Corporate entities in Pakistan and their associated bodies maintain a visible distance from the electoral process. Even after the government lifted the ban on their participation in providing financial support to political parties and candidates, their behaviour remained unaffected.
The business community, it seems, overlooked the legal shift regarding political donations by companies and trade bodies, as they typically abstain from direct involvement in Pakistan’s electoral process. The leader of an elite business platform succinctly stated his stance and rationale.
Ehsan Malik, CEO, the Pakistan Business Council, responded to the query thus: “I am not aware of any listed company whose code of business principles allows donations to political parties and doubt if the modification in law would encourage them to consider a change. However, as there was and is no bar on private individuals making such donations, shareholders of such companies remain free to do so.
“Unlike the UK or the US, where there are significant differences between political parties on policies, businesses tend to support those that align with their agendas. There are no clear differences in the programmes of political parties in Pakistan.
‘Vested interests always desire a friendly government, and they invest in every prospective government’
“If anything, there is a perverse consensus amongst parties to maintain the status quo on not broadening the tax base, continuing to burden businesses with high energy costs and allowing state-owned enterprises (SOEs) to bleed the fiscal account. So, not surprisingly, businesses are reluctant to take sides.”
Earlier, Ahmed Bilal Mehboob, President of Pildat (Pakistan Institute of Legislative Development and Transparency), highlighted the government’s changing stance on the legality of corporate funds entering political parties and election campaigns.
He informed: “corporate funding to political parties has been allowed through Section 204 (3) of Elections Act, 2017. It was earlier prohibited under Sec 6(3) of defunct Political Parties Order, 2002.”
A close examination of the pertinent clauses revealed that, previously, all private business entities, both domestic and foreign, were legally barred from influencing elections with their financial resources. However, the current law has omitted any reference to locally incorporated businesses when addressing political contributions, whether cash or in kind.
For clarity, the relevant sections of the old and new law are reproduced below: “Political Parties Order 2002, Section 6, Membership fee and contributions, Sub-section (3): Any contribution made, directly or indirectly, by any foreign government, multi-national or domestically incorporated public or private company, firm, trade or professional association shall be prohibited and the parties may accept contributions and donations only from individuals.”
Whereas the current law reads, “Election Act 2017, Membership fee, contributions and donations, Section 204, Subsection (3): Any contribution or donation made, directly or indirectly, by any foreign source including any foreign government, multi-national or public or private company, firm, trade or professional association or individual shall be prohibited.”
Commenting on the private sector behaviour, Mr Mehboob, who has keenly been observing the democratic process in Pakistan for over two decades, said, “prohibiting campaign financing by the corporate sector (not prohibited in Pakistan currently under Elections Act, 2017) of candidates and parties is meant to achieve two goals: one, exclude big money from campaign financing and two, to stop politicians from paying back to donor corporations through favours after coming to power by policy shifts etc.”
The Election Commission of Pakistan and the Chief Election Commissioner were reached for comments, but their response did not arrive till the filing of the report.
Mansoor Ali Khan, an eminent corporate lawyer, believes that the big business in Pakistan may not actually be as aloof from the electoral process as projected.
“There is absolutely no doubt in my mind that all big businessmen in Pakistan are close to politicians and support them financially. For obvious reasons, such ‘payments’ are not made through their “company accounts. When one wishes to ‘corporatise’ this bribe, it is termed as a ‘campaign contribution’, but in the end, it will remain what it is: a bribe — financial gratification in return for some favour that would be called when required.
“Perhaps the only difference is that this is an ongoing relationship. It is not per transaction. Politicians and political parties receive regular donations from big businessmen regardless of their status (in or out of power) and serve their patrons’ business interests in assemblies”.
Musadaq Zulqarnain, Chairman Interloop Ltd who sits on several boards, strongly disapproved of the powerful elite’s influence on Pakistan’s democratic process, which often thrives on the shadow economy.
“Financial transparency is the basic requirement for anything to be fair, including elections. In Pakistan, with a huge undocumented economy, the dream of financial transparency during the election campaign will remain a dream. The ruling elite has been in the grip of vested interests, a dominance that has steadily intensified as their financial might has continued to expand over time.
“I won’t name names, but yes, vested interests always desire a friendly government. They invest in every prospective government.”
Asad Ali Shah, an auditor by qualification and management consultant by profession, said, “there is no financial transparency in elections in Pakistan and enforcing any discipline in this regard is next to impossible in the current environment. The donations clause in the relevant Act was probably a copy-paste job and is not expected to create transparency. Donations and election spending are largely sourced from the black economy”.
He thought that the business elite are too well entrenched in the country’s power structure to care to cultivate relationships with any set of politicians.
Commenting on funding election campaigns, Mr Mehboob said, “In normal democracies, political parties and candidates go for crowdfunding. Rich individuals make large donations, but the funding base has to be broad. Corporate funding leads to extra complications as it will be difficult to monitor the relation between funding and policy favours. In addition, a ruling party enjoys a huge advantage over others in attracting corporate funding.”
Saleem Mandviwala, a businessman turned politician, was not sure if companies fund politics. “If companies provide financial support to parties or candidates, they tend to do so discreetly, without public disclosure.”
Several business leaders representing sectors including textiles, cement, auto, pharma, fertiliser, and sugar mentioned that businessmen, much like other segments of society, hold political views but prefer to avoid direct engagement.
They cited their preoccupation with industry-related challenges during association meetings. “While there were discussions about collective donations for causes during natural disasters like earthquakes, floods or the pandemic, political contributions were rarely, if ever, discussed in these forums,” a cement tycoon said privately.
There is rising global concern regarding the substantial inflow of private funds into electoral cycles, which is thought to compromise the integrity of elections. An expert remarked, “Those who contribute significant sums also tend to exert control over politicians, making them more accountable to sponsors than their constituents.”
Published in Dawn, The Business and Finance Weekly, October 2nd, 2023