Another brick in the wall

Updated August 04, 2017

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OVER the past few weeks, I have come across two powerful new words. Coincidentally, both are related in a certain way. The first, ‘kakistocracy’ refers to “government by the worst people”. (Understandably, PML-N sympathisers want to insert an ‘h’ after the first ‘k’). The second word, ‘tenderpreneurs’ hasn’t made it to the dictionary as yet, but it should. It has been coined by Raila Odinga, the veteran Kenyan opposition leader, to refer to the alleged money being made by the Kenyan president and his coterie via commissions from a raft of public works tenders by the government in the run-up to elections. Many of these are deemed to be overpriced and shoddy in construction (a $12 million bridge constructed by the Chinese collapsed a fortnight after inauguration by the president earlier this year).

Misuse of public funds, embezzlement, using a public office for private gain, stashing ill-gotten wealth in offshore tax havens etc., have all been around since people first stepped forward to ‘serve’ others and exercise control of collective finances. The scale and scope is, unfortunately, much larger now, with allegations of mega corruption no longer the preserve of African dictators like Mobutu Sese Seko, Sani Abacha et al., or of presidents Marcos, Duvalier and Suharto.

Of recent, grand corruption scandals have broken out under democratically elected governments in Malaysia, Turkey, South Africa, Spain, France, Italy, Brazil, Russia, Argentina, South Korea among others. Of course, corruption is not the exclusive domain of civilians — far from it. Many of the corrupt African dictators were serving generals (Sani Abacha, Charles Taylor etc). In Pakistan’s case, the first major corruption scandal in Benazir Bhutto’s tenure involved the serving naval chief at the time (in the Agosta submarine case). Under Gen Musharraf’s time, several high-profile cases of irregularities came to light — in the importation of rail engines and carriages, the NICL land scam, Bank of Punjab, purchase of land for the Royal Palm Golf Club etc. — with none being properly prosecuted.

Much of the corruption and looting of a country’s wealth comes from the plunder of its natural resources. For countries that are not resource-rich, a major avenue is the public investment programme — the building of motorways, mass transit programmes and other large infrastructure projects. This is well documented in economic literature. A 1997 IMF Working Paper co-authored by Vito Tanzi (a global authority on public finances) concludes that: “[sic] corruption lowers growth. The evidence shows that corruption increases public investment while reducing its productivity. An implication is that economists should be more restrained in their praise of high public-sector investment, especially in countries with high corruption.”

It’s a sad reflection on us when we lionise corrupt leaders.

Considerable work has been done in the last decade on the costs of large-scale corruption. One of the more comprehensive ones is a 2006 study by the World Economic Forum, which found that even a “slight (one standard deviation) improvement in governance results in a threefold increase in income per capita in the long run.” That variation can spell the difference between poverty and prosperity for a nation.

So when a ‘Third World’ leader facing allegations of mega corruption gets ensnared by the country’s top court for failing to account for millions of dollars of unexplained — and largely undeclared — wealth amassed over a period coinciding with his tenure in public office, shouldn’t the citizens of that poor country be celebrating? While large numbers of Pakistanis are jubilant, a sliver of its elite — from amongst the country’s top human rights lawyers, TV anchors, commentators and columnists — are mourning the victory for accountability and rule of law.

Driven by a visceral bias against the military, or by virtue of being connected insiders to the patronage dished out by governments — and in a few cases, having a genuine untainted viewpoint — these members of the elite have based their non-stop bemoaning of the Supreme Court verdict purportedly on three counts: one, why was the Sharif family ‘targeted’ while other corrupt public figures have not faced the courts; two, this was an army-engineered ‘conspiracy’; and three, the actual verdict is based on a technicality.

Deconstructing these arguments finds them on flimsy foundations. Application of law is directed towards those who have been caught. With more than ample evidence coming to light of a web of complex global transfer of funds and transactions spread over two decades, including purchase of expensive offshore properties, and no explanation for the sources of income or a legitimate money trail, the court ruling was inescapable.

The military conspiracy argument ignores the elephant in the room — the presence of unexplained and undeclared assets whose ownership the ruling family accepted in court. While the military is likely to have watched this episode unfold gleefully, the Sharifs have been caught out by their massive unexplained aggrandisement of assets coinciding with their long stint in public office. As for the technicality, one wonders if we would bemoan Al Capone’s conviction because he was nabbed on tax evasion and not for his real crimes — murder, extortion, racketeering etc.

Pakistan has traversed a fair distance in terms of entrenchment of the rule of law since the lawyers movement of 2007. While there have been setbacks, the July 28 ruling by the Supreme Court is a huge step forward. We need to build on this by strengthening judicial processes and ensuring accountability and enforcement of rule of law in a transparent and non-discriminatory manner for all segments of society. This cause is not helped, however, by exhibiting intellectual dishonesty and not being able to call out a wrong that has been so evidently committed. The elite needs to develop loyalty to higher principles, not a self-serving one to individuals in power.

“The worst thing is that we live in a contaminated moral environment. We feel morally ill because we became used to saying something different from what we thought.” — Vaclav Havel.

The writer is a former economic adviser to government, and currently heads a macroeconomic consultancy based in Islamabad.

Published in Dawn, August 4th, 2017