THE incoming finance minister, Asad Umar, has said he will set up a task force to examine the issue of the $200 billion Pakistanis are supposed to have stashed abroad and to look at ways and means of having the massive amount repatriated home.
“We have decided to constitute a formal task force comprising all the stakeholders after formation of the government with the mandate to recommend ways and means of returning billions of dollars owned by Pakistanis abroad. The task force will have specific terms of reference and will finalise its report in the light of ToRs,” he was quoted as having said in The News.
No matter which way you look at it, the stance taken by the man who will soon be running our finances makes me nervous to say the least. Let me tell you why. If he really believes that the $200bn stash does indeed exist, he will have to remain committed to recovering it.
That means the real and pressing economic issues that the government must confront and address within weeks of coming into office may not receive its undivided attention as some of its precious time would be used chasing red herrings.
Real and pressing economic issues may not receive the next government’s full attention.
However, if Asad Umar realises this was a yarn knitted by those wanting to hammer the last government over its lack of desire or ability to recover plundered national wealth of such proportions then, having lent it credibility via his task force statement, he might find it politically difficult to acknowledge it later for what it was.
If the $200bn actually existed anywhere apart from the fertile imagination of so-called journalists with expertise in financial affairs — in print and on TV — then not only would the external debt of the country be wiped out, the country would also have substantial forex reserves left over.
A layperson cannot be blamed for suddenly having high expectations when ‘experts’ raise the prospect of such bounty to a country that is forever struggling to maintain a minimum level of exchange reserves to pay for critical imports.
So, for sanity’s sake, may I request all stakeholders led by the next finance minister to spare a few minutes and read my Dawn fellow columnist Khurram Husain’s piece ‘Number in the news’ which appeared in this newspaper on Aug 7, 2014.
Khurram, one of our finest writers on the economy with the ability to break down and explain in plain English complex economic arguments and concepts, brilliantly traces the genesis of the figure. Basically, he rubbishes it.
I remember at the time the economy expert co-authors, who had picked up on the number and splashed it in their piece in a business newspaper, admitting to Khurram a few days later that they got it wrong and that his findings were accurate.
Don’t get me wrong. If there are $200bn out there that belong to Pakistan then it is a no-brainer to leave any stone unturned to have the pile shipped home where, by God, it is direly needed. Nothing would give me, or you, greater joy.
But it would be daft to chase an imaginary stash as that would be tantamount to throwing good money after bad as such investigative efforts are not cost-free and could cost several million dollars.
I know of firms operating internationally that could be mandated with such an investigation. However, these do not operate on a no-find no-fee basis and will rack up huge fees before, possibly reaching the conclusion that Khurram reached four years ago.
Anyway, it is gratefully not my call. I have never used the $200bn club to swing at a political opponent or to settle an argument.
Go after it deploying all means if there is any evidence, apart from a dodgy WhatsApp-group-type quote from an ostensible Swiss banker or a statement made on behalf of the former finance minister Ishaq Dar in parliament he categorically denied authorising.
It would be prudent, side by side with convening any $200bn task force, to also examine the implications of what US Secretary of State Mike Pompeo said first and now some US legislators have repeated regarding Washington’s position on any request for funds to the IMF.
Pompeo, followed by some members of Congress, has stated that the US view on any Pakistani request to the IMF for funds would take into account Islamabad’s debt-servicing commitments to China under the CPEC projects.
Whether Pakistan and/or China will agree to such transparency in CPEC loans documentation — an issue that the US, a third party, wants addressed — is not clear. It is also not clear why Pompeo and others are raising the China issues when they, in effect, want more concessions from Pakistan over Afghanistan.
It would also help if it were explicitly stated whether the IMF will do the US bidding or exercise the leeway that it may have despite America’s huge clout over the institution’s weighted voting system.
Many of these issues are complex and require deft handling by the managers of the country’s economy as well as its political leadership. Someone like me has at best a rudimentary understanding. Even then, it is clear to me that we can ill afford to focus on non-issues when standing so perilously close to the abyss.
The government can’t put off the tough decisions it has to take today. Committed as it avowedly is to social welfare, it will be hard-pressed to explain to its support base why it can’t deliver too much relief in the short term. But that is life. It would have to be done.
The writer is a former editor of Dawn.
Published in Dawn, August 11th, 2018