Elections are globally expensive, and Pakistan is no different on this count. More than the public cost, however, the liberal election spending of political parties and their candidates drives the total outlay to absurd scales. In 2018 contestants competed fiercely using all the tricks in their bags, especially money — oft considered the most effective tool — to impress constituents. From chartered planes, bulletproof four-wheelers, security details, floats, flags and feasts … the spending knew no bounds. With big money changing hands within a rather short span, it is relevant to identify the …

In this special report, the Dawn Business & Finance team tries to estimate the cost and evolving patterns of electioneering that allowed businesses and services to make hay while the sun was still shining during the canvassing phase

AS the democratic system in Pakistan evolves and reinvents itself, so does the election business.

Government spending has increased manifold with marked improvements in the regulatory framework to ensure better management of the massive exercise. The expenditure by political parties and candidates has also increased; but while this escalation was steeper in 2013, it has since moderated.

An intelligent guess puts the financial cost of the impending elections at a whooping Rs440 billion, 10 per cent higher than the total cost of the 2013 elections. The projection is a consolidated estimate, inclusive of funding from all sources — the Election Commission of Pakistan (ECP), federal and provincial governments, security establishment, donors, political parties, candidates and their supporters.

The share of the ECP, government and donors spending is verifiably documented and claims a bigger share of the spending pie this time around. Still, in the current projection this amount makes up hardly one-fifth of the total. It is hard to accurately quantify the budget of political parties, candidates and their supporters because of the cash component in dealings for election-related goods and services.

The lax legal framework addressing election finances in Pakistan provides ample loopholes to aspiring legislators and parties to use, or abuse, as many finances as they can muster to browbeat their opponents. The said law bars illegal avenues but ignores the most financially resourceful segment — the corporate sector. There is nothing in the relevant section of the law that realistically deals with corporate funding of political campaigns in the country.

“Money can only come from segments where wealth has been amassed. A lot of hidden wealth in Pakistan surfaces and circulates to fund electioneering, but to assume that it is sourced entirely through the black economy would simply be wrong. There is enough depth in the parallel cash-based economy to afford an activity of a monumental scale,” commented a market watcher.

“A service or material provider is indifferent to the mode of payment. If at all, they prefer cash over money transfers through banks which are recorded and liable for declaration and taxation,” he added.

“When spending runs in billions it reflects the mobilisation of high net worth individuals and entities in a country like Pakistan. This kind of circulation is hard to imagine if you take the baron/banker/broker nexus out of the matrix. It should not be hard for anyone to understand why they are reluctant to own their contribution,” he said hinting at ‘electables’ and their social circles in all parties.

Various clauses in the Election Act 2017 provide a guideline of financial conduct for candidates in an attempt to keep election spending within specified limits, but such limits are not extended to cover political parties and supporters of candidates who may pay electioneering bills without seeking candidates’ permission. Besides the specified spending limits are considered unrealistically low thereby nudging people to disregard them.

“The dissection of the election cycle provides a rare insight into the anatomy of a transformational society”

In the current Act, the ECP revised up the spending limits on candidates from Rs1 million to Rs2m for the Provincial Assembly and from Rs1.5m to Rs4m for candidates of the National Assembly. All serious candidates, irrespective of party, routinely cross the limit. The post-election filing of accounts is hardly an issue as creative accounting can save the day.

The ECP’s budget increased from Rs1.8 billion in 2008 to Rs4.6bn in 2013. For the current elections, the limit was increased to Rs21bn by the outgoing PML-N government, according to official documents and reconfirmed to Dawn by the ECP’s Director General Budget.

The spending heads of the budget included delimitation of constituencies, revision of electoral rolls, trainings, purchase of vehicles, payment to polling agents, election material, printing of ballots, security arrangements and voter education. Through simple math one can glean that the per-vote cost to the ECP shot up to Rs198 in 2018 compared to Rs58 in 2013 and Rs22 in 2008.

According to senior officials of the Free and Fair Election Network (Fafen), key drivers of the ECP spike in spending were the revised stipends for the temporary staff drawn for election duty all across the country and printing of ballot on waterproof, expensive paper, to ensure better management of the exercise.

Beyond the government and donors, identifying the money trail is not just difficult but nearly impossible owing to the cash factor. There is no clear bifurcation in resources raised by candidates and parties.

In an informal survey by Dawn, in which scores of candidates belonging to major contesting parties were interviewed, it was found that almost all candidates conducted their campaigning on their own or through resources that they themselves raised. Privately each one accepted that the spending was way beyond the specified limit.

A market survey of goods and service providers of electioneering material reinforced the perception that expenditure per candidate was indeed more than the limit.

Yet budgets are not homogeneous across regions and constituencies. Compared to urban constituencies, rural constituencies are larger in terms of geographical area and generally considered more expensive because of a lack of physical infrastructure. The transport budget is higher there. Hotly contested seats also need greater investments, particularly in certain cities of Punjab.

A closer study of campaign spending by parties and candidates sheds light on the changing composition of budgets overtime to match the demands of a fast transforming society in an age of robust electronic and social media. This evolving strategy has hurt those market players who failed to grasp the situation, while generously rewarding smart entrepreneurs. The share of many traditional businesses such as panaflex posters and banners shrank significantly whereas that of electronic media, flags and floats expanded.

In rural Pakistan, the use of bags of rice and wheat to cultivate support continued and demand for commodities increased enough to affect supplies in urban centres. Besides regular spending on running camps and offices, an additional head of managing canvassing on social media had to be incurred by parties and candidates.

According to Dawn, based on an estimate of total election spend of Rs440bn, spending per registered voter (estimated by dividing the projected election economy by the total number of voters) almost doubled from Rs2,469 in 2008 to Rs4,651 in 2013 but marginally moderated to Rs4,150 in 2018.

We now know the share of the ECP is Rs21bn, the collective share of donors and different tiers of government and security establishment can’t possibly exceed Rs19bn. Thereby, after subtracting Rs40bn out of the total Rs440bn, the residual Rs400bn falls in the accounts of candidates and parties. Legally all contestants in effect are allowed to spend Rs10 per voter (Rs4m for an average voters’ pool of 400,000 for the NA and half the amount (Rs2m) for about 200,000 voters for the PA).

“The dissection of the election cycle and assessment of election spending provide a rare insight into the anatomy of a transformational Pakistani society,” an observer commented.

The above-mentioned survey also showed that besides big-budget service providers like private aircraft and car rental companies, advertising outfits and television channel owners, the bulk of whatever is being spent has landed in the pockets of cottage industry workers contracted to produce propaganda material (badges, hand-printed shirts, caps, scarves, buntings of party flag colours, etc). A good fraction will also be pocketed by seasonal workers comprising of unemployed youth hired to man offices and work as runners.

According to candidates, as much as 50pc of the total spending is on Election Day when candidates are required to invest in mobilising and transporting the perceived support base to polling stations and facilitate their polling agents at all booths across their constituency. Voters expect provision of food and cold water bottles during the waiting time at the polling station.

It is hard to contest the fact that beyond political engineering, the regulatory and legal framework and the implementation of the code of conduct have improved. The enhanced quality of training and greater use of new communication tools will also help.

Several attempts by Dawn to solicit the position of major political parties on the gap between permissible and actual spending trends during general elections proved futile. The political leadership was either too busy close to the elections or it was avoided stating its position on the issue at this stage.

Published in Dawn, The Business and Finance Weekly, July 23rd, 2018