Rabu, Disember 19, 2012

MPS SOUND WARNING OVER MALAYSIA’S RISE IN ILLEGAL MONEY CHART

BN MPs sound warning over Malaysia’s rise in illegal money chart

KUALA LUMPUR, Dec 18 — Barisan Nasional (BN) lawmakers want the government and Bank Negara Malaysia (BNM) to accelerate efforts to stop the flow of illicit capital from Malaysia’s economy.

They expressed worry today that if continued unchecked, the country’s image and integrity would be badly affected, particularly to global investors.

Speaking to The Malaysian Insider today, Deputy Finance Minister Datuk Donald Lim Siang Chai acknowledged the Global Financial Integrity’s (GFI) latest report on capital flight for 2010 and agreed that the government must step up measures.

Lim said the government must act to stem the outflow of illicit capital.

“We will check on this and get BNM to reply,” he gave his assurance.

The US-based financial watchdog GFI, in its latest report, ranked Malaysia second place out of the 150 developing countries surveyed, recording a loss of US$64.38 billion (RM196.84 billion) worth of illicit monies in 2010 alone. Topping the list was China, which recorded some RM1.3 trillion in losses in 2010.

Cumulatively, Malaysia was ranked third behind China and Mexico, with a total of US$285.2 billion having been channelled out of the country’s economy via crime, corruption, tax evasion and other illicit activities between 2001 and 2010.

“This is bad. It is a huge amount of outflow and this just doesn’t reflect well on the country,” said Umno’s Padang Besar MP Datuk Seri Azmi Khalid.

Azmi, a former minister, currently chairs Parliament’s Public Accounts Committee (PAC), a body that examines the appropriation of sums granted by the lower House for public expenditure.

“On the economic side, these outflows also reflect badly because if the monies are retained internally or used for investments locally or abroad, it could bring income and riches to Malaysia.

“Right now, the outflows, stemming from illicit activities, they only deplete our coffers,” he said.

Malaysia is rich despite the outflows, Azmi continued, but noted that losing ringgit in capital flight could only stunt the country’s hopes of growing richer.

“The government must have a relook at the procedures and current laws to see how we can stamp out this problem. Perhaps our current laws have not been enforced well or are inadequate,” he added.

Azmi’s colleagues and political allies in Umno and the MIC, however, stressed the importance of the accuracy of GFI’s numbers.

“Is this a net or gross figure? Of course, capital flight through tax evasion or illegal practices does point to a loss of confidence in the country.

“But if in contrast, monies departing Malaysia is in turn replaced by more investments here, then there is no loss of confidence and would not be detrimental to the country,” Pulai MP Datuk Nur Jazlan Mohamed said.

Azmi said capital flight would only stunt the country’s hopes of growing richer.

Datuk S.K. Devamany, who sits as deputy minister in Prime Minister’s Department Economic Planning Unit (EPU), pointed out that the GFI study was conducted by an independent body outside the country and its numbers and methodology must be verified as true.

“If there is truth, of course we need to arrest the problem. The government has been concerned about this and the prime minister and Finance Ministry have been talking about these illegal activities causing us to lose money.

“There is a need to look at the country’s legislative framework. Reforms may be required to offer a more stringent money-flow mechanism,” he told The Malaysian Insider.

“And of course, we must go after the culprits,” the MIC vice-president added.

Azmi also noted that as long as tax havens exist abroad, the issue of illicit outflows cause by tax evasion would continue unfettered.

“Not only monies from Malaysia... everywhere around the world, leaders could siphon out money.

“Who are those who introduce these avenues? Places like Cayman Islands, western countries... so why blame us when there are these places to park money,” he pointed out.

Last year, the GFI report released had shown similarly worrying trends in Malaysia’s illegal money outflow, revealing that the country had risen in the chart, ranking the fourth highest in the development world with RM150 billion worth of capital flight recorded in 2009.

In March, 2011, Bank Negara Governor Tan Sri Dr Zeti Akhtar Aziz said the Money Business Services Act would be tabled to enable the central bank to address the outflow of funds from the country.

The Act came into force on December 1 last year.

The new law supports the development of a more dynamic, competitive and professional money services business industry, while strengthening safeguards against money laundering, terrorist financing and illegal activities, according to Bank Negara.

It said the new law introduces strengthened prudential requirements, focusing particularly on ensuring the effective oversight and control of the conduct and operations of licensed entities to safeguard the integrity of, and confidence in the money services business industry.

Earlier this year, The Malaysian Insider cited a London-based research as revealing that a colossal RM893 billion had been siphoned out of Malaysia’s economy into tax havens abroad between 1970 and 2010, placing the country among the top 20 nations in the developing world labelled as “losers” of capital flight.

The sum is more than triple that of Malaysia’s national debt total, which amounted to RM257.2 billion in 2011, according to previous media reports.

In the study commissioned by Tax Justice Network (TJN), a London-based organisation of professionals including economists and tax consultants, Malaysia is now ranked 12th on the list, two rungs above Singapore’s RM533 billion outflow and three below Indonesia’s RM1 trillion.

The federal opposition has long railed against the ruling BN over its alleged fiscal irresponsibility, claiming its relentless spending and massive illicit capital outflow would soon plunge the country into a debt crisis.

By Clara Chooi

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Pemimpin BN beri amaran kedudukan Malaysia dalam pengaliran wang haram

MALAYSIA LOST US$64.38 BILLION IN 2010 AND US$285 BILLION CUMULATIVELY BETWEEN 2001 AND 2010?

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