to flag price anomalies in real-time. It also proposes beneficial ownership transparency, i.e. completing frameworks to identify the real individuals behind companies, preventing the use of anonymous shell firms for capital flight.
Global Financial Integrity is a U.S.-based think tank focused on illicit financial flows, corruption, illicit trade and money laundering. Through high-caliber analyses, fact-based advocacy to promote beneficial ownership and a cloud-based database to curtail trade fraud, the organization aims to address the harms inflicted by trade mis-invoicing, transnational crime, tax evasion and kleptocracy.