Political resolve can stem capital flight

The media is rife with reports of huge sums money being siphoned off from the country and recently the chairman of Crescent Leather Products and Crescent Tanneries was arrested in this regard. Accusations have been levelled against senior officials of the state-owned Sonali Bank and Janata Bank for their involvement in the matter.
It is obvious that before institution measures, political resolve is required to effectively stem this illegal outflow of billions of taka from the country. But unfortunately, all we have is a lot of verbal assurances. The recent arrest gives a glimmer of hope that perhaps action has begun, albeit rather late.
Through a press briefing, the National Board of Revenue (NBR) informed the public about the case filed against Crescent for smuggling 9.19 billion taka from the country. There is discrepancy between the relevant laws and the institutional measures regarding capital flight. We had been hearing for quite some time that amendments were needed in the 2012 money laundering act. In 2010 the finance minister at the time, AMA Muhith had said that that it was difficult to stem capital flight due to loopholes in the law. Eight years have passed since then, but there has apparently been no steps taken to create an effective law against this crime.
Involved in the ongoing process against this crime, alongside the Anti-Corruption Commission (ACC) are CID, the Bangladesh Financial Intelligence Unit (BFIU), NBR, the attorney general’s office and the home ministry. There are differences of opinion among the relevant officials and experts over their responsibilities. For instance, there is debate over whether NBR can file a case over capital flight. It is said that such cases required high level experienced experts and a prosecution team which NBR does not have. In fact, is is said that NBR cases give the accused for scope to slip out through the legal loopholes. And ACC policymakers feel that instead of NBR, CID or BFIU, the system should be amended and ACC take the lead role.
Allowing such discrepancies to exist in the coordination among these bodies and in the existing laws, simply gives the criminals further leeway. This must be rectified immediately. It is estimated that between 2005 and 2014, over six trillion taka has been siphoned out of the country, according to the Washington-based Global Financial Integrity (GFI). This amounts to the budget of two financial years in Bangladesh. In 2004, around 4 to 9 per cent of finances were smuggled out. In 2016, Centre for Policy Dialogue (CPD) gave an aggregate, stating that 4.5 trillion taka was siphoned off over the last 10 years. It seems that Bangladesh has become a haven for money launderers.
When there is a dearth of confidence the economy and politics and when there is a lack of transparency in the financial sector, capital flight steps up. The reason why capital flight is not addressed is the same reason why default loans remain in default and the capital marker continues to be looted. The root of the matter lies in political will.