Foreign workers doubled cash outflow to RM20b in three years, Parliament told

KUALA LUMPUR, Nov 11 — Remittances by legal foreign workers doubled from RM10 billion in 2009 to almost RM20 billion last year, Deputy Finance Minister Datuk Ahmad Maslan revealed today.

The top five countries that received remittances from Malaysia in 2012 are Bangladesh (RM3 billion), Indonesia (RM3 billion), Nepal (RM2 billion), India (RM625 million) and the Philippines (RM561 million).

“Now, we also allow money changers to remit money since 2011,” Ahmad told Parliament here today, when explaining why the amount of remittances doubled in just three years.

“Before this, the institutions that could provide remittance services were limited to Western Union, Merchant Trade, IME and Max Money... there were only 42 bank and 34 non-bank institutions, totalling 77 institutions back then with remittance services,” he added.

According to Deputy Home Minister Datuk Wan Junaidi Tuanku Jaafar last month, there are 2.1 million registered foreign workers in Malaysia.

Deputy Human Resource Minister Datuk Ismail Abd Muttalib was reported by English-language daily the New Straits Times in July as saying that there are 1.3 million illegal immigrants in the country.

“With the ups and downs in the global financial market, Malaysia has experienced a moderate capital outflow,” said Ahmad today.

“Capital outflow is happening in an organised manner and it does not affect the economy,” said the Pontian MP, adding that Putrajaya does not have figures on the money remitted by illegal foreign workers.

Ahmad said that remittances by legal foreign workers have been increasing from RM13.4 billion in 2010, to RM15.7 billion in 2011 and to RM19.8 billion in 2012.

Ahmad also said that the Global Financial Integrity (GFI) was mistaken in its calculations that US$285 billion (RM860 billion) has been sent out of Malaysia illegally from 2001 to 2010, with the US-based non-profit research and advocacy organisation ranking Malaysia the third-highest among developing countries in illicit capital outflows.

He stressed that the figure was an over-estimation and that it was wrong to attribute the illicit capital outflow to corruption.

“It is due to trade mispricing,” said Ahmad.

Trade mispricing is the practice where businesses funnel illicit funds abroad by under-invoicing exports or over-invoicing imports.

“To say it is corruption is inaccurate,” said Ahmad.