MALAYSIA IS WORLD’S NO 2 IN ILLEGAL CAPITAL FLIGHT

KUALA LUMPUR, Malaysia - Close to RM200 billion of dirty money was siphoned out of Malaysia in 2010, putting the country second only to Asian economic powerhouse China in global capital flight.

Washington-based financial watchdog Global Financial Integrity (GFI), in its latest report which tracks capital flight, says the level of illicit flows from Malaysia in 2010 was the highest in 10 years.

GFI has introduced a new and more conservative methodology in its estimates of illicit financial outflows, which help to zero in exclusively on dirty money. As such, estimates from its previous reports have been revised.

Last year, GFI put the figure of illicit outflows for Malaysia in 2009 at US$46.86 billion (RM143.3 billion). This has been altered to US$30.41 billion (RM93 billion).

The latest report finds a dramatic jump of capital flight in Malaysia – from US$30.41 billion (RM93 billion) in 2009 to US$64.38 billion (RM196.8 billion) in 2010.

GFI has yet to obtain data for 2011 and 2012, but these will be included in future reports.

The global financial watchdog has warned that capital flight in Malaysia is “at a scale seen in few Asian countries”.

The GFI report, ‘Illicit Financial Flows From Developing Countries: 2001-2010?, is co-authored by GFI economists Sarah Freitas and Dev Kar, who is a former senior economist at the International Monetary Fund.

According to GFI, for the cumulative illicit financial outflows over 10 years – from 2001 to 2010 – Malaysia is ranked No 3 in the world, after China and Mexico.

The total 10-year estimate for Malaysia is US$285 billion (RM871.4 billion), while China is US$2,740 billion, and Mexico, US$476 billion.

Prime Minister Najib Abdul Razak has disputed GFI’s figures. Last year, he gave Parliament a much lower figure of RM135.3 billion for illicit capital outflows from 2000 to 2009.

Source: The Malaysia Chronicle