By Chong Zhemin, DAP Perak Economic Development Bureau Chief and Political Secretary to Taiping MP
According to the latest annual report by Washington-based Global Financial Integrity (GFI), Malaysia lost a total of RM171.11 billion (US$48.93 billion) in 2012 from illegal capital outflow. Malaysia ranks behind China, Russia, India and Mexico at 5th place. This astronomical amount lost is alarming and shocking but do not come to a surprise since Malaysia has been bleeding severely for the past few years and the government has no political will whatsoever to put a stop to it.
If calculated on a per capita basis, Malaysia illicit capital outflow is still world number one in 2012 at USD1,646.36 (RM5,762.26) per capita, ahead of Russia USD 856.16 per capita, Mexico USD 774.81 per capita, China USD 183.91 per capita and India USD 47.65 per capita.
Putrajaya will again use the same old excuse that the illicit capital outflow is due to trade mis-invoicing. However it is unthinkable that a country with a relatively small population at 29.72 Million is able to record such an astronomical amount of RM1.38 trillion (US$394.87 billion) from 2003 to 2012. It is clear that this astronomical amount is lost through crime and rampant corruption.
With world crude oil prices dropping, Malaysia’s economy outlook for 2015 is fragile and highly uncertain. Malaysia cannot afford to lose such an astronomical amount of money from illicit capital annually. Firm steps must be taken to stop the bleeding.
If Najib is sincere in tackling the illicit capital outflow, he must heed the recommendation by GFI by creating a central public registry of corporate beneficial ownership information.
Under this move, all firms registered in the country have a legal obligation to hold accurate and current information on the ultimate owner who benefits from the company which will be place on a central register maintained by the Companies House.
By creating a register of beneficial owner, the true owner of these anonymous shell companies will be make public. Financial institutions will know the true beneficial owner or owners of accounts opened with them hence making the cracking down of these ultimate beneficiary and tracking of funds transfer easier.
If Najib continues to ignore and rubbish the GFI report, Malaysian wealth will continue to be siphoned out at an alarming rate and it will be Malaysians who will ultimately pay the price for Najib’s incompetence.
