GFI may revise Malaysia's illicit outflow estimates
Published: Dec 15, 2013 11:51 PM | Updated: Dec 16, 2013 4:49 AM
Washington-based Global Financial Integrity (GFI) says it may revise the total illicit outflow for Malaysia if the Singapore authorities release re-export data from Malaysia to their country.
This follows the claim of Minister in the Prime Minister's Department Paul Low that the GFI report on Malaysia's illicit outflow may be overstated as it was not adjusted to factor in Malaysia's re-exports to Singapore.
Washington-based Global Financial Integrity (GFI) says it may revise the total illicit outflow for Malaysia if the Singapore authorities release re-export data from Malaysia to their country.
This follows the claim of Minister in the Prime Minister's Department Paul Low that the GFI report on Malaysia's illicit outflow may be overstated as it was not adjusted to factor in Malaysia's re-exports to Singapore.
"Until Singapore starts publishing re-export data on a bilateral basis, there is little we can do," GFI's chief economist Dev Kar (right) said in an email to Malaysiakini.
"Perhaps in future updates of the report we can note that estimates of illicit flows from Malaysia may be overstated due to the fact that the estimates were not adjusted for the re-export of Malaysian exports to Singapore by Singapore," Kar said.
He said GFI could not adjust Malaysia's figures based on the country's reported exports to Singapore, even though the information was available in the International Monetary Fund's Direction of Trade Statistics.
This was because the adjustment for China's figures was based on re-exports of Chinese exports from Hong Kong, as reported by the Hong Kong Census and Statistics Department, and not based on what China reports as exports to Hong Kong.
"We have to follow a methodology that is consistent across all countries," Kar said.
He then called on the Malaysian government to get its Singaporean counterpart to release the necessary data so that a more accurate figure of Malaysia's illicit outflow could be established.
"We would suggest that the Malaysian Central Bank urges the Monetary Authority of Singapore and other statistical agencies to compile and publish the required data on the re-exports of Malaysian exports," he said.
Low: Lack of data the reason
Last Friday, Low said the GFI report had taken into account trade misinvoicing to re-export hub Hong Kong but did not do so for Singapore, which had more trade with Malaysia, due to lack of data.
Malaysia's trade with Singapore in 2011 was RM93.7 billion (US$29 billion), mostly through re-exports.
However, Low (right) acknowledged that even if trade mispricing was taken out of the equation, it may not change Malaysia's ranking at number four GFI's top 10 countries in the world in terms of illicit outflow as this manipulation by multinationals affected most developing countries globally.
According to the GFI annual report, which tracks global capital flights, a total of RM173.84 billion (US$54.18 billion) was siphoned out of Malaysia in 2011.
This put Malaysia just behind the global giants Russia (US$191.14 billion), China (US$151.35 billion) and India (US$84.93 billion).
In its report released last Thursday, Washington-based GFI said that "trade misinvoicing comprises the major portion of illicit flows (roughly 80 percent on average)", with the rest being "hot money".
This translated into around RM139 billion of Malaysia's illicit capital outflows in 2011 as a result of to transfer mispricing, while RM34.8 billion is from crime.
This follows the claim of Minister in the Prime Minister's Department Paul Low that the GFI report on Malaysia's illicit outflow may be overstated as it was not adjusted to factor in Malaysia's re-exports to Singapore."Until Singapore starts publishing re-export data on a bilateral basis, there is little we can do," GFI's chief economist Dev Kar (right) said in an email to Malaysiakini.
"Perhaps in future updates of the report we can note that estimates of illicit flows from Malaysia may be overstated due to the fact that the estimates were not adjusted for the re-export of Malaysian exports to Singapore by Singapore," Kar said.
He said GFI could not adjust Malaysia's figures based on the country's reported exports to Singapore, even though the information was available in the International Monetary Fund's Direction of Trade Statistics.
This was because the adjustment for China's figures was based on re-exports of Chinese exports from Hong Kong, as reported by the Hong Kong Census and Statistics Department, and not based on what China reports as exports to Hong Kong."We have to follow a methodology that is consistent across all countries," Kar said.
He then called on the Malaysian government to get its Singaporean counterpart to release the necessary data so that a more accurate figure of Malaysia's illicit outflow could be established.
"We would suggest that the Malaysian Central Bank urges the Monetary Authority of Singapore and other statistical agencies to compile and publish the required data on the re-exports of Malaysian exports," he said.
Low: Lack of data the reason
Last Friday, Low said the GFI report had taken into account trade misinvoicing to re-export hub Hong Kong but did not do so for Singapore, which had more trade with Malaysia, due to lack of data.
Malaysia's trade with Singapore in 2011 was RM93.7 billion (US$29 billion), mostly through re-exports.However, Low (right) acknowledged that even if trade mispricing was taken out of the equation, it may not change Malaysia's ranking at number four GFI's top 10 countries in the world in terms of illicit outflow as this manipulation by multinationals affected most developing countries globally.
According to the GFI annual report, which tracks global capital flights, a total of RM173.84 billion (US$54.18 billion) was siphoned out of Malaysia in 2011.
This put Malaysia just behind the global giants Russia (US$191.14 billion), China (US$151.35 billion) and India (US$84.93 billion).
In its report released last Thursday, Washington-based GFI said that "trade misinvoicing comprises the major portion of illicit flows (roughly 80 percent on average)", with the rest being "hot money".
This translated into around RM139 billion of Malaysia's illicit capital outflows in 2011 as a result of to transfer mispricing, while RM34.8 billion is from crime.
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