Friday, May 31, 2013

Money Laundering and RBA master Lim Guan Eng

When I posted "Money Laundering From Malaysia" I did say "I am sure the government and/or Bank Negara will respond"

And they did, the DAP friendly main stream media The Star reported "M’sian cops aware of Liberty Reserve" and the more opposition supportive Malaysiakini "Ahmad Maslan: Action soon on Liberty Reserve"

But as would be expected, the M'kini report included DAP propaganda from the Rocket Bullshit Assholes master, Lim Guan Eng.

Firstly, this remark,
"DAP secretary-general Lim Guan Eng called on the government to adopt financial reform, pointing out that Malaysia is fifth in the world in illicit capital outflow, with US$291 billion (RM927 billion) siphoned out between 2000-2009"
This is what the NYT reported,
The people who accepted Liberty Reserve’s currency were “overwhelmingly criminal in nature,” according to the indictment.

“They included, for example: traffickers of stolen credit card data and personal identity information; peddlers of various types of online Ponzi and get-rich-quick schemes; computer hackers for hire; unregulated gambling enterprises; and underground drug-dealing Web sites,” according to the indictment.
Clearly, the NYT report is far distinct from what Lim Guan Eng attempts to imply. Lim Guan Eng is adept at exploiting an unrelated issues arising for political mileage.

I will address the matter of illicit outflows later.

Then we have the usual BN bashing,
"The time has come for the BN federal government to stop being in denial by adopting genuine financial reforms to clean up and stop such criminal activities of illicit outflow of ‘black money’ and money-laundering"
My tit for tat. Which race comes immediately to mind at some (or most) of the criminal activities in Malaysia as stated in the NYT report above?

LGE then proceeds to take on Bank Negara Malaysia,
"Otherwise, there is no point in winning accolades for Bank Negara or for our purported good running of the economy when the real issues of transparency and accountability are not addressed"
Why is Lim Guan Eng attacking Bank Negara? Can Lim Guan Eng provide any evidence that accolades were solicited or sought, for Bank Negara?

As far as transparency and accountability is concerned, just click this BNM link and I call upon LGE to publish the audit findings of his party's fraud reported elections which catapaulted the only Malay into their select CEC.

Now about that oft opposition bandied and repeated, illicit outflows by GFI.

Bank Negara Malaysia also responded here.

An excerpt with relevant passages highlighted,
The report estimated that 80% of the unrecorded financial outflows in Malaysia amounting to USD227.1 billion during the period of 2001-2010 were due to trade mispricing. However, unrecorded financial flows which are derived by comparing import and export data between countries also arise due to data discrepancies and the varying conventions used to compile trade statistics among countries. This includes time lag, variations in valuation and exclusion of certain types of goods. The situation is further complicated by the treatment of goods that are exported via re-export hubs. Exports by Malaysia to a specific trading partner may for example not give rise to a similar number recorded as total imports from Malaysia by that country. This discrepancy arises as the imports are recorded based on country of origin that also includes those exports that are via other countries. After taking into account Malaysia’s trade that is exported via Singapore and Hong Kong (re-export hubs), the estimate of trade mispricing between Malaysia and its top 10 trading partners were reduced significantly by about 70%.Since the estimates in the report of trade mispricing do not take into consideration such discrepancies in trade statistics, the estimates of illicit flows are overstated.
Now this an article from The Peterson Institute for International Economics, "Did China Really Lose $3.75 Trillion in Illicit Financial Flows?" on the same GFI report.

Compare the following with BNM's press statement in the matter also with relevant passages highlighted,
Once reexports from Hong Kong are included in the analysis, the hidden flows from exports decline to close to zero, even becoming negative in some years. The revised estimates are dramatically lower. Between 2002 and 2011, we estimate that the average of annual outflows has been of $78 billion—4 times less than the GFI estimate.

Not only are the flows of illicit capital much lower, but they are also less pernicious than the GFI study makes them out to be. The GFI study fails to distinguish the illicit aspect of flows (where tax and regulator avoidance are the main objectives) from outright capital flight (which emerges when there are expectations of crisis and a need to reduce one’s exposure to the country).

In this context, while it is certainly useful to identify and estimate illicit flows, GFI’s statement that “social, political, and economic order is not sustainable in the long run given such massive illicit outflows” seems like hyperbole. Chinese illicit outflows are much smaller than the GFI report indicates and a considerable percentage end up back in China in the form of foreign direct investment.
No wonder Lim Guan Eng is miffed with Bank Negara Malaysia and the BN government.

BNM had come out with an apt reply in the illicit outflow matter and BNM deserves its accolades for being a responsible, efficient and professional government instituition.

RBA master Lim Guan Eng can only fool the "educated" urbanites.

1 comment:

Anonymous said...

Bila depa nak buat election? Kata excel error tapi boleh gebang pasal duit. Tapi depa kata org melayu kampung tak pandai, still sleeping.
Tak suka tau.