The Massive Outflow of Money from Malaysia
The Global Financial Integrity (GFI), a US-based watch-dog agency, recently reported that Malaysia ranked the fourth highest among developing nations in terms of illegal outflow of cash from the country.
GFI reported that in 2009 alone, the illegal cash outflow came to RM150 bn .and that between the period from 2000 to 2010, close to US338 bn ( RM1.08 trillion) fled from the country.
It is most alarmingly disconcerting to note that when our PM Najib was asked whether such massive illegal outflow of fund from the country would not impact the local economy, he replied that it would not as the Malaysian economy was still enjoying a robust growth rate of 5%! As if the answer was not mischievous and stupid enough, he added the country’s domestic demand was strong. Any economist would find such rationale highly illogical, frivolous and baseless.
The average illegal cash outflow worked out to be RM108 billion per year during the period 2000 to 2010 and this would have wiped out or negated whatever GDP increase about which the BN/UMNO PM so ignominiously boasted. He could hoodwink most people in the backyard and remote areas of the country but definitely not the urban middle class.
The GDP averaged over the past three years from 2009 to 2011 worked out to be about RM552.3 bn and basing upon our PM’s remark that our economic would grow by 5% in the coming year we are talking about an increase of RM27.125 bn and basing say RM100 bn was smurfed out of the country, whatever GDP increase would have come to naught.
Had the illegal fund outflow been prevented from disappearing from the shores of Malaysia, our Government need not have to administer the country on a deficit budget for the past decade.
Let us consider the recent NFC case in point concerning the allotted public fund being misused for purposes other that those for which it was approved. The ministry was allocated RM400 million for the development of cattle-breeding project but close to RM20 million had been siphoned out for ‘purchase’ of expensive and luxurious condominiums in Bangsar and Singapore. The target of producing sufficient cows could not be met. This resulted in a ridiculous situation whereby the local beef cost just as much as the imported beef. This invariably caused the consumers to bear the brunt of economic inflation due to corrupt, avaricious and mal-management personnel who were entrusted with public fund.
Just imagine had the “vaporized” RM1.08 trillion been channeled for the proper socio-economic development within the country, the entire population would have by now a decent house to stay in with sufficient savings stashed up for the rainy day.
The local populace may not have to bear the brunt of the highly- inflated cost of fuel and energy, houses, transportation, consumer goods and services, cars etc.
Another great surprise was the introduction of the Money Services Business Act 2011 (MSB) aimed at curbing illegal cash outflow and strengthening safeguards against money-laundering and terrorist financing and illegal activities.
In my most considered opinion, I think that the passage of the MSB was another exercise in futility.; particularly, when there was in place already the Anti-Money Laundering and Anti-Terrorist Financing Act, 2001. The conception of the MSB was another way of saying or confessing that the authorities, that is, the regulators, concerned had failed miserably in stamping out money laundering in the country.
The Government of the day must realize the importance of its role towards the public at large. She is entrusted by the public at the election to protect their interest including their socio-economic and spiritual well-being through proper and responsible optimization of the country resources.
Victory in a general election does not give the winning party the carte blanche to squander the country’s resources like what the UMNO/BN leaders do.
Victory in a general election does not give the winning party the carte blanche to squander the country’s resources like what the UMNO/BN leaders do.
It is imperative that civil servants and public leaders shoulder and discharge their responsibilities well so that the people get the optimal benefits they so deserve from the sweats of their hard-work. The money that they contribute to the country’s coffer through the income and corporate taxes they pay, the compulsory savings both the employers and employees contribute towards EPF, SOCSO and zakat should not be wantonly utilized or expended for non-profitable, unproductive and futile investments and business adventures. Corrupt leaders must be severely dealt with and if found guilty of corruption be dismissed summarily from employment.
The ill-gotten wealth should be confiscated and the guilty incarcerated for at least ten years.
The ill-gotten wealth should be confiscated and the guilty incarcerated for at least ten years.
Money laundering is a disease and if not checked will cause economic distortions in the country. If not curbed, it may attract criminals to come to the country to embark on various deceptive and dubious schemes to defraud the public further.
My suggestion for the Government is to take a serious view on those who are corrupt and/or those who are involved in illegally taking money out of the country or accepting bribes from the public.
Unless you do this, the public will not trust the power that be.
Unless you do this, the public will not trust the power that be.
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