DHAKA: The illicit financial flow in Bangladesh has increased almost three times, according to latest report of the Washington based Global Financial Integrity (GFI) here the other day.
In 2012 at least USD 1.78 billion or Tk 137.32 billion was taken out of the country by various means. In 2010, at least USD 600 million or Tk 46.30 billion was smuggled out.
The amount of money flown out of the country through illicit means in 2012 is more than the health budget of the current fiscal. In 2014-15, the government’s allocation for the health sector was Tk 111.46 billion.
The GFI report titled ‘Elitist Financial Flows from Developing Countries: 2003-12’ was released worldwide yesterday. It gives an estimate of how much money of developing and least developed countries was illegally smuggled out over the last decade.
Ahsan H Mansur, executive director of the Policy Research Institute (PRI), said more money was smuggled out of the country as the elections drew near. That is why the smuggling of money increased in 2005 and 2006, and then again in 2012.
Those who used political clout to make their wealth were the ones who illegally sent out their money. Also, the big industrialists and businessmen of today have been sending money abroad by various means for the security of their families. They feel their children will not be able to build their businesses, industries, and amass wealth as they had done.
A former IMF official feels that this trend will continue in the days to come. No law will be able to control this. After all, the matter of money smuggling is greatly involved in good governance.
In December last year, GFI published a report on money smuggling from 2001 to 2011. The present report is an amended and updated form of that. The amended method of calculation has also amended the amount of money being sent out.
The previous report said at least USD 2.8 billion was smuggled out of the country in 2011 while the latest report says this has gone down to just USD 600 million. Similarly, in latest accounts, in 2010 a total of USD 672million was sent out, which in the previous report was USD 2.19billion.
In 2009, a total of USD 1.06 billion was transferred out, which previous records show as USD 1.40 billion. However, from 2005 to 2008, there is not too much difference in the previous estimates with the later ones.
Why is there such a large difference in estimates of smuggled money in a matter of a year? In an e-mail reply to this question, GFI’s communications director Clark Gascoigne told Prothom Alo, “GFI used data from the International Monetary Fund (IMF), and IMF regularly amends and updates these figures. And so GFI has to update its estimates accordingly. That is why there is such a big different in just a matter of a year, with the amount of money flown out in the last four years. But all these are conservative estimates. The actually amount of money illicitly sent out of the country will be higher.”
GFI has estimated the illicit financial flow from 151 countries. Bangladesh stood 51st on the list. According to the new estimates, in one decade (2003-2013), at least USD 13.16 billion has been smuggled out of the country. That means, on an average, every year USD 1.32 billion was being siphoned off out of Bangladesh.
The highest was smuggled out in 2006, the amount being USD 2.67billion.
GFI’s chief economist Dev Ker and economist Joseph Spanjers calculated the illegal outflow of money from developing countries.
GFI said trade misinvoicing was mostly used in developing countries to illegally transfer money out.
Professor Mustafizur Rahman, executive director of the Centre for Policy Dialogue, said there is no duty on the import of capital equipment and food products. So it should be checked whether the prices of these items are being projected higher than actual and the money being sent out through this channel. There is also scope of no bringing all export earnings back to the country, but siphoning it off elsewhere. GFI’s indication of trade misinvoicing is quite justified.