Sunday, February 15, 2015

Who is plundering Malaysia’s wealth?

A staggering total of US$395 billion was siphoned out of Malaysia in illicit financial flows in 2003-2012.  Malaysia has the ignominy of being the top fifth country globally for illicit financial outflows (India nudged Malaysia from 4th to 5th place in 2014). According to the Global Financial Integrity report, Malaysia alone contributes to 6% of the total global illicit flows from all developing countries.

Putting it another way, for every US$1.0 of foreign direct investment that Malaysia received in 2012, US$5.0 was being smuggled out of the country. This is only a conservative estimate as the methodology to estimate the outflows is very rigorous based on reported balance of payment and trade statistics ( has the details). Close to 20% of Malaysia’s GDP is being stolen and spirited away overseas and kept in safe havens as either cash or invested in assets. While the volumes have been declining since 2010, the question is how can such plunder on a national nay international scale, mostly through deliberate trade misinvoicing, escape the notice of Bank Negara, the Royal Malaysian Customs and the Royal Malaysian Police.
Let us look at another recent revelation through secret Swiss banking files of 30,000 accounts that were leaked last week (the Swiss Leaks). Malaysia is ranked 87 among the countries with the largest dollar amounts stashed away with one notable Malaysian who has squirreled away US$68 million. The International Consortium of Investigative Journalists (ICIJ) has named a member of the Pahang royal family. Unfortunately the ICIJ site  does not allow access to country level data which will reveal who are the other Malaysian luminaries who prefer to keep their money in secret accounts in Switzerland rather than in Malaysia.

Given that the top 10% own 40% of the total wealth of Malaysia (see previous post), we can safely assume that it is not the average struggling Malaysian taxpayer who is stealing the national wealth. Let me offer some questions to the Inspector General of Police and the Governor of Bank Negara. Which Malaysia based individuals and firms are well positioned to carry out trade invoice shenanigans? How many of these are either proxies or linked in some form to the Barisan National political parties and networks? How many current or former Malaysian political leaders have interests in these businesses? How can such a huge amount of money leave Malaysia without the tacit complicity of the authorities? I can't wait for a tweet on these questions from the Inspector General of Police.

Saturday, February 14, 2015

Repeal Section 377

The jailing of Anwar Ibrahim for allegedly consensual sex with an adult male puts Malaysia in the spotlight for being rabidly homophobic. Whether Anwar is guilty or innocent of this charge is not the issue here (although the tainted court process and evidence of political chicanery has put Malaysia’s entire judiciary on trial, never mind the credibility of the Government). The real question is why is consensual sex between two adults of the same sex a heinous crime in Malaysia?

To put it simply, Anwar is in jail today because of the British colonial Raj in India. The British Raj introduced Section 377 of the Indian Penal Code which was drafted in 1860! So 155 years later, in the age of Fifty Shades of Grey, poor Anwar is being subject to the moral rectitude of the British Raj. Section 377 of Malaysia’s Penal Code modeled after the Indian Penal Code (note the same section number!) criminalizes carnal intercourse against the order of nature i.e. oral and anal sex. Yes even oral sex between heterosexual adults.

So clearly we have an antiquated law. But how many times has this law been enforced in Malaysian history? According to Simranjit Kaur Gill, there have been a grand total of seven charges brought under this law since 1938. Four out of these seven charges were connected to Anwar! Hmmm….do the words selective prosecution, abuse of the legal process, witch hunt and political persecution come to mind?

What have the Indians done with their Section 377 of the Penal Code which was the fountain of the sodomy laws for the Commonwealth? Why, they repealed it of course: in 2009. Two years earlier, Singapore modified Section 377a of their Penal Code to exclude consensual oral and anal sex (well in typical Singaporean fashion of course). So where does that leave Malaysia?

Leaving religion out of the bedroom (I know I know…JAKIM would have less to do) and with apologies to the Sharia fans out there (sorry folks stoning and decapitation are so retro), it is time to follow the Indians (there has been no surge in homosexuality in India since 2009 and the right wing Hindus there are as equally worked up over sexual morality as our Malaysian Sharia advocates).

So let us repeal Section 377….and free Anwar, taking another step towards a more inclusive Malaysia.