The amount of money smuggled through false information on imports and exports is estimated at $8-9 billion a year. Adding the money of politically influential and corrupt individuals, the total would amount to $12-15 billion, said Dr Iftekharuzzaman, executive director of Transparency International Bangladesh (TiB).
He said many people, mostly the politically influential, are smuggling a lot of money to Canada's Begum Para, Malaysia's second home programme.
He made these remarks at an event, titled "Offshore Wealth of Developing Countries: Impediment Towards Inclusive Growth," jointly organised in Dhaka by the Economics Study Center and EMK Center on Saturday.
At least 80% of the total amount of money that is being laundered from the country is done through over and under-invoicing in the export-import trade processes, experts said at the event, estimating that the actual figure of smuggled money is likely way higher than what various global agencies including the Global Financial Integrity (GFI) put.
Absence of good governance, lack of proper enforcement of laws, and lack of political will are leading to huge amounts of money being smuggled out of the country every year, they viewed.
Speakers in the event pointed out that the laundering was causing the government's revenue collection to go down and much needed allocations were hampered for important sectors like social security, education and health.
Dr Mustafizur Rahman, distinguished fellow, Centre for Policy Dialogue (CPD), said at the event, "In the past, money laundering took place in developed countries, but now 85 percent of the money is smuggled out of low-earning and developing countries."
He said rich countries are luring in capital from poor countries with various incentives including zero duty facility.
"Our government is unable to spend even 7-8% of our GDP on social security, education and health," he said adding, "Bangladesh lags far behind other developing countries in terms of Tax GDP. If the smuggling of capital was prevented, the income of the government would increase and the allocation for the poor would also increase."
Mustafizur thinks that it is possible to prevent money laundering through the goodwill of the government and strict implementation of law.
He said that institutional capacity needs to be enhanced for this purpose.
However, he added that public opinion against money laundering is increasing in developed countries. He said the civil society of rich countries is pressuring the government against money laundering. Governments are also becoming aware that money laundering is linked to crime and human trafficking.
Dr Iftekharuzzaman said if anti-corruption commission, Bangladesh Bank, Attorney General's Office and other government agencies take concerted efforts, it is possible to prevent money laundering and bring back the siphoned off sums.
He pointed out that in 2012 it was possible to bring back the money smuggled by the son of the former prime minister simply because of the political goodwill of the government.
"Though the legal framework is stronger than it used to be, no new initiatives are being taken to recover smuggled money as the government does not have the political will," he said.
He added that foreigners working in Bangladesh are smuggling a large part of their income. That's $2 billion a year. Although there is no rule for Bangladeshi workers to pay for visas to go abroad, more than $2 billion is being smuggled into the sector every year. He advised that the government take all these incidents seriously.
Asif Iqbal, Joint Director, Bangladesh Bank, said that there was room for doubt about the veracity of the money laundering report as the government did not have enough data.
He said that even though foreign agencies have mentioned a certain amount of money being laundered, their reports do not really portray the whole scenario.
"The problem is there is no such database," he said.
He added that there is a tendency among the middle class to sell everything and go abroad. That too is coming as part of illicit finance.
Again, there is no account of how much money is smuggled through international couriers. A lot of money goes to other countries through Dubai through small courier services.