Less than 1% recovery of black, laundered money to boost state coffers by Tk15,000cr: BEA

The Bangladesh Economic Association (BEA) has said the recovery of less than 1% of black and laundered money in the last 50 years can add Tk15,000cr to state coffers.

"The estimated amount of black money generated in Bangladesh over the past 50 years, from FY73 to FY23, is around Tk1,32,53,500 crore. In the upcoming budget, we recommend recovering only 0.98% of this money, which would amount to Tk10,000 crore," said the association's General Secretary Prof Md Aynul Islam in a press conference at its Eskaton office in the capital on Monday (3 June). 

"The estimated amount of laundered money in the last 50 years is around Tk11,92,815 crore. We recommend recovery of 0.49% of the total laundered money, which will amount to Tk5,000 crores," he said.

The BEA proposed a budget of Tk11,95,486 crore for the forthcoming 2024-25 fiscal year, relying on the recovery of black and laundered money. This amount is around 1.57 times higher than the current fiscal year's proposed budget of over Tk7.60 lakh crore.

The association also called for the establishment of an Independent Commission on Corruption, Black Money, and Financial Mismanagement. 

In addressing a question regarding black money recovery, Jamal Uddin, the former general secretary of the association, said, "Political will is needed to recover the money. Recovery is possible with strategic actions. For instance, the implementation of a full digital payment system could potentially track black money."

Responding to another query, Abul Barkat, former president of the BAE, said, "Black money exists in various forms across Bangladesh— it is stashed in safes, gold and land. Often, the declared registration amounts during land and property purchases fall short of the actual values."

"A study on the magnitude of black money in Bangladesh was conducted by the Ministry of Finance a decade ago, yet its findings were not made public. It was suggested that the annual volume of black money could range from 33% to 66% of the GDP. In our estimation, it averages around 33% of the GDP," Abul Barkat added.

Last year, the BEA put forward a Tk20,94,112 crore alternative budget. When questioned about the reduction this year, Barkat told TBS that the decision was influenced significantly by the declining economic conditions.

BEA President Qazi Kholikuzzaman Ahmad said, "The government has a zero-tolerance policy on corruption but corruption in the country is widespread and deeply rooted. If corruption persists, it will be difficult for the country to move forward in the desired direction. We welcome the recent action initiated against two powerful persons involved in corruption.

"I want to point out some problems that have been going on for a long time like the crisis of good governance in the banking sector, the high level of non-performing loans and the turbulent condition of many banks including public and private banks." 

He said that according to the Bangladesh Bureau of Statistics data, the income inequality in the country has increased markedly. The Gini coefficient, which measures inequality, increased from 0.45 in 2010 to 0.50 in 2022 which is "very worrying."

The finance minister is scheduled to present a budget of Tk8 lakh crores on 6 June.

Kholikuzzaman Ahmad said, "A vicious cycle prevails within the banking sector. Such circles exist in the onion, potato, and dollar markets. Within banking, certain individuals wield considerable influence in granting or getting loans. Failure to curb their influence stymies progress, thwarting government objectives."

"We [BAE] can only offer counsel. Those responsible for decision-making [the authority] must be held accountable," he added.