Kazi Zahidul Hasan :
Though corrupt business cartels, tax dodgers and organised crime masterminds are siphoning off billions of dollar from the country every year, the government and its agencies appear to remain apathetic in tackling such financial crime, economists pointed out on Tuesday.
They also identified a serious deficiency of government’s political will and poor regulatory regime as obstacles to the fight against the outflow of ‘dirty money’ from Bangladesh.
According to them, the illicit financial outflow stemming from transfer mispricing, trade misinvoicing, availing residency abroad, secret negotiated contracts with foreign firms, tax evasion and corruption is seriously damaging economic and financial stability of the country.
A report from the Global Financial Integrity (GFI) suggests that unrecorded capital flow from Bangladesh has stood at $61.63 billion between 2005 and 2014.
“The outflow mostly took place under the cover of trade misinvoicing, with average $6.16 billion per year,” it added.
The GFI report also revealed that illicit capital flight from Bangladesh was on a higher trend from 2007 following political turmoil of the time, and it continued until 2013 when the highest $9.66 billion was siphoned off.
Expressing serious concern over the situation, Dr Salehuddin Ahmed, a former central bank governor and a leading economist in the country told The New Nation that Bangladesh is losing billions of dollars every year in illicit financial flows. This amount could be used in the country’s development needs if the crime could be prevented.
“The economy is bleeding, and it is getting anaemic as a result of illicit financial flows,” he said, adding: “The government needs concrete actions to control the crime.”
He further said the government could not deliver but allowed money to leave the country by showing laxity over the problem.
“A strong political will from government can help curb the financial flows to a great extent. Besides, a tighter regulatory regime, capacity building of government agencies, cross-border information sharing and collaboration with international institutions are necessary to fight against the crime successfully,” he suggested.
Dr Salehuddin also said, “Capital outflows were already on the rise because investors, businessmen, politicians and the senior public servants are worried by future political and investment climate of the country.”
“A big amount of dirty money is flowing out from Bangladesh every year and the authorities concerned are rattling with the outflows. They are yet to intervene vigorously to defend the crime due mainly to lack of a political will from the government,” Dr AB Mirza Azizul Islam, former finance adviser to a caretaker government, told The New Nation.
He observed that corrupt businessmen and Bangladeshis have laundered the money under the disguise of trade misinvoicing, brought residential properties in the EU, the US, Canada, Malaysia, established business ventures in Singapore and Thailand, deposited black money in Swiss banks and made investments in Malaysia’s Second Home scheme.
“They may be successfully committed the crime taking advantage of porous regulatory control and weakness of the regulators like the central bank and National Board of Revenue and Anti-corruption Commission,” Mirza Aziz said.
He also said that there were also many weaknesses in the system that urgently needed attention. It was important that all the government agencies responsible to chase the dirty money should develop a combined capacity to comprehensively combat the illegal outflow of money.
“Fighting against all sorts of corruption and financial crime is a government political decision. So, the problem is political rather than enforcement,” Prof Abu Ahmed, who teaches economics at Dhaka University, told The New Nation.
He said the government should take a comprehensive strategy to curb the outflow of illicit money and the investigating agencies should play a proactive role in chasing it.
Prof Ahmed opined that such a capital flight has already taken a serious turn posing a great threat to the national economy. “The country may be go dry in its capital unless the current menace of capital outflow could not be prevented immediately,” he added.
