Malaysia the 4th most corrupt nation in the world but not a sound from Najib

For the first decade of the new century, Malaysia has lost a staggering RM1.08 trillion (US$338 billion) in illicit outflows which is the fourth highest in the developing world.

In the period 2000-2009, China lost US$2.74 trillion in illicit financial outflows and was the developing country with the largest illicit outflows, according to a country ranking published in the report. Mexico ranked second, with US$504 billion and Russia third with US$501 billion while our closest-ranked regional neighbour is the Philippines, who at 13th place lost US$121 billion.

Illicit outflows can be taken as a benchmark or indication of the scale of corruption. This means Malaysia has the most corrupt set of leaders in Southeast Asia, who are also the 4th most corrupt in the world, stashing the massive amounts of money they plunder overseas.

The Global Financial Integrity (GFI) reported in January that RM930 billion flowed out of Malaysia from 2000 to 2008, growing to RM218 billion per year from an initial RM71 billion in that period. Malaysia lost RM150 billion in illicit outflows in 2009. The report elaborated further by stating that the increase was “at a scaled seen in few Asian countries” and continued added, “The volume of illegal capital flight from Malaysia has come to dwarf legitimate capital inflows into the country in recent years.”

Bribery, theft and kickbacks

The warning bells were sounded as early as January 2011 by the likes of Opposition Leader Anwar Ibrahim, who questioned the apathy shown by the government towards the problem of illicit outflow via corruption and tax evasion practices.

Corruption – bribery, theft and kickbacks – accounts for the other half of illicit flows and dominate the Middle East, North Africa and developing Europe, the report said.

The falsification of import/export invoices, known as trade mispricing, accounts for just over half of all illicit financial flows and is particularly prevalent in Asia and the West.

To stem the tide, Bank Negara Governor, Dr Zeti Akhtar Aziz, tabled the Money Business Services Act in March; an act that has since came into effect on December 1st. The new law supports the development of a more dynamic, competitive and professional money services business industry, while strengthening safeguards against money laundering, terrorist financing and illegal activities, according to Bank Negara.

Half-hearted Act

Yet, the Act seems too little too late, since it is a mere knee-jerk reaction to a decade old problem. After a decade where Malaysia has lost RM1.08 trillion, in-action by the Barisan Nasional government has cost us dearly. This is a governement that has been bleeding money for the longest time and is prime for an economic implosion that would default the country.

With inflation clocking in at 3.4% in September after touching a 27-month high of 3.5 per cent in June, food inflation remains the biggest concern, increasing to 5% year-on-year in September from 4.6 per cent in August. Malaysians are headed for hard times with less value for the ringgit in their pockets as opposed to the cost of living. And what has been the Finance Minister’s response to this?

None.

Not a sound, only grandiose announcements from Najib

Instead, we have had a grandiose announcements to make Malaysia a high income society and the further abuse of public funds to sponsor failed projects such as the NFC, a national cattle livestock project. The sudden rush to have a revision of the public service pay-scheme is a veiled attempt at soliciting more tax money yet at the same time to secure the civil service as the “fixed-deposit” for the upcoming 13th General Election. The arresting measures that were rushed into place have merely been a means to secure an election win, whilst the whole country steams towards default.

The fact that annual illicit outflows from Malaysia has grown from RM71 billion to RM218 billion per year points to the ineffective counter-measures placed by the Finance Ministry and Bank Negara to stem the problem. Put bluntly, the measures failed. Prime Minister Najib Razak, who is also the Finance minister, has nothing to show for his time in office, despite having taken over the top job in April 2009.

The silence of the Finance Minister is telling. One cannot help but ask if Najib, the person responsible for the financial health of the nation, is on top of things. Is it a priority of the Finance Minister? Is the Barisan Nasional government working hard at fixing the financial state of the nation?

Such issues concerning Malaysia’s financial state only enforces the notion that Malaysia is truly heading towards default much like Greece, and as forecast by Minister in the PM's Department, Idris Jala, who predicted bankruptcy by 2019 due to inability to service ever growing debt.

Malaysia Chronicle