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Investigate Why Malaysia Has Attained World Ranking in Illicit Outflows

by Dr. Lim Teck Ghee

I refer to a report by Washington financial watchdog Global Financial Integrity which found that Malaysia lost US$291 billion or RM889 billion through illicit outflows between 2000-2008.

The report written by GFI economists Karly Curcio and Dev Kar, who is a former senior economist at the International Monetary Fund is deserving of attention from everyone in the country – the Prime Minister to the lowest of our citizenry.

This finding of massive illicit capital outflow for Malaysia is the strongest confirmation of sustained capital flight from the country during the past decade, even if one wants to dispute the definition of “illicit” used. What is especially worrying is that the outflow has tripled in the short period of eight years from 2000-2008

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 is due to various causes 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 and the reasons for the outflow. Without an independent panel or Commission looking into this and having access to banking and other financial data, there will be no end to finger pointing and needless speculation as to who are the parties implicated in these outflows. Continue reading “Investigate Why Malaysia Has Attained World Ranking in Illicit Outflows”

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A Voyage Into the Darkness of Indonesian Corruption

by Angela Dewan
Asia Sentinel
18 JANUARY 2011

The Travels of Taxman Tambunan

If Jonathan Swift had written a satire on corruption in Indonesia, he couldn’t have imagined a more farcical plot than that involving Gayus Tambunan. In just eight months, the detained civil servant, a mid-level tax official, managed to bribe his way out of prison 68 times, fly to at least three other countries in a dubious disguise and even bribe his way out of bribery charges.

A frustrated President Susilo Bambang Yudhoyono Monday demanded an end to the affair and issued orders to look into 149 companies said to have benefited from the tax official’s services, including as much as US$1 billion in taxes allegedly evaded by companies controlled by Aburizal Bakrie, the head of the Golkar political party and one of Indonesia’s richest businessmen. It is a story that illustrates how deeply corruption reaches into the Indonesian government, including the national police, the courts, the prosecutor’s office, the immigration department, the prison system, the tax agency and others. It has also tarnished Yudhoyono’s reputation as a reformer.

Tambunan, back in jail, presumably for a long stretch, was so audacious in his antics that he captivated and even impressed Indonesians, who have dubbed him SuperGayus in local media – one newspaper even named him Man of the Year.

After several secret jaunts abroad, Tambunan was finally busted when a photojournalist covering an international tennis tournament in Bali snapped the slippery 31-year-old in the audience sporting an unconvincing wig of lustrous black locks and thick-rimmed glasses.

Tambunan was supposed to be sitting in a police cell awaiting trial for accepting Rp28 billion (US$3 million) in bribes to doctor the tax returns of three companies linked to the Bakrie Group. He denied for weeks that the photo depicted him. “I prefer golf,” was his sole response to reporters’ allegations outside the courtroom. Continue reading “A Voyage Into the Darkness of Indonesian Corruption”

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Explain RM888b illegal funds leak

by Lim Guan Eng
23.1.2011

DAP wishes to extend our congratulations to the Royal Malaysian Navy for its success in capturing 18 Somali pirates and preventing their attempted hijack of a Malaysian chemical tanker near the Gulf of Aden. This successful operation in saving the tanker and their crew without any loss of life inspires confidence in a professional navy that justifies the people’s faith.

Whilst our navy boys are heroes for their successful capture of Somali pirates in international waters, DAP regrets that land “pirates” are allowed to roam freely in Malaysia. The US-based financial watchdog Global Financial integrity (GFI) reported that illicit money outflows from Malaysia tripled to US$68.2 billion (RM208.1 billion) in 2008, from US$22.2 billion in 2000.

For the period 2000-2008, China tops the chart among the world’s exporters of illicit capital with a whopping US$2.8 trillion of outflows, followed by Russia (US$427 billion), Mexico (US$416 billion), Saudi Arabia (US$302 billion) and Malaysia (US$291 billion or RM888 billion). Other Asian countries with high illegal capital flight are Philippines ($109 billion), Indonesia ($104 billion) and India ($104 billion).

Clearly illegal capital flight from Malaysia of RM888 billion over 9 years from 2000-8 has dwarfed legitimate capital inflows into the country. GFI defines illicit financial flows as generally involving the transfer of money earned through illegal activities such as corruption, transactions involving contraband goods, criminal activities, and efforts to shelter wealth from a country’s tax authorities.

GFI said that poor governance, pervasive corruption and rising income inequality as contributory factors, making serious allegations that even GLCs such as Petronas could probably be driving illicit flows. This is a devastating indictment of the lack of enforcement, rule of law and a culture of corruption that has eroded confidence in our capital market. Continue reading “Explain RM888b illegal funds leak”