Scope to bring back laundered money: Stop capital flight
In the context of the global economic instability caused by the Covid pandemic and the Russia-Ukraine war, the proposed budget for 2022-23 fiscal has offered an opportunity to bring back the laundered money. Various organisations and economists, including Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), the apex body of traders, have strongly criticised this decision. Finance Minister AHM Mustafa Kamal has urged people not to oppose the decision arguing that this money has people’s share. But it is clear from the statement of planning minister MA Mannan that the decision is unrealistic.
According to Prothom Alo, in a webinar jointly organised by the Economic Reporters Forum, Rapid and Asia Foundation on the proposed budget on Sunday, the planning minister said, "Once money is smuggled out of the country, it is almost impossible to get it back."
He said, “We have neither the legal process nor the power to bring back the money deposited by the Bangladeshis in the Swiss bank.” Why did the government take such an impossible decision then? While answering this question, the minister has left the matter to the launderers’ discretion by taking refuge in the proverb “The devil would not listen to the scripture”.
This clearly means that the government itself knows that it is impossible to bring the smuggled money back to the country. Instead, the planning minister advised to pay attention to preventing the outflow of the money from the country.
Bangladesh Bank has no reliable information of how millions flows out of Bangladesh every year. According to Global Financial Integrity (GFI), a Washington-based research institute in the United States, about Tk 640 billion is smuggled from Bangladesh every year in the name of business. According to the report of the Swiss National Bank, in the last two years (2021) the highest amount of money has been deposited in various banks in Switzerland in the name of Bangladeshi individuals and organisations.
Bangladesh Bank, though, said that the money that went to different countries including Swiss Banks was not siphoned from Bangladesh. However, in a seminar on 18 June, the Bangladesh Financial Intelligence Unit (BFIU) said that it had received information from various Swiss National Banks about the money laundering of 67 individuals and organisations in Bangladesh. The agency, set up to combat money laundering and terrorist financing, also believes that recovering laundered money is a complex process.
In Bangladesh, the state has been providing special benefits to the owners of black money since 1976. There has been little response in decades. Analysts believe that the country has entered a new height of whitewashing black money with the opportunity to bring back the money laundered by paying only 7 per cent tax in this year's proposed budget. Many feel through this opportunity the launderers are being rewarded legitimacy. Some have strongly criticised this opportunity as unconstitutional and unlawful.
When there is so much questioning, criticism and doubt within the government about the benefits of recovering laundered money, what is the rationale of the opportunity? The main crisis is that the revenue in the budget cannot be increased because of the effort to protect the interests of various groups. That is the reason behind taking such measures. To increase the revenue and expenditure deficit in the budget, practical steps have to be taken to increase the revenue. The authority must come out of the impossible hope of getting the laundered money back. Instead, they must focus on stopping the capital flight.