Kazi Zahidul Hasan :
Capital flight from Bangladesh has been in the global spotlight in recent years and the latest leak of names of 56 Bangladeshi nationals and organisations in Panama papers has further ignited the matter as to how the country is rapidly getting vulnerable to such illicit financial flow.
Development economists believe that the country is losing a significant amount of capital per year from the illicit financial flow, but it has failed to take any effective measures to curb the growing menace.
According to a report of US-based Global Financial Integrity (GFI), Bangladesh has lost US$5.59 billion on average between the year 2004 and 2013 from illegal capital flight which mainly stem from tax evasion, crime and corruption and trade misinvoicing.
This high amount of illegal capital outflow sends Bangladesh at 26th position among 149 countries in terms of economies exporting illegal capital.
“Although the growing menace of capital flight sends Bangladesh in the global spotlight, no effective step is in sight to prevent the crime,” Dr Zahid Hussain, lead economist of the World Bank’s Dhaka Office told The New Nation on Friday.
He said, the names of Bangladeshis appeared in the latest leak in Panama Papers further ignited the issue as to how the country is losing the much needed capital through the illicit financial flow.
When asked, Dr Zahid Hussain said, political uncertainty, corruption and weak internal investment climate are the main reasons behind the high illicit outflow.
“Bangladesh needs a large amount of funds to attain its development goals but drainage of such huge money by capital flight may squeeze its development needs significantly affecting the economy,” he observed.
The WB’s lead economist said that the government agencies must give an all-out coordinated effort for curtailing the illicit financial flows.
“The government agencies should also enhance communication and mutual cooperation with the international agencies to facilitate their effort to trace and bring back stolen money from Bangladesh,” he added.
“Hot money is rapidly flowing out from the country due to weak enforcement of law, ill governance and poor oversight from the regulatory bodies,” Dr Salehuddin Ahmed, a former Bangladesh Bank (BB) governor told The New Nation on Friday.
He said, frequent policy changes by the government, uncertainty in investment climate, lack of easy access to credit, strict capital and currency controls, weak capital market and potential for higher asset return from investment abroad are also leading the local people to send their ill-gotten money in foreign countries.
“Capital flight seems to be turned into a national adversity calamity and combating this adversity requires identifying the perpetrators and understanding why and how they do it. Besides, an enhanced oversight and coordination among the agencies concerned is necessary to curb the offshore transaction by Bangladeshi nationals,” he noted.
Referring to media reports, Dr Mirza AB Azizul Islam, a noted economist of the country, told The New Nation yesterday that there had been capital flight to Dubai of the United Arab Emirates and Malaysia in the absence of congenial political and business climate in the country.
Corrupt politicians, businessmen and bureaucrats are allegedly sending billions of dollars every year by illegal means. But unfortunately the regulatory bodies have failed to detect such illegal transactions.
“We have stringent laws and various bodies to deal with such shady transactions. But they are yet to show any success to check capital flight,” he said adding that the government agencies are not serious about their duties and as a result, in most of the cases the smuggled-out money remained untraced harming the national economy.
Capital flight from Bangladesh has been in the global spotlight in recent years and the latest leak of names of 56 Bangladeshi nationals and organisations in Panama papers has further ignited the matter as to how the country is rapidly getting vulnerable to such illicit financial flow.
Development economists believe that the country is losing a significant amount of capital per year from the illicit financial flow, but it has failed to take any effective measures to curb the growing menace.
According to a report of US-based Global Financial Integrity (GFI), Bangladesh has lost US$5.59 billion on average between the year 2004 and 2013 from illegal capital flight which mainly stem from tax evasion, crime and corruption and trade misinvoicing.
This high amount of illegal capital outflow sends Bangladesh at 26th position among 149 countries in terms of economies exporting illegal capital.
“Although the growing menace of capital flight sends Bangladesh in the global spotlight, no effective step is in sight to prevent the crime,” Dr Zahid Hussain, lead economist of the World Bank’s Dhaka Office told The New Nation on Friday.
He said, the names of Bangladeshis appeared in the latest leak in Panama Papers further ignited the issue as to how the country is losing the much needed capital through the illicit financial flow.
When asked, Dr Zahid Hussain said, political uncertainty, corruption and weak internal investment climate are the main reasons behind the high illicit outflow.
“Bangladesh needs a large amount of funds to attain its development goals but drainage of such huge money by capital flight may squeeze its development needs significantly affecting the economy,” he observed.
The WB’s lead economist said that the government agencies must give an all-out coordinated effort for curtailing the illicit financial flows.
“The government agencies should also enhance communication and mutual cooperation with the international agencies to facilitate their effort to trace and bring back stolen money from Bangladesh,” he added.
“Hot money is rapidly flowing out from the country due to weak enforcement of law, ill governance and poor oversight from the regulatory bodies,” Dr Salehuddin Ahmed, a former Bangladesh Bank (BB) governor told The New Nation on Friday.
He said, frequent policy changes by the government, uncertainty in investment climate, lack of easy access to credit, strict capital and currency controls, weak capital market and potential for higher asset return from investment abroad are also leading the local people to send their ill-gotten money in foreign countries.
“Capital flight seems to be turned into a national adversity calamity and combating this adversity requires identifying the perpetrators and understanding why and how they do it. Besides, an enhanced oversight and coordination among the agencies concerned is necessary to curb the offshore transaction by Bangladeshi nationals,” he noted.
Referring to media reports, Dr Mirza AB Azizul Islam, a noted economist of the country, told The New Nation yesterday that there had been capital flight to Dubai of the United Arab Emirates and Malaysia in the absence of congenial political and business climate in the country.
Corrupt politicians, businessmen and bureaucrats are allegedly sending billions of dollars every year by illegal means. But unfortunately the regulatory bodies have failed to detect such illegal transactions.
“We have stringent laws and various bodies to deal with such shady transactions. But they are yet to show any success to check capital flight,” he said adding that the government agencies are not serious about their duties and as a result, in most of the cases the smuggled-out money remained untraced harming the national economy.
