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Black money 'too tough to control' in Bangladesh

Publication Date : 23-04-2012

 

Bangladesh's Finance minister and the Finance secretary yesterday blamed the democratic system of government for the compromise over whitening black money (untaxed money) that is too tough to control.

They made the observation at a pre-budget discussion with the Economic Reporters' Forum (ERF) at the finance ministry in the capital.

"The democratic government is proficient in the art of compromise,” Finance Minister AMA Muhith said on giving the chance to whiten black money by successive governments.

He said a chance was given to whiten black money in the first year of this government. In the following year, it was stopped but allowed again in the stockmarket in the third year.

"I do not know what will happen this year,” he said.

Black money becomes a topic of debate almost every year before the announcement of the national budget. The Bangladesh Nationalist Party-led governments from 1991 to 1996 and from 2001 to 2006 also legalised black money.

Surprisingly, Muhith pinned the blame on foreign currency earners for generation of black money, without considering bribery and corruption that are believed to be its major sources. But the minister did not explain how remittances generate black money.

Finance Secretary Mohammad Tareque said there is no economy without black money in the world, and profiteering by individuals generates black money.

"It (black money) will be there in capitalism,” he said.

India has long been trying to control black money, but has not succeeded yet, said the secretary.

In his introductory speech, Muhith said the upcoming budget for fiscal 2012-13 would be around 190,000 crore taka, of which 54,000 crore taka is meant for development programmes. (One crore is equivalent to 1,000,000.) 

The minister said the budget is likely to be tabled in parliament on June 7 and to be approved on June 28.

He said containment of inflation and bank borrowing would remain as two major challenges in the coming year.

Muhith said he is optimistic about attaining GDP growth target of 7 per cent.

He also said that Bangladesh's budget deficit remains within the limit.

Muhith said multi-level marketing has been in operation in many countries across the globe for the last 30 years, but it requires special laws.

"The problem with MLM here is, it gets involved in banking operations cashing in on loopholes of cooperative laws.”

The minister said initiatives will be taken to change cooperative laws.

ERF President Khawza Mainuddin and General Secretary Abdur Rahim Harmachi also spoke at the discussion.

 

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