The finance minister has asked MPs for solutions to what he labels as the problem of money being siphoned out of the country.
He is missing the bigger issue. Our basic laws on flows of capital are simply not fit for purpose.
Currency regulations need to be modernised so that transactions which are perfectly legal in other countries are not considered money laundering in the first place.
The law should differentiate between illegally earned money being sent abroad, and the freedom of citizens to spend their own money as they see fit.
Our current currency controls are an affront to freedom and based on an outdated mindset, which believes that policy goals can be willed by bureaucratic fiat.
It is the very rigidity of such current controls which actively encourages foreign exchange payments via informal channels, contrary to the very aims of anti-money laundering laws in the first place. It also unnecessarily increases scope for corruption.
The government should not see it as its job to restrict people sending legitimately earned money abroad for legitimate reasons.
Even countries such as India, which have shared the same outdated restrictive mindset as Bangladesh, now have more liberal exceptions that allow people to transfer money overseas for the purposes of education, health and investment.
We should be bolder and have a free currency exchange regime so there is no incentive for people to hide their capital and income. Deregulating controls can help the economy by eliminating incentives for bypassing the law and attracting more capital for investment.
