Sunday, January 23, 2011

Malaysia’s illicit money outflows totalling US$291 billion (RM888 billion)

Guan Eng tells Najib: Explain RM888bil illegal funds outflow
DAP has urged Barisan Nasional to come clean on Malaysia’s illicit money outflows totalling US$291 billion (RM888 billion) from 2000 to 2008.
Malaysia had the fifth-largest amount of illegal money outflows among developing countries during that period, according to a report by US-based financial watchdog Global Financial integrity (GFI) released this month.
“DAP regrets that land ‘pirates’ are allowed to roam freely in Malaysia,” said DAP secretary-general Lim Guan Eng in a statement today.
“Any clean and responsible government with integrity would have immediately established a Royal Commission of Inquiry into this RM888 billion illicit capital outflow scandal,” he added.

Prime Minister Datuk Seri Najib Razak declined to comment on the matter when asked last Friday but instead said Bank Negara would provide specific remarks.
Tun Dr Mahathir Mohamad and Tun Abdullah Ahmad Badawi were the successive premiers and finance ministers during that period.
GFI defines illicit financial flows as generally involving the transfer of money earned through illegal activities such as corruption, transactions involving contraband goods, criminal activities, and efforts to shelter wealth from a country’s tax authorities, said the programme’s website.
Illegal money outflows from Malaysia tripled to US$68.2 billion (RM208.1 billion) in 2008, from US$22.2 billion in 2000, said the GFI.
China topped the list of 125 developing countries at US$2.18 trillion in that period while Philippines, in 12th, was Malaysia’s closest regional neighbour at US$109.3 billion. Zimbabwe was 73rd at US$4.1 billion and Myanmar at 85th with US$2.9 billion.
GFI said its research indicates that political instability, rising income inequality, and pervasive corruption are some of the structural and governance issues that could be driving illicit capital from many developing countries.
The watchdog also noted that there have been media reports that large state-owned enterprises such as national oil company Petronas may be driving illicit flows.
“This is a devastating indictment of the lack of enforcement, rule of law and a culture of corruption that has eroded confidence in our capital market,” said Lim.
“Clearly, not only Petronas, but BN must come clean on the scandal of huge illicit money outflows,” added the Bagan MP.
The report further highlighted discrimination in labour markets as a factor behind migration and illegal money outflows.
“Sadly, Malaysia’s loss of human talent has not only dimmed our future but also made all of us poorer,” said Lim.
Zimbabwe came in 73rd on the list.
There are reportedly 700,000 Malaysians currently living abroad, with half of them in Singapore, while the rest mostly in Australia, Britain and the United States.
The GFI also said increasing transparency in the global financial system was critical to reducing illicit financial outflows.
Lim, the Penang chief minister, pointed out that his governance based on the principles of competency, accountability and transparency had resulted in Penang winning praise in the Auditor-General’s Report 2009 as the best financially managed state.
He warned that BN’s refusal to explain the scandal may drive Malaysia to bankruptcy by 2019, as previously predicted by Minister in Prime Minister’s Department Datuk Seri Idris Jala.
“Clearly illegal capital flight from Malaysia of RM888 billion over nine years from 2000 till 2008 has dwarfed legitimate capital inflows into the country,” said Lim.
“If RM888 billion was given to 27 million Malaysians, each man, woman and child would receive nearly (about) RM33,000 each over nine years,” he added.
Najib has launched his New Economic Model (NEM) where some RM1.4 trillion will be spent in the coming decade for the country to achieve high-income status and generate some RM1.7 trillion in gross domestic product (GDP) by 2020.
The NEM envisions mainly private investments with 40 per cent a mixture from government-linked corporations (GLCs) and the government itself and the balance from the private sector. However outflows in recent years have dwarfed the inflow of funds into the country. - Malaysian Insider

1 comment:

Anonymous said...

The Money Changer's Association in Third World Countries have infiltrated the high position in financial system. So much so they are able to get officials to turn a blind eyes to what they are doing. We will see the full impact of this ten years from now.