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27th-Jun-2016

Country of easy swindling and unrestrained capital flight

By Editorial Desk

Unchecked capital flight at several billion dollars annually over the past decade has brought the country's banking sector to the brink. It appears scandalous to note that Bangladesh as a capital deficit country has sadly turned into a major capital exporting nation in recent past. The economy is losing so much money when it is starving from capital shortage to finance the much-needed socio-economic services.
The country lost around $55.87 billion from 2004 to 2013 as a news report said on Sunday quoting disclosure by high profile economists at a seminar in the city. It means that $5.59 billion went out illegally every year on an average. The capital flight moreover escalated to $9.66 billion in a single year in 2015.
The drainage continued unabated as our Finance Minister was sitting in total ignorance until recently when he suddenly woke up and told Parliament that the banking sector saw unbridled looting in the past years, and sea level theft is only the appropriate expression to describe the situation. But the Minister was defiant only few years ago when swindling of state-owned banks came to the light. Muhith had laughed out Hall Mark swindling of Tk 4,000 crore from a single Sonali Bank branch in 2013 saying it was just peanut and blamed media for harming the banking sector by publishing such report.
Now that most banks are empty and swindlers have moved out over Tk 4.5 trillion abroad which is around 1.25 times of our national budget for 2016-17, he agreed that massive theft from banks and capital flight have taken place. The Minister however does not know how the swindled money, which is no less than Tk 30,000 crore in some estimates from banks, would be recovered and how he would trace the capital moved out of the country. It appears that Bangladesh is a country where easy swindling and unrestraint capital flights are possible.  
Capital flight makes other nations richer while making our nation poorer. The thieves are using this money abroad to buy assets or set up business creating jobs and income for other nations when our people are suffering from joblessness. They have become human commodity to be exported out of the country.     
It appears that the country lost 5.5 percent of the GDP annually through capital flight over the past decade when our economy also reportedly grew at around 6 percent. It means in one hand we were either hovering at around zero percent growth annually except tall talks about development or that the country's growth potentials remained drastically underutilized due to removal of investment fund to outside world.
The discussants blamed lack of proper investment climate in uncertain political situation for much of the capital flight as owners of the fund want to protect in safe custody. Businessmen are even openly demanding permission now to legally transfer capital abroad for investment. So it is important we must overcome these investment shortfalls to stop capital flight.     
The disclosure about terrible capital flight in presence of past policy makers such as former advisers to caretaker government Dr Akbar Ali Khan, Dr Mirza Azizul Islam, former governor of Bangladesh Bank Dr Farashuddin led many to question how the looters of public money felt so secured as if we do not have people with strong sense of patriotism and love for the country.
The biggest allegation for capital flight goes to big business houses. But when FBCCI President Abdul Matlub Ahmed asked the government to take action to stop capital flight, it sounds hollow and evasive. When powerful businessmen closer to the ruling party are engaging in capital flight, his suggestions for action appears meaningless.
The frustrated people can only ask for whom the government exists? It has no anxiety to save public property.