The general elections are probably the biggest money spinner in Pakistan, tentative evidence indicates. To finance the mammoth election exercise, held every fifth year, the formal economy falls short and cash based parallel economy steps up. Some believe black money also surfaces with all its trappings in the process.
The paper currency-dominated transactions of political finance during the election cycle, along with the weak tracing and tracking mechanism of the regulator, make systematic calculations difficult, but intelligent estimates based on informal surveys point to an election market worth hundreds of billions of rupees in poor Pakistan.
In the absence of empirical evidence, it’s not possible to provide undisputable proof, but monies also flow into election business from shady realtors, corrupt civil works contractors, tax-evading traders, business tycoons and media Mughals in the high-stake power exercise.
There is a strong possibility of the involvement of business lobbies and underworld actors (mafias, smuggling networks, drug and arms dealers) financing candidates and political parties to gain access to power corridors and the hierarchal administrative machinery.
There is a strong possibility of the involvement of business lobbies and underworld actors financing candidates to gain access to power corridors
Keen watchers noted a significantly larger number of sellers entering the property market, driving prices of plots down in the period before elections. Some realtors contacted did not reject or confirm the perception.
There are laws in Pakistan that pose limits on spending by candidates though there is no cap on expenses incurred by political parties. “The political parties can spend as much as they want from funds raised legally”, an officer of the Election Commission of Pakistan (ECP) confirmed.
The law dictates limits on contestants’ spending clearly. For a national assembly seat, a candidate is required to keep the election spend within Rs4 million, and for a provincial assembly seat, the limit is Rs3m. All finances must flow from a dedicated bank account that is to be opened and declared in the nomination papers of a candidate.
Even a cursory look at election-related activities in the country confirms the perception of big budgets of candidates. The regular spending heads include public meetings, election offices/camps, sound systems, teams of paid workers, transport that in some cases involves renting private aircraft, well-equipped floats, promotional material (hoardings, banners, shirts, caps, mufflers, flags, etc.), projection on electronic, print and now social media, food and goodies for potential voters. Nothing of this comes free.
Before filing the nomination, candidates also commit resources to impress the political party of their choice and pay for a party ticket at the demand rate. The rate of a party ticket is directly related to the popularity of a party. Little wonder that the cumulative cost adds up to eye-popping figures.
The pertinent question begging answer, therefore, is: Where the money to fund expensive electioneering by candidates comes from?
Ahmed Bilal Mehboob, President of the Pakistan Institute of legislative development and Transparency (Pildat), thinks candidates mobilise their personal resources to realise their political ambitions.
Talking over the phone from Lahore, he said, “candidates might get some financial support from friends and relatives, but it hardly ever exceeds 10 to 15 per cent of the total election spend. The financial cost of electioneering, therefore, is borne primarily by contestants.”
Chief Election Commissioner Raja Sikandar Sultan’s promised to provide the required input on the subject. On his directions, the ECP hierarchy shared some info but did not agree to lend quotes.
Without commenting on the projected spending estimates or identifying possible sources of campaign funding, they informed that the commission is investing in improving its capacity to discipline the financial conduct of contestants during the election process.
“Candidates submit their accounts, complete with payment vouchers and bank statements of the dedicated election accounts. An effective monitoring mechanism, currently in works, will be in place for the 2023 elections. The trained team of ECP monitors will replace the current crop of officers tasked with the job,” a senior ECP source said. They did not say if the ECP intends to push the spending limits to make it realistic.
Responding to a question on the easy availability of cash during the election year Salahuddin Safdar, a senior member of Free and fair election network (Fafen), believes: “Aspiring legislators start hoarding cash in advance for elections. Many liquidate assets in real estate for this purpose also because there is a greater scope of cash settlement in the sector.
“Candidates also try to win over wealthy influentials in their family, clan, profession and locality to draw on their influence by getting concessions from goods and service providers and cooperation from administrative machinery including the police.”
An analyst said the dimensions are different for former ministers, party leaders and advisors in the race. “For contractors of public works and suppliers of goods and services to the government, elections are the payback time to their political benefactors. They return past favours by picking bills of rallies, transport, food, etc.”
Dr Umair Javed, a sociologist teaching at the Lahore University of Management Sciences, endorsed the perception of higher than legally allowed spending by candidates.
Sharing his insight from his experience working in a commercial area in Lahore, he said candidates, except for a few exceptions, generate resources for electioneering by tapping into networks of resourceful realtors and traders to cover the expenses of heads such as public meetings, etc.
Aware of Election laws, such supporters fund activity without any trace of a money trail leading up to the candidate. It’s a quid pro quo deal. In return, they expect help in expanding their access to the administrative machinery. “There are multiple layers of intermediaries involved that make it very difficult to establish a direct link between givers and takers,” he said.
Another source with a keen interest in the subject observed that powerful lobbies (brokers, realtors, auto, cement, textile, fertiliser, pharma) rarely support individuals. They pick a political party with better chances to hold a commanding position in the next government.
Majyd Aziz, an industrialist, was candid. He identified big business, proxies of foreign governments as big donors for electioneering. He hammered the value of choosing the right party that deserves the support of the businesses; however, in his words: “The enlightened lot prefers to support multiple parties as they are aware of the risk of keeping all eggs in the same basket.”
Published in Dawn, The Business and Finance Weekly, May 22nd, 2023