As the number of country’s millionaires continues to grow, many of them in their increasing numbers are sending money overseas in an unprecedented rate. They are siphoning the money off either to hide their ill-gotten gains or to seek safer investments abroad. Consequently, the flood of cash from Bangladesh is being felt around the world, from the vault of Swiss banks to the Second Home project in Malaysia.
In order to turn the tide on capital outflow, the government introduced a tougher Money Laundering Prevention (Amendment) Act in 2015. But yet, it seems, the situation has been getting worse, not better. Individuals and companies kept laundering money in direct violation of the law.
According to latest report of Global Financial Integrity (GFI), Bangladesh has lost as much as USD 75.85 billion in last one decade (2005-2014). The country could have financed two national budgets with this staggering amount of money. Although last two years’ estimates are not yet in, USD 9 billion may have left the country in 2014 alone.
A vernacular daily yesterday reported that NBR identified nine individuals who laundered as many as BDT 451 crore. NBR appointed three law firms to bring back the money. It is definitely a good step, but not enough. Steps should be taken to bring back laundered money from other countries as well. Besides, the channels of money laundering should be brought under strict surveillance and money launderers should be stopped on their track, as we know prevention is always better than cure. Once money is taken abroad, it is very difficult to bring it back. And procrastination will make it even more complicated.
If Bangladesh is to achieve sustained high economic growth and become a middle income country by 2021, it cannot afford inaction on capital flight. To put it simply, illicit financial outflow is bleeding the country dry, and if nothing is done, the haemorrhage will only get worse.
Private investment in the country remained weak due to money laundering and it is negatively affecting employment generation and economic growth. If this situation persists, our journey towards becoming a developed nation will definitely be delayed.