Black money culture in Bangladesh

by Razu Ahmed    December 24, 2007

Black money holders are controlling the economy of Bangladesh. Of the thousands of crores of black money flooding the economy the army-backed government’s anti-corruption drive is not too strong compared to the strength of black money. The most conservative estimate that puts the current total of black money at Tk 50,000 to 60,000 crore or one-fifth of the GDP, which Bangladesh Economic Association figures is no less than Tk 175,000 crore.

Bribery, corruption, smuggling and manipulations in import are generating the black money. The larger chunk of black money is transferred abroad and only a little goes into the fixed deposits, while the black money owners spend the rest on posh living.

This is most evident, they say, from the fact that in 30 months to June last, the total amount of fixed deposits — a common destination of black money — grew by Tk 14,735 crore to Tk 43,612 crore from Tk 28,877 crore in December 2001, according to Bangladesh Bank (BB) statistics.

Black money makes no positive contribution to the economy. It plays no positive role in employment generation, production or any other sector. On the contrary, it has a severe impact on inflation that affects the poor. The unlimited expenditure of black money owners also leads to higher import and increase in commodity prices.

The government must take tough steps to stop tender manipulation, over and under-invoicing in import, and bribery and corruption in the administration, besides improving the governance, so that the ways to make black money are closed. But previous governments have given chance to whitening black money without or minimum tax. But all o those steps failed. From January 2007, Present Anti-corruption activities attacked black money holders. But there are no activities against the root of black money culture. So most of people think all way of black money generation will activate again after this anti-corruption drive.

Government has taken multiple steps in their lines to seal the sources of black money.

NBR (National Board of Revenue) have opened a central intelligence cell to detect major tax evasions and seal leakage in the tax administration. The Board is also auditing some selected major taxpayers and has some more plans in the pipeline. Bangladesh Bank (BB) has formed an anti-money laundering department under the Money Laundering Prevention Act. This department is working hard to bring all sorts of money laundering to task. But the only real way to stop black money generation is a strong political will. This is impossible if corrupted capitalist political parties would capture the power again.   

This work is licensed under a Creative Commons Attribution 3.0 License.

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