KARACHI, March 15: The two powerful institutions of the country — the National Accountability Bureau (NAB) and the Central Board of Revenue (CBR) — took such a hasty and quick retreat this week that it has left 150 million people of the country guessing as to where the authority lies. Is the authority with the national institutions or it is with those who have amassed tons of money in a “no questions asked” system of the economy?

On Monday the NAB announced to call off the probe into sugar scam because its spokesman pointed out that millers have threatened that sugar prices will go further up if investigation is not stopped forthwith.

“We do not want to be held responsible for sugar price hike”, the NAB spokesman said on Monday declaring in a loud tone the helplessness of an institution that has no qualms in picking up women for investigation from their homes in dead hours of the night.

On March 8 a newspaper report revealed the launching of a computer programme “Nexus” that would closely monitor about 100 to 150 big taxpayers of income and sales tax and customs duty. The CBR according to this report want to gather information on the investment being made in the stocks, credit cards and bookings in the five star hotels.

Within 24 hours, a spokesman of the CBR contradicted this news item calling the report “totally baseless, incorrect and misleading”. Even after this firm denial the news report created a rumpus in the stock exchange and as much as about 1,200 points of the 100-share index of the Karachi Stock Exchange went down within a week. More than Rs420 billion were wiped out from the market capitalization leaving many small investors in lurch.

How would one explain the conduct of sugar millers who according to the NAB spokesman warned of sugar prices going up further if investigation is not stopped and the knee-jerk reaction of the super rich stock brokers who created an environment in which investors were forced to unload their shares.

Much before the NAB was directed to investigate sugar scam, after sugar prices touched Rs44-45 a kg in the retail market, Dr Ashfaq Hasan Khan, an adviser in the finance ministry, offered detail figures of sugar hoarding till end of January to the prime minister’s price committee.

December, January and February are the peak sugarcane crushing periods when sugar mills inventory is full to the brim. This is a time when mills want to maintain a steady supply to the wholesalers so that they clear their loans with the banks borrowed for purchasing cane from the farmers.

This year, the millers allege that farmers obtained a very high price, in some cases as high as Rs100 for a maund. But by end of January 2006 Dr Ashfaq Khan disclosed that 17 mills of Punjab were hoarding 68 per cent of the stocks. These mills are owned by the powerful political and business families belonging to the ruling as well as the opposition parties.

Obviously, the millers have now a much bigger financial capacity to hold sugar with them because they have paid, according to their own assertion, a much higher price to the farmers. The hoarding is on the expectation of a much higher return as manifested in domestic sugar prices going up to Rs45 a kg.

With this money power and the political influence because of their presence in the federal and the provincial cabinets, in the senate and in the national and provincial assemblies, the sugar millers have been successful in reverting back the decision of President General Pervez Musharraf and Prime Minister Skauhat Aziz.

Abdullah Yusuf, chairman of the CBR, is an “outsider” for the tax bureaucracy and is therefore unpopular among his colleagues. Scratch any career tax officer and he will burst out against the chairman. This hostility of career tax bureaucrats for their chairman has elevated Abdullah Yusuf’s position in the eyes of the ordinary citizens. If he was taking some innovative steps to ‘broaden the tax base’, improve the tax-GDP-ratio and net in new taxpayers. It was expected of him.

But the CBR was doing nothing new to gather information about the “fat cats” from the external sources like mobile phone companies or five star hotels, airlines, utilities and also keeping a track on investment in stocks. The tax agencies do it world over. In India the tax hounds even raid the houses to find out undocumented assets.

In last couple of years, the stock brokers have been the biggest beneficiaries of Pakistan’s banking system. They obtained unlimited amount of loans at dirt cheap rates. With this borrowed money the stock brokers played havoc with the lives of 150m Pakistanis. The share prices touched sky and fell down rendering in process thousands if not millions pauper. The real estate prices are up. The commodities are getting scarce.

No wonder, the CBR effort to track capital gains, document real estate transactions and regulate commodity business is proving futile. The people of Pakistan were never so helpless as they are now. Alas! there is no Habib Jalib to motivate them “Khet waderon se cheen lo (snatch fields from the feudals), Karkhane luteron se cheen lo (take factories from dacoits) Rahe na koi alijah (Let there be no high and mighty).”