Illicit capital outflows from Bangladesh go unabated and as much as US$81.74 billion was siphoned off the country during the period 2006-2015, according to a recent study by the Washington-based research organization Global Financial Integrity.
The study, which was quoted in the January 29 issue of the Bangladesh Chronicle, states that the money was drained out through over-invoicing in imports and under-invoicing in exports, a common but illegal accounting technique which in many countries deprives governments of huge amounts of revenue.
Global Financial Integrity defines illicit financial flows as “money that is illegally earned, used or moved and which crosses an international border,” or a form of money laundering.
According to the press report, economists and experts say that money laundering in Bangladesh remains a major concern as it has been put on a list of the top 30 of a total of 148 countries that Global Financial Integrity has investigated.
Topping the list is China with $222 billion being drained out during the same period, followed by $42.9 billion for Mexico and Malaysia’s $33.7 billion.
According to estimates quoted in the report and based on trade statistics compiled by the International Monetary Fund and the UN’s International Trade Statistics (Comptrade), 17.5% of Bangladesh’s total trade worth $33.7 billion with “advanced economies,” meaning Western countries, was laundered in 2015.
As such, “trade misinvoicing remains an obstacle to achieving and equitable growth in the developing world,” the report states. Apart from asking the Bangladesh government to implement legal reforms to curb illicit financial flows, the study also urges “the advanced economies” to take stern action against such illicit financial flows.
The report does not contain any figures for the period after 2015, but it is unlikely that the situation has changed much in recent years.