KUALA LUMPUR, Dec 17 — Errors and omissions (E&O), which are bound to occur in the statistical compilation of Malaysia’s exports and imports because of its highly open economy, should not be interpreted as a substantial outflow of illicit funds.
Bank Negara Malaysia Assistant Governor, Marzunisham Omar, said due to this, it was unfair for some quarters to label Malaysia as one of the most corrupt nations in the world.
He said Malaysia’s E&O of the balance of payments had averaged at two per cent of total trade, well below the five per cent benchmark threshold prescribed by the International Monetary Fund.
“It is much lower than the US’ E&O of seven per cent,” he told a press conference here today.
Illegal capital outflow, which falls under the category of unrecorded transactions, is one of the possible causes of omissions; the others being incomplete sample size and smuggling of goods.
BNM yesterday said a report by an external non-governmental organization had raised the issue of substantial illicit financial outflows from developing economies.
The central bank said the report acknowledged that the use of re-export hubs overstated the magnitude of trade mispricing.
Nonetheless, BNM said, the removal of re-exports via Hong Kong was not significant for Malaysia as Malaysia’s trade with Singapore that was for re-export was more than thrice the size of Malaysia’s trade with Hong Kong.
BNM highlighted that if re-exports via Singapore to Malaysia’s top 10 trading partners were included, these would reduce Malaysia’s trade mispricing by about 70 per cent. — Bernama
