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Illegal transactions will come to a halt if under-invoicing prevented & IT sector strengthened: Mustafizur Rahman

Published in The Asian Age on Wednesday, 3 August 2016

Black money piles up, laundering rises

Jibon Islam

Money laundering goes on unabated, as there is little or no scope of investing black money in Bangladesh which economists say takes a toll on the economy.

According to Washington-based Global Financial Intelligence, around $5,587 or Tk 4,41420 crore was siphoned off in the last 10 years from Bangladesh, while the sum was nearly US$ 1,600  between 2004 and 2014. This estimate shows that on an average $160 or Tk12,500 crore was laundered a year over the period.

Bangladeshis are keen to boost their Swiss bank account where many believe their stolen or ill-gotten money would be safe and not be asked about their sources.

By this time, their account has doubled, reliable sources say. Malaysia is a second home to many Bangladeshis. From Bangladesh at least 3061 people went to Malaysia on business and to make home in the last 13 years – by illegally transferring huge money from Bangladesh.

Indian newspaper Anandabazar published a report on May 6 this year, saying that Tk 38,oo,ooo crore had been laundered to India and other 37 countries by Bangladeshis in recent years. Money laundering is done by under-invoicing L/Cs, through mobile operator, Hallmark and Bissmilla Group, banks and share market.

Center for Policy Dialogue (CPD) thinks $105 or Tk 8,400 crore is being laundered a year. However, no official data is available in this regard.

Concerned sources say as black money holders find the local environment not conducive to stake their money, they invest in Malaysia, thus making that country their second home. Besides, some Bangladeshis who possess black money have settled at Begumpara in Canada finding ample scope for their investment in that country.

Also, people having capacity to invest $1 crore have gotten space in the United States of America where investment of such an amount for at least ten years would raise no question at all.  Rather, they enjoy a VIP status.

Singapore and Australia are two other countries where such investments are encouraged, no matter it is black or white.

Recently, Finance Minister Abul Maal Abdul Muhith admitted to journalists the existence of black money, which is 48 per cent of the economy.

“A research on black money, which is being siphoned off the country, will be conducted next year,” the Minister said. On possible prevention of money laundering, Professor Mustafizur Rahman, Executive Director of CPD, said, “To stop money laundering from the country the anti-money laundering law will have to be made more effective. If under-invoicing can be prevented and IT sector be strengthened illegal transactions will come to a halt.”

In addition to keeping exchange rates of Bangladesh currency stable, the government should be careful about transactions by fake companies, the CPD official suggested.

Abdus Salam Murshedy, President of Exporters Association of Bangladesh, said, “It is not known how much black money is being laundered, but if opportunity is given to invest this money in the country, such malpractice will be stopped.

If proper environment for investment can be ensured, sufficient land plots in rural areas are allotted, development of  infrastructure and energy supply are available, tax holiday and governmental refinancing are given, then local and foreign investment will increase, creating a huge employment opportunity. And then it will be possible to prevent money laundering.”

Echoing Murshedy’s view, former president of DCCI Abul Kashem Khan said, “Money laundering will have to be stopped through creation of investment opportunity.” He suggested that the land problem for entrepreneurs should be resolved. Khan also underscored the need for awarding the local entrepreneurs the facilities enjoyed by the investors in advanced countries.

Former chairman of NBR Golam Hossain pointed out that wealthy people here siphoned off money because they find an environment outside the country conducive for investment of undisclosed money.

“By giving investment opportunity with easy terms and conditions for undisclosed money, developed countries have improved socio-economic conditions,” he said.

Citing the example of RMG, he said as there was opportunity for investment of undisclosed money in RMG in 1989 this industry has turned out to be the largest industry employing 40 lakh poor women of the country.


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