[🇧🇩] Corruption Watch
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The relation between corruption and remittance
Many are sympathetic towards migrant workers for justifiable reasons.
The relation between corruption and remittance
VISUAL: FATIMA JAHAN ENA
Many Bangladeshis seek employment abroad due to limited job opportunities and economic conditions at home. The overseas employment sector has become a vital source of income for many families and contributes significantly to the national economy.
Workers employed overseas send money back home to support their families. This money, known as remittance, plays a crucial role in the Bangladeshi economy. It is a primary source of foreign currency and helps improve the living standards of many households. Remittances contribute to consumption, investment, and savings in the local economy. A high level of remittance inflow strengthens the forex reserves, which are essential for maintaining the stability of the national currency (taka), managing international trade, and ensuring the country can meet its foreign obligations.
"Corruption" on the other hand hurts the economy in more ways than one. In most cases, perpetrators resort to corrupt practises for their individual financial gains at the expense of the national economy. Therefore, it is important for the corrupt to secure the wealth accumulated through corruption. Gone are the days when black money was kept hidden inside mattresses—the enormity of modern-day scams involving thousands of crores of taka renders that option impractical today. Syphoning the money out of the country is the safest way now to protect the loot, and this is where "corruption" is linked to "remittance."
Those who want to send black money out of the country, need someone who will receive Bangladeshi taka inside the country, in return for foreign exchange handed over abroad. Bangladeshis working abroad are ideal partners for this transaction. These two parties, namely corrupt politicians, government officials, and businessmen on one side and migrant workers on the other, get connected by the "hundi" operators. Hundi is an informal method of transferring money, often used by migrant workers to send remittances back home as well as to transfer illegally accumulated wealth out of the country by the crooks. It is a faster and cheaper alternative to formal banking channels and operates outside the regulatory framework.
Hundi traders also offer services like collection and distribution of fund any time and at any location, short term credit, etc. The main reason migrant workers prefer hundi to official banking channels is because they get a better exchange rate than the official rate. That is why many recommend improving the official rate by bringing it close or equal to the unofficial (hundi) rate as a means to combat illegal transfer of money across the border.
However, "special exchange rates" and incentives to remittance earners have been introduced to no avail. Because, to the corrupt money launderer, the loss incurred due to difference in exchange rate is of little significance; protecting illegally amassed fortune and his/her goodwill are far more important. Therefore, no matter how much the exchange rate for the remittance earner is improved, hundi operators will offer an even better rate.
Many are sympathetic towards migrant workers for justifiable reasons. Migrant workers earn foreign currency staying separated from relatives/friends for lengthy periods, living in difficult conditions, combatting many adversities. Many may ask, "Is it a big deal, if they get a taka or two more for their hard-earned foreign currency opting for informal channels?" Some of them incorrectly think that the foreign exchange is entering Bangladesh, even if the informal channel (hundi) is used to remit the fund. People might also argue that it may not be going in the hands of the government if official banking channels are not used, but is added to local economy anyway. Maybe they do not realise that the US dollar or other foreign exchange earned by migrant workers do not enter Bangladesh at all, if sent through informal channels. Rather, it goes in the hands of corrupt individuals and groups who accumulate wealth illegally and remain abroad. The corrupt parties just hand over their accumulated wealth (taka) to relatives/friends of migrant workers living in Bangladesh, with the help of hundi operators. In effect, politicians and government officials resorting to bribery, businessmen defaulting on bank loans, importers avoiding duty by under-invoicing, smugglers dealing in restricted/banned substances get to enjoy a safe and convenient conduit to transfer their illegal wealth to a safe haven.
If hundi is the "vehicle" to transfer black money, "corruption" provides its fuel. While curbing corruption is a long-term process, following measures may prove to be effective in the short to medium term.
Creating awareness among all concerned, especially migrant workers, as to how hundi is not only depriving country of foreign currency earned abroad, but also encouraging corruption and providing a safe route to take illegal wealth out of the country.
A more effective measure could be to promulgate laws which will make it mandatory to bring in a certain percentage of migrant workers' income through official channel. The percentage amount should be determined by the Bureau of Manpower, Employment and Training (BMET) or any other competent authority after careful analysis of every worker's income, expenditure, savings and remittance pattern. Non-compliant workers may be held accountable when they return to Bangladesh. And in extreme cases, their NOCs may be cancelled and they may be barred from going abroad again for employment. Such measures may sound harsh, but one should remember that those who resort to hundi cause grave damage to the economy by facilitating corruption.
Mir Ashraful Hossain is the director and group COO of Urmi Group.
VISUAL: FATIMA JAHAN ENA
Many Bangladeshis seek employment abroad due to limited job opportunities and economic conditions at home. The overseas employment sector has become a vital source of income for many families and contributes significantly to the national economy.
Workers employed overseas send money back home to support their families. This money, known as remittance, plays a crucial role in the Bangladeshi economy. It is a primary source of foreign currency and helps improve the living standards of many households. Remittances contribute to consumption, investment, and savings in the local economy. A high level of remittance inflow strengthens the forex reserves, which are essential for maintaining the stability of the national currency (taka), managing international trade, and ensuring the country can meet its foreign obligations.
"Corruption" on the other hand hurts the economy in more ways than one. In most cases, perpetrators resort to corrupt practises for their individual financial gains at the expense of the national economy. Therefore, it is important for the corrupt to secure the wealth accumulated through corruption. Gone are the days when black money was kept hidden inside mattresses—the enormity of modern-day scams involving thousands of crores of taka renders that option impractical today. Syphoning the money out of the country is the safest way now to protect the loot, and this is where "corruption" is linked to "remittance."
Those who want to send black money out of the country, need someone who will receive Bangladeshi taka inside the country, in return for foreign exchange handed over abroad. Bangladeshis working abroad are ideal partners for this transaction. These two parties, namely corrupt politicians, government officials, and businessmen on one side and migrant workers on the other, get connected by the "hundi" operators. Hundi is an informal method of transferring money, often used by migrant workers to send remittances back home as well as to transfer illegally accumulated wealth out of the country by the crooks. It is a faster and cheaper alternative to formal banking channels and operates outside the regulatory framework.
Hundi traders also offer services like collection and distribution of fund any time and at any location, short term credit, etc. The main reason migrant workers prefer hundi to official banking channels is because they get a better exchange rate than the official rate. That is why many recommend improving the official rate by bringing it close or equal to the unofficial (hundi) rate as a means to combat illegal transfer of money across the border.
However, "special exchange rates" and incentives to remittance earners have been introduced to no avail. Because, to the corrupt money launderer, the loss incurred due to difference in exchange rate is of little significance; protecting illegally amassed fortune and his/her goodwill are far more important. Therefore, no matter how much the exchange rate for the remittance earner is improved, hundi operators will offer an even better rate.
Many are sympathetic towards migrant workers for justifiable reasons. Migrant workers earn foreign currency staying separated from relatives/friends for lengthy periods, living in difficult conditions, combatting many adversities. Many may ask, "Is it a big deal, if they get a taka or two more for their hard-earned foreign currency opting for informal channels?" Some of them incorrectly think that the foreign exchange is entering Bangladesh, even if the informal channel (hundi) is used to remit the fund. People might also argue that it may not be going in the hands of the government if official banking channels are not used, but is added to local economy anyway. Maybe they do not realise that the US dollar or other foreign exchange earned by migrant workers do not enter Bangladesh at all, if sent through informal channels. Rather, it goes in the hands of corrupt individuals and groups who accumulate wealth illegally and remain abroad. The corrupt parties just hand over their accumulated wealth (taka) to relatives/friends of migrant workers living in Bangladesh, with the help of hundi operators. In effect, politicians and government officials resorting to bribery, businessmen defaulting on bank loans, importers avoiding duty by under-invoicing, smugglers dealing in restricted/banned substances get to enjoy a safe and convenient conduit to transfer their illegal wealth to a safe haven.
If hundi is the "vehicle" to transfer black money, "corruption" provides its fuel. While curbing corruption is a long-term process, following measures may prove to be effective in the short to medium term.
Creating awareness among all concerned, especially migrant workers, as to how hundi is not only depriving country of foreign currency earned abroad, but also encouraging corruption and providing a safe route to take illegal wealth out of the country.
A more effective measure could be to promulgate laws which will make it mandatory to bring in a certain percentage of migrant workers' income through official channel. The percentage amount should be determined by the Bureau of Manpower, Employment and Training (BMET) or any other competent authority after careful analysis of every worker's income, expenditure, savings and remittance pattern. Non-compliant workers may be held accountable when they return to Bangladesh. And in extreme cases, their NOCs may be cancelled and they may be barred from going abroad again for employment. Such measures may sound harsh, but one should remember that those who resort to hundi cause grave damage to the economy by facilitating corruption.
Mir Ashraful Hossain is the director and group COO of Urmi Group.
Saif
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Countering threats from exploiters of national resources
Ever since the takeover of the country's reins by the interim government, well wishes, congratulatory messages, assurances of cooperation and assistance, moral and material support have been showered profusely from all corners of the world. One of the reasons behind the surfeit of cordiality expres
Countering threats from exploiters of national resources
Nilratan Halder
Published :
Sep 19, 2024 21:32
Updated :
Sep 19, 2024 21:32
Gen Z Revolution in Bangladesh A Beacon of hope for global justice
Ever since the takeover of the country's reins by the interim government, well wishes, congratulatory messages, assurances of cooperation and assistance, moral and material support have been showered profusely from all corners of the world. One of the reasons behind the surfeit of cordiality expressed is Nobel laureate Dr Yunus's international connection and familiarity with important people the world over, particularly in the US where the Clintons were and still are well disposed towards him.
After the initial issuance of congratulatory notes and expression of warmth, now comes the turn for generous financial commitments. During the US interagency delegation's recent visit to Bangladesh, the USAID signed a development agreement worth US$200 million with the interim government. Now the World Bank (WB) has announced it will provide $3.0 billion in aid this year and the Islamic Development Bank (IsDB) pledges to make available a loan amounting to 4.0-5.0 billion in three years. The Asian Development Bank (ADB) pledged a loan of $800 million for the 2024-25 budget support during the tenure of the deposed government. This was done to help Bangladesh smoothly graduate from the least developed status and most likely it will stand by its commitment. The International Monetary Fund (IMF) approved its third tranche of its $4.7 billion loan programme in June last but not before it made the availability of the third and fourth tranches conditional to compliance of 33 obligations. Now clearing the way for the fifth tranche may not be difficult.
All this shows that the country's plunge into a crisis of Sri Lanka's order is most unlikely. Money, greenback to be precise, is finding its way into the country to the relief of the interim government. But the appearance of the financial bonhomie may be deceptive. In this connection, Finance and Commerce Adviser Dr Salehuddin Ahmed's straightforward demand for making the WB's conditionalities implementable is worth noticing. Notably, by the end of a month after the interim government's inauguration, it has sought budget support of $1.0 billion from the WB.
The streams of loan packages already made available and committed are sure to please quarters well beyond the team now at the helm of state affairs. Some of the foreign credits are most likely to be used after this government leaves office. Bangladesh's external debt has crossed $100 billion mark lately. Per capita foreign debt by March this year was Tk150,000--- a rise of Tk50,000 within three years, according to a local news agency. It should shoot up further now. The fresh doses of foreign debt burden are likely to enmesh the country in an intractable wider net not just of credit but also of commercial and political makeup.
Bangladesh's importance as a theatre of clashes of big powers' interests in South Asia cannot be overemphasised. Its importance has further enhanced with the prospect of exploiting the blue economy in the Bay of Bengal. So the powers are vying for taking it under their geo-political spheres of influence. Gone are the days of blatant way of doing so by instigating or staging military coups. This has been replaced by the behemoths of multinational companies that channelize capitals from around the least developed markets for accumulation. The recipe of tailor-made democracy hardly serves the recipient country and least of all its people.
The hidden agenda of accumulation of capital often miss the debate over democracy in the Third World. But the facts are cruel. Globalisation has reshaped patterns of production, consumption and commerce on a global scale. Of the largest 100 economies in the world, 51 were corporations and 49 countries before 2000, according to Sarah Anderson and John Cavanagh of the Institute of Policy Studies, a US think tank. The combined sales of 200 corporations were bigger than the combined economies of all countries minus the top 10. With rising clouts of the MNC goliaths, their share is likely to be greater by this time. There are complaints that big powers implements their political ambition through these corporations that control natural resources in African, Asian and Latin American countries by way of investments in development and industrialisation or activities like extraction of oil or gas and mining. Agreements are made overwhelmingly favouring the MNCs courtesy of greedy and unpatriotic elements ready to advance personal gains. Multilateral lending agencies are not unwilling to promote their agenda.
It is exactly at this point the core issue of the anti-discrimination movement encounter a formidable challenge not only from the corrupt and derelict political parties at home but also from the MNCs which are not ready to let go their grip on their business interests. The fracas over Scimitar's gas and oil exploration in Jalalabad, Sylhet can be cited as an example of how things can fall foul on casual approach to defending national resources. Committees formed recently to evaluate various agreements on projects may dig out scams involving advancement of personal or coterie gains at the cost of national interests.
A views exchange meeting on "Toward a Non-Discriminatory Bangladesh: Youth Manifesto" voiced on Tuesday last the concern about perpetuation of the culture of exploitation not sparing even the university dormitories. New generation youth leadership resents this and has rightly demanded young leaders' inclusion in business and politics. But the odds are stacked against them. They will have to stay alert and confront the combined power of outdated but entrenched political forces and the multinational corporate biggies along with their local subservient partners in business and bureaucracy. But the unalloyed sincerity of their purpose and commitment to a sacred cause of fighting for well-being of the nation is their most potent weapon. The generation Z (Gen Z) should beat off the commercial collusion of MNCs much as those may be more powerful than their governments.
Nilratan Halder
Published :
Sep 19, 2024 21:32
Updated :
Sep 19, 2024 21:32
Gen Z Revolution in Bangladesh A Beacon of hope for global justice
Ever since the takeover of the country's reins by the interim government, well wishes, congratulatory messages, assurances of cooperation and assistance, moral and material support have been showered profusely from all corners of the world. One of the reasons behind the surfeit of cordiality expressed is Nobel laureate Dr Yunus's international connection and familiarity with important people the world over, particularly in the US where the Clintons were and still are well disposed towards him.
After the initial issuance of congratulatory notes and expression of warmth, now comes the turn for generous financial commitments. During the US interagency delegation's recent visit to Bangladesh, the USAID signed a development agreement worth US$200 million with the interim government. Now the World Bank (WB) has announced it will provide $3.0 billion in aid this year and the Islamic Development Bank (IsDB) pledges to make available a loan amounting to 4.0-5.0 billion in three years. The Asian Development Bank (ADB) pledged a loan of $800 million for the 2024-25 budget support during the tenure of the deposed government. This was done to help Bangladesh smoothly graduate from the least developed status and most likely it will stand by its commitment. The International Monetary Fund (IMF) approved its third tranche of its $4.7 billion loan programme in June last but not before it made the availability of the third and fourth tranches conditional to compliance of 33 obligations. Now clearing the way for the fifth tranche may not be difficult.
All this shows that the country's plunge into a crisis of Sri Lanka's order is most unlikely. Money, greenback to be precise, is finding its way into the country to the relief of the interim government. But the appearance of the financial bonhomie may be deceptive. In this connection, Finance and Commerce Adviser Dr Salehuddin Ahmed's straightforward demand for making the WB's conditionalities implementable is worth noticing. Notably, by the end of a month after the interim government's inauguration, it has sought budget support of $1.0 billion from the WB.
The streams of loan packages already made available and committed are sure to please quarters well beyond the team now at the helm of state affairs. Some of the foreign credits are most likely to be used after this government leaves office. Bangladesh's external debt has crossed $100 billion mark lately. Per capita foreign debt by March this year was Tk150,000--- a rise of Tk50,000 within three years, according to a local news agency. It should shoot up further now. The fresh doses of foreign debt burden are likely to enmesh the country in an intractable wider net not just of credit but also of commercial and political makeup.
Bangladesh's importance as a theatre of clashes of big powers' interests in South Asia cannot be overemphasised. Its importance has further enhanced with the prospect of exploiting the blue economy in the Bay of Bengal. So the powers are vying for taking it under their geo-political spheres of influence. Gone are the days of blatant way of doing so by instigating or staging military coups. This has been replaced by the behemoths of multinational companies that channelize capitals from around the least developed markets for accumulation. The recipe of tailor-made democracy hardly serves the recipient country and least of all its people.
The hidden agenda of accumulation of capital often miss the debate over democracy in the Third World. But the facts are cruel. Globalisation has reshaped patterns of production, consumption and commerce on a global scale. Of the largest 100 economies in the world, 51 were corporations and 49 countries before 2000, according to Sarah Anderson and John Cavanagh of the Institute of Policy Studies, a US think tank. The combined sales of 200 corporations were bigger than the combined economies of all countries minus the top 10. With rising clouts of the MNC goliaths, their share is likely to be greater by this time. There are complaints that big powers implements their political ambition through these corporations that control natural resources in African, Asian and Latin American countries by way of investments in development and industrialisation or activities like extraction of oil or gas and mining. Agreements are made overwhelmingly favouring the MNCs courtesy of greedy and unpatriotic elements ready to advance personal gains. Multilateral lending agencies are not unwilling to promote their agenda.
It is exactly at this point the core issue of the anti-discrimination movement encounter a formidable challenge not only from the corrupt and derelict political parties at home but also from the MNCs which are not ready to let go their grip on their business interests. The fracas over Scimitar's gas and oil exploration in Jalalabad, Sylhet can be cited as an example of how things can fall foul on casual approach to defending national resources. Committees formed recently to evaluate various agreements on projects may dig out scams involving advancement of personal or coterie gains at the cost of national interests.
A views exchange meeting on "Toward a Non-Discriminatory Bangladesh: Youth Manifesto" voiced on Tuesday last the concern about perpetuation of the culture of exploitation not sparing even the university dormitories. New generation youth leadership resents this and has rightly demanded young leaders' inclusion in business and politics. But the odds are stacked against them. They will have to stay alert and confront the combined power of outdated but entrenched political forces and the multinational corporate biggies along with their local subservient partners in business and bureaucracy. But the unalloyed sincerity of their purpose and commitment to a sacred cause of fighting for well-being of the nation is their most potent weapon. The generation Z (Gen Z) should beat off the commercial collusion of MNCs much as those may be more powerful than their governments.
Saif
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Destination countries no less responsible for returning stolen assets: TIB
However, it is also no less a responsibility of countries or territories where the laundered money from Bangladesh have been invested and thereby helped the host economies, the statement added. It also said the richer and so-called developed countries are the main destinations and beneficiaries...
en.prothomalo.com
Destination countries no less responsible for returning stolen assets: TIB
Staff Correspondent
Dhaka
Updated: 19 Sep 2024, 19: 25
Transparency International Bangladesh in a statement on Thursday said the burden of responsibility to prevent, control and bring back laundered money lies mainly on Bangladesh’s shoulders.
However, it is also no less a responsibility of countries or territories where the laundered money from Bangladesh has been invested and thereby benefitted the host economies, the statement added.
It also said the richer and so-called developed countries are the main destinations and beneficiaries of the lion's share of Bangladesh’s laundered money.
Take immediate actions to dismantle and hold to account syndicates facilitators of accumulation of money and wealth through illicit transfers
In view of the continued national and international media disclosures of accumulation of wealth in such countries by high profile publicly exposed Bangladeshis of the fallen regime, TIB has reiterated its call upon governments of the destination countries to take concrete action to help Bangladesh expedite the return of stolen assets as part of their international commitments and responsibility.
TIB executive director Iftekharuzzaman said, “Conventional hosts of money laundering like UK, USA and proverbial Switzerland have been joined in the recent couple of decades by Canada, Australia, Singapore, Hong Hong, Malaysia, Middle East countries like UAE, especially Dubai and even many offshore island territories as attractive hosts of Bangladeshi laundered money."
"In each destination of illicit transfers, there are powerful syndicates of highly skilled law firms, trust companies, offshore specialists, real estate agents, accountants, regulatory experts, and banking and financial services companies that facilitate the secret deals," he pointed out.
Iftekharuzzaman said, "These syndicates have systematically strengthened the demand side over the years, and by providing safe and lucrative incentives to our money launderers, contributed to flows of investments in host economies in multiple sectors, especially real estate, banking and luxury consumption.”
In some cases, he also said these are outcomes of relevant government policies or policy loopholes, whether deliberate or not. Many such countries have been persistently keeping provisions to invest laundered money by various means like trusts, real estate, investment passports, etc.
If not by policy provisions or loopholes in policies, enforcement deficiencies have helped creation of heavens for the money laundering facilitators who have been systematically incentivizing money launderers of Bangladesh, Iftekharuzzaman added.
TIB executive director calls upon governments of the host countries of Bangladesh’s laundered money like UK, USA, Canada, Dubai and Singapore to proactively identify and freeze any illegal assets owned by Bangladeshi nationals or entities in their respective jurisdictions.
Take immediate actions to dismantle and hold to account syndicates facilitators of accumulation of money and wealth through illicit transfers, he said.
Iftekharuzzaman also calls for cooperating with the government of Bangladesh to start and expedite the process of repatriation of the stolen assets and hold the money launderers to account through the available international processes including mutual legal assistance and technical support.
He laid emphasis on contributing to building the necessary professional and international capacity of relevant Bangladeshi state agencies, especially ACC, BFIU, CID, NBR and attorney general’s office to collaborate and coordinate with other above-mentioned host countries of Bangladesh’s laundered money to take similar actions.
Staff Correspondent
Dhaka
Updated: 19 Sep 2024, 19: 25
Transparency International Bangladesh in a statement on Thursday said the burden of responsibility to prevent, control and bring back laundered money lies mainly on Bangladesh’s shoulders.
However, it is also no less a responsibility of countries or territories where the laundered money from Bangladesh has been invested and thereby benefitted the host economies, the statement added.
It also said the richer and so-called developed countries are the main destinations and beneficiaries of the lion's share of Bangladesh’s laundered money.
Take immediate actions to dismantle and hold to account syndicates facilitators of accumulation of money and wealth through illicit transfers
In view of the continued national and international media disclosures of accumulation of wealth in such countries by high profile publicly exposed Bangladeshis of the fallen regime, TIB has reiterated its call upon governments of the destination countries to take concrete action to help Bangladesh expedite the return of stolen assets as part of their international commitments and responsibility.
TIB executive director Iftekharuzzaman said, “Conventional hosts of money laundering like UK, USA and proverbial Switzerland have been joined in the recent couple of decades by Canada, Australia, Singapore, Hong Hong, Malaysia, Middle East countries like UAE, especially Dubai and even many offshore island territories as attractive hosts of Bangladeshi laundered money."
"In each destination of illicit transfers, there are powerful syndicates of highly skilled law firms, trust companies, offshore specialists, real estate agents, accountants, regulatory experts, and banking and financial services companies that facilitate the secret deals," he pointed out.
Iftekharuzzaman said, "These syndicates have systematically strengthened the demand side over the years, and by providing safe and lucrative incentives to our money launderers, contributed to flows of investments in host economies in multiple sectors, especially real estate, banking and luxury consumption.”
In some cases, he also said these are outcomes of relevant government policies or policy loopholes, whether deliberate or not. Many such countries have been persistently keeping provisions to invest laundered money by various means like trusts, real estate, investment passports, etc.
If not by policy provisions or loopholes in policies, enforcement deficiencies have helped creation of heavens for the money laundering facilitators who have been systematically incentivizing money launderers of Bangladesh, Iftekharuzzaman added.
TIB executive director calls upon governments of the host countries of Bangladesh’s laundered money like UK, USA, Canada, Dubai and Singapore to proactively identify and freeze any illegal assets owned by Bangladeshi nationals or entities in their respective jurisdictions.
Take immediate actions to dismantle and hold to account syndicates facilitators of accumulation of money and wealth through illicit transfers, he said.
Iftekharuzzaman also calls for cooperating with the government of Bangladesh to start and expedite the process of repatriation of the stolen assets and hold the money launderers to account through the available international processes including mutual legal assistance and technical support.
He laid emphasis on contributing to building the necessary professional and international capacity of relevant Bangladeshi state agencies, especially ACC, BFIU, CID, NBR and attorney general’s office to collaborate and coordinate with other above-mentioned host countries of Bangladesh’s laundered money to take similar actions.
