Capital flight: Errors and omissions
COMMENT The length that Prime Minister Najib Razak had gone to push the Saudi government for a probe on alleged Saudi's funding of opposition parties in Malaysia is appalling.
COMMENT The length that Prime Minister Najib Razak had gone to push the Saudi government for a probe on alleged Saudi's funding of opposition parties in Malaysia is appalling.
This is especially true when he had not responded to mounting calls for an all-party probe on Global Financial Integrity (GFI) report that Malaysia's illicit fund outflows reached US$291 billion (RM888 billion) for the period from 2000 to 2008.
The prime minister's act of abusing a diplomatic channel to press for a probe against a democratically elected opposition leader is scandalous enough, though not as shocking as his lackadaisical attitude towards the GFI report.
It is symptomatic of Umno/BN's obsession with character assassination as the only way to meet political challenge. When challenged for a debate on Pakatan Rakyat's ‘Buku Jingga’ (Orange Book - Pakatan’s First 100-day Plan), the prime minister resorted to personal attacks. 
In the midst of widespread concerns of his administration's ability to resuscitate private investments and stemming out the average annual illicit fund outflows of US$32 billion (RM98 billion) annually, we discover that he was more pre-occupied with personal probe on Anwar Ibrahim.
The GFI report demands a closer scrutiny especially when the method and data used are bona fide and globally accepted. The method is based on the World Bank Residual model which uses the change in external debt (through balance of payments data) to determine unrecorded capital leakages.
These capital leakages are often caused by proceeds of bribery, theft, kickbacks and tax evasion. This model is universally accepted and it is unbecoming of a certain deputy minister of international trade to question the veracity of the model. The data used in the model is available publicly and announced by Bank Negara periodically.
Alarming revelations
In light of this, any finance minister would have been alarmed, especially when Bank Negara's own statistics show a persistent large negative "errors and omissions" since 2005.
"Errors and omissions" in the balance of payments corresponds to a balancing figure to account for statistical inaccuracies and incomplete reporting of financial flows monitored by a central bank.
A negative "errors and omissions" simply means that either the outflows have been underestimated (more funds leaving the country than officially reported) or the inflows have been overestimated (or a combination of both).
Since 2005, Malaysia has recorded a large negative "errors and omissions" in its balance of payment. [See table]
The total sum of probable underestimation of outflows reported by Bank Negara in between 2005 and 2009 is RM120.8 billion – an official statistic from the Malaysian government that provides a degree of correlation to GFI report on the illicit fund outflows of the country.
Given the gravity of this, it is best that the prime minister concentrates on managing the country's economy prudently and act promptly on alarming revelations contained in GFI report. He has no business going around abusing the diplomatic channel to undermine Pakatan Rakyat and Anwar Ibrahim.
Finally, the table has been turned – Umno/BN's accusation that Pakatan Rakyat utilises an international networking for political advantage now rings hollow in light of the prime minister's own behaviour.
MOHD RAFIZI RAMLI is PKR director of strategy.
