PKR flayed Datuk Seri Najib Razak today for “abusing” diplomatic channels to allay his fears over his political foes’ source of election funds when he had ignored reports on the Malaysia’s staggering illicit fund outflows.
In a statement today, the party said it was shocking that the prime minister had so easily dismissed Global Financial Integrity’s (GFI) recent report on Malaysia’s RM888 billion in illicit capital leakages.
Finance ministers in any other country, it added, would have been alarmed by the sum.
“Given the gravity of this, it is best that the prime minister concentrates on managing the country’s economy prudently and acting promptly on alarming revelations contained in GFI report.
“He has no business going around abusing diplomatic channels to undermine Pakatan Rakyat and (PR de facto leader) Datuk Seri Anwar Ibrahim,” PKR strategy director Rafizi Ramli said in the statement.
He added however that Najib’s prompt action over fears that the federal opposition was being funded by Saudi Arabia’s royalty was symptomatic of Umno and Barisan Nasional’s “obsession” with character assassination.
A CNN report revealed yesterday that Najb had complained of the opposition’s possible source of funds for its election war chest and had sparked off a secret investigation to allay his fears.
The international broadcaster claimed the Malaysian authorities suspected two senior Saudi princes of involvement in funding Anwar, and this had led to the secret investigation by Riyadh.
CNN however said that a secret Saudi intelligence report had revealed that there was no evidence of any Riyadh official funding Anwar but found a fundamentalist Muslim organisation whom some bloggers linked to the opposition leader had benefited al Qaeda through its support of politicians in Muslim countries.
A secret report seen by CNN concludes: “There is no evidence any Saudi official ever supported Anwar Ibrahim” and “claims of support from the Saudi royals named in the initial report [names redacted] were found to be without basis.”
Several bloggers have linked Anwar to the group, Muslim Brotherhood, but the opposition leader said today the issue showed Najib feared Pakatan Rakyat’s (PR) political relevance.
Earlier today, Anwar said he would not be surprised if Najib had complained as reported, claiming the latter was becoming anxious over the federal opposition’s widely-publicised reform plans — spelt out in its “Buku Jingga” launched last month — which contained instant reform measures to be implemented by PR within the first 100 days of taking over Putrajaya.
Rafizi echoed his leader’s sentiment, pointing out that Najib’s call for the probe had likely been fuelled by fear that the federal opposition was fast making headway with voter support.
“It seems to be their only way to meet political change. When challenged for a debate on PR’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 US$32 billion (equivalent to RM98 billion annually), we discover that he was more pre-occupied with a personal probe on Anwar,” Rafizi said.
He opined that instead of probing the source of his enemies’ funding, Najib should concentrate on his duties as prime minister and finance minister by ordering an “all-party” probe on GFI’s report.
He noted that as GFI’s method and data was bona fide and globally accepted, Najib needed to pay immediate attention to the report.
“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 the data used is available publicly and announced by Bank Negara Malaysia periodically,” said Rafizi.
He added that Najib should also pay attention to the central bank’s statistics that persistently showed large negative “errors and omissions” in the balance of payments since 2005.
“This 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),” he said.
Rafizi pointed out that according to Bank Negara’s estimates, the total sum of probably underestimation of outflows in Malaysia between 2005 and 2009 is RM120.8 billion.
“This is an official statistic from the Malaysian government that provides a degree of correlation to the GFI report on the illicit fund outflows of the country,” he said.
Malaysia registered the fifth-largest amount of illegal money outflows among developing countries during between 2000 and 2009, according to the report by the US-based financial watchdog GFI released this month.
The report titled “Illicit Financial Flows from Developing Countries: 2000-2009” said illicit financial outflows from Malaysia totalled US$291 billion (RM888 billion) in that period.
Illegal money outflows from Malaysia tripled to US$68.2 billion in 2008, from US$22.2 billion in 2000, said the GFI.
The transparency watchdog defines illicit financial flows as generally involving the transfer of money earned through illegal activities such as corruption, transactions involving contraband goods, criminal activities, and efforts to shelter wealth from a country’s tax authorities.
