Capital flight triples in a year
THE Global Financial Integrity (GFI) in its latest study has found that capital flight from Bangladesh has tripled in the last year from US$1.78billion up from $593million a year ago. The country ranked 4th in South Asia and shows a disturbing trend which indicates that there is little confidence in the political stability of the country. The flight of such large sums of monies is also an indicator of how little control policymakers have over the transfer of such huge amounts over illegal means. Hundi remains the choice for transferring ill gotten gains, either through corruption or proceeds for criminal activities. Recent reports in the press have attributed Bangladeshis as one of the biggest groups who have settled for “2nd homes” in Malaysia.
The under-invoicing of both imports and exports has become a near-permanent facet in our trade. The aim of such malpractice is to keep foreign exchange abroad. This happens primarily because there is a general lack of confidence on how safe it is to keep money in the country given the fluidity of our political scenario. What has become abundantly clear is that there is a correlation between political stability and the illegal outflow of money. This unaccounted for transfer of money is a big blow for the economy as it means lost investments and revenue income for the government. According to GFI, developing countries like Bangladesh would have to invest $300million to curtail “mis-invoicing”. Given the outflow of billions, this would be money worth spent.
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