The latest report released by Washington-based financial watchdog Global Financial Integrity (GFI) which tracks capital flight has again shocked the people as Malaysia was ranked the second only to China in global capital flight with a total capital flight of US$64.38 billion in 2010.

China is the world’s second largest economy behind the US. As of 2011, China’s nominal GDP by industries was worth approximately US$7.32 trillion.

The economic reform brought benefits, but at the same time, also opportunities for the flow of black money. Therefore, it is not too surprising to see China being ranked at the top in global capital flight.

Malaysia, however, recorded only US$278.7 billion of GDP last year and barely squeezed into the world’s 35th spot, but was ranked second with a loss of US$64.38 billion worth of illicit money in 2010 alone. Unfortunately, this is not an honour, but a shame.

It is not the first shameful ranking for Malaysia. The GFI report last year showed that the country’s capital flight had achieved US$46.86 billion, and was later reviewed to US$30.41 billion, putting us at the second spot. The country was also ranked fifth in the world with a total US$291 billion of cumulative illicit financial outflows from the year 2000 to 2008.

I still remember that Prime Minister Datuk Seri Najib Razak had refuted the above data, claiming that the cumulative illicit financial outflow from 2000 to 2009 was only about 135.3 billion ringgit (US$44.23 billion). The GFI report, however, has exposed even scarier phenomenon.

The level of illicit flows from Malaysia in 2010 was the highest in 10 years.

The illicit financial outflow amount of Malaysia in 2010 was more than double compared to the amount in 2009.

The cumulative illicit financial outflows over 10 years, from 2001 to 2010, Malaysia was ranked the third in the world, after China and Mexico.

The GFI claimed that they made very conservative estimation and many cash transactions in drug trafficking, human trafficking and other criminal income have not been included in the estimation. Does this mean that, the US$64.38 billion we lost in 2010 might be an underestimated figure?

The GFI said that trade mispricing, the practice of shifting profits overseas by over- or under-invoicing intra-company transactions, accounts for an average of 80.1 per cent of illicit financial flows from developing countries. The rest of the dirty money involves corruption. We want to know how much of the total US$285 billion we lost over the past 10 years was from corruption?

It was reported that Bank Negara would respond to the report in early next month. Hopefully, it can openly tell us the truth and find a way to lead the country out of this shameful ranking.

By arrangement with the Sin Chew Daily/ANN