Najib Should Focus On Managing The Economy, Not Witch-Hunting Pakatan Rakyat Leaders

Parti Keadilan Rakyat is appalled to discover the length that Prime Minister Dato’ Seri Najib Tun Razak had gone to push the Saudi Government for a probe on alleged Saudi’s funding of opposition parties in Malaysia, especially when he had not responded to mounting calls for an all-party probe on GFI (Global Financial Integrity) report that Malaysia’s illicit fund outflows reached USD291 billion (equivalent to RM888 billion) for the period 2000 to 2008.

The Prime Minister’s act of abusing a diplomatic channel to press for a probe against a democratically elected Leader of Opposition 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, 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 USD32 billion (equivalent to RM98 billion annually), we discover that he was more pre-occupied with personal probe on Dato’ Seri 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 Malaysia periodically.

In light of this, any Finance Minister would have been alarmed, especially when Bank Negara Malaysia’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 as follows:

 

Year

Negative “errors and omissions” in RM billion

2005

27.8

2006

27.4

2007

17.8

2008

29.9

2009

17.9

Source: Bank Negara Malaysia, November 2010

The total sum of probable underestimation of outflows reported by Bank Negara Malaysia in between 2005 and 2009 is RM120.8 billion – an official statistic from the Government of Malaysia 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 Dato’ Seri Anwar Ibrahim.

Finally the table is turned around – 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

DIRECTOR OF STRATEGY

28 JANUARY 2011

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