Gap in export earnings indicates skullduggery

The world is currently passing through volatile times with economies either crumbling or having to face rough times with Bangladesh also embracing austerity and cost saving measures. Even the most optimistic outlook will demand prudence at this moment. With no place for complacency, Bangladesh needs to keep the forex reserve intact, minimise import of non-essential products and crackdown on murky financial mechanisms which were used in the past to illegally siphon off money overseas.

While the country has braced austerity in almost all aspects of life, a TBP report reveals that Bangladesh exported goods worth $359.21 billion in the last ten fiscal years, but repatriated $314.37 billion till date. The remaining $44.84 billion is yet to be tracked down, and experts believe a significant portion of this sum may have been laundered.

Understandably, this huge aberration in the books need immediate probe because at this moment, every developing country is attaching foremost priority in maintaining a healthy foreign exchange reserve. For Bangladesh, the reserve recently fell below $ 40 billion, which triggered fears that this nation may be heading to a fate similar to Sri Lanka.

While most economists feel that Bangladesh won’t be in a precarious position as her South Asian island neighbour, pre-emptive measures are essential to forestall any economic catastrophe.

At this point, all out efforts are required to ensure that Dollars, the currency with which most import related payments are made, are not sent out unlawfully. The newspaper approached a number of exporters, and officials of the Export Promotion Bureau and central bank, but none could provide a valid explanation of the massive gap in export earnings. Industry insiders say a gap of 5 per cent – 6 per cent is normal, but 12.48 per cent is extremely unusual.

The Policy Research Institute (PRI) has deemed this gap a glaring aberration calling for a cell to investigate the matter.

In layperson’s language, after exporting, the goods are inspected by a third part and the products are received by Clearing and Forwarding agents. Then all liabilities regarding the goods fall on buyers and following submission of relevant bank documents to designated banks, payments are cleared within two to three months. In some cases, there is delay with cases lodged when buyers failed to pay within a year after shipment.

Industry insiders have further said that there can be a 5 to 6 per cent gap between export and earnings because sometimes, when exporters miss the deadline, buyers are compelled to charter special vessels, either on water or air, for goods shipment. The cost of this is deducted from the exporter. This is the general procedure, however, from the information gathered, it appears that around $ 45 billion – a staggering amount is untraceable.

Since no definitive answer could be found on the matter, it’s the duty of the Bangladesh Bank to take this issue with due seriousness because unless there is a rigorous probe, loopholes in exports will continue to be exploited to launder money.

Just recently, Bangladesh Bank issued show cause notices to the managing directors (MDs) of six banks for their alleged involvement in dollar manipulation.

According to central bank source, a dozen more banks have been brought under investigation and foreign exchange transaction information has been sought from all these banks.

From the recent actions of the central bank plus the information unearthed by The Business Post, it’s safe to state that for some time, a shady operation had been going on under the guise of legal export.

With the world sliding towards an economic recession, each and every Dollar owed to the country needs to be brought into account. The current global economic turmoil may be looked upon as a silver lining because without the hardship the massive gap in export earnings would have gone unnoticed.