| Experts say the whopping figures raise questions involving many different aspects of governance.
While the government has said Bank Negara is invstigating the massive illicit financial outflows, some analysts believe the probe should involve a larger number of agencies.
This is because the figure of a whopping RM889 billion (US$291 billion). said to be lost between 2000 and 2008, raises too many questions that involve many different aspects of governance, they said.
The large outflow would amount to a lot of “finger pointing”, Centre for Policy Initiatives chief economist Lim Teck Ghee said in a statement.
Therefore, an independent probe in the form of a royal commission of inquiry would be more appropriate.
“There can be no dispute that a major part of this outflow is due to financial gains accumulated through corruption, kickbacks and other illegal means.
“How much can be disputed, and can only be determined by a thorough investigation, such as through the establishment of a royal commission to determine the extent of and the reasons for the outflow,” he said.
NONEWithout an independent panel with access to banking and other financial data, Lim noted “there will be needless speculation as to who are the parties implicated in these outflows”.
Last week Malaysiakini reported that a study by Washington-based financial watchdog Global Financial Integrity had placed Malaysia fifth on the list of nations with the largest amount of illicit capital outflow.
The report defines illicit capital as that “illegally earned, transferred or utilised”, but could also include legally-earned money which was transferred out to avoid taxes.
Legitimate investment could be affected
Interestingly, while announcing the Bank Negara probe yesterday, Deputy Finance Minister Donald Lim questioned the veracity of the figures, asking why the US watchdog had not raised the alarm earlier despite having monitored the situation since 2000.
dr yeah kim lengMeanwhile, Ratings Agency Malaysia chief economist Yeah Kim Leng also called for a multi-agency probe, but led by the Performance Management and Delivery Unit.
This is because the agency is in charge of monitoring the implementation of the Najib Razak administration's transformation programmes and reducing the level of corruption has been identified as one of the National Key Results Areas.
“However, to tackle the illicit financial outflows effectively, it will need the cooperation of frontline agencies such as the central bank, Ministry of Trade and Industry, Customs and the Malaysian Anti-Corruption Commission, among others,” Yeah said.
He added that the failure to take the report seriously could have an impact on Malaysia's legitimate foreign direct investment, which is on the mend after suffering terribly in the 2009 global financial crisis.
“Endemic corruption remains a concern and any improvement in governance will certainly boost Malaysia's attractiveness to foreign investors who have been slowly but steadily lured back by the government's transformation programme,” he said.
Poor governance, pervasive corruption
NONEWhile the report, which was written by GFI economists Karly Curcio and Dev Kar, could not pinpoint the exact reasons for Malaysia's illicit capital flight without further studies, it mentioned poor governance, increased inequality and pervasive corruption as likely factors.
Pakatan Rakyat leaders have also called for an inquiry on the matter, highlighting the fact that losing RM300,000 for every Malaysian between 2000-2008 through illegal means would put Malaysia on top of the infamy list.
This is greater than China, which lost US$2.8 trillion (RM8.55 trillion) in the same period but has a larger population as a well as higher gross domestic product.
Malaysia, which had a gross domestic product of RM679.69 billion in 2009, is the 30th largest economy in the world.
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