Panama Leaks

What’s new in the Panamaleak?

Didn’t we already know since the 90s that the Prime Minister had properties in London? Didn’t we know that the Prime Minister’s sons were doing property business in London for a long time now? Didn’t we know that the Prime Minister and his sons had set up a steel mill in Saudi Arabia during his forced exile? Didn’t we know that in spite of all the efforts by the Musharraf government it could not be proved that Nawaz Sharif and his family had indulged in money laundering only because they were legal leaks in the system? Didn’t we know that the JatiUmra palace was made by the family without showing the source of income? Didn’t we know that the lifestyle of the family does not match the revenue income shown and the taxes paid by them?

Of course we knew it. Agreed that a common man doesn’t know how the business is done or lavish properties are bought in the developed countries. And of course the common Pakistani didn’t know how to avoid taxes in the developed countries by parking investments in offshore companies by the rich and beautiful. Now they know it, thanks to all the discussion on the media — something which the establishment and the business elite knew for many years.

The Sharif family which has amassed wealth and properties abroad is not alone. Many other political leaders, civilian, military, bureaucrats, and business leaders have been putting aside some of their investments in other countries without declaring it in Pakistan. Going back when Asif Zardari was given power in 2007 didn’t we know about his past which was tarnished with corruption charges? Didn’t we know that he had foreign properties and also businesses which sustain his and his children’s luxurious lifestyle abroad?

More recently Hassan Nawaz unsuccessfully tried to explain in two friendly interviews about where he got the money from, for his London businesses. This was a little before Panamaleak happened. His interviews had many holes but the leading anchors failed to raise ticklish questions. Now the question is why did the Sharif family feel the need to explain the source of their investments abroad at this stage?

It seems they had a tip about what was coming in the Panamaleak and wanted to pre-empt the reaction against the family.

Now let’s come to some basic questions. One, why do our rulers not put all their legitimate and illegitimate savings in the Pakistan basket and invest abroad? Two, why do our people elect such leaders who they know are corrupt and have investments abroad? Three, why there’s not much noise about the corruption and fickle investments when they take over the power? Four, if all this is not new then what is the hullabaloo about at this juncture?

Investing abroad is not a crime, provided it is done by following the legal process. It has to be proved that the money invested abroad has been earned legally and transferred through the normal banking channels after paying taxes. It has to be also seen that the profits made from these investments are brought back into the country thus adding to the country’s foreign exchange income. If no dividends are brought back then it is flight of capital which occurs when the people are not confident about the markets in which they live in.

But the case of top leadership of any country is different. If they indulge in flight of capital then it shows they have little confidence in their own country they rule. In politically unstable countries, like Pakistan, the money has the tendency to flow out. The money of the politicians is no different. In polities that have a culture of witch-hunting, the top politicians have to live in exile when forced out of power. In many cases they also keep some of the family members abroad. For all this the money parked outside the country ___. Thus middle-class morality is their last concern.

To understand why do people elect the leaders knowing fully well about their legitimate and illegitimate sources of income? We have to accept that we live in quasi-tribal and feudal society, its value systems even prevail in the urban society, barring a small middle-class. At the grassroots level people’s concerns are police highhandedness, and gutter and garbage mismanagement. They are more concerned about the corruption at the lower level that touches their day-to-day life. Living below the poverty line or struggling to keep their heads up most people want the immediate needs fulfilled. And they don’t care how their rulers are making money as long as they can manage to get some work done from politicians from time to time. They don’t know the economic equation that higher corruption leads to poor HDI’s. Empirically speaking, I have seen many people asking their elected representatives for some illegitimate favours.

Most businessmen who crib about corruption of politicians are the ones who bribe them. Without the support of the middle class bureaucracy and business tycoons the politicians cannot make money under the counter. The same people and tainted money fund the election campaigns in most of the countries. That also explains the third question that why the corruption issue was not raised when Zardari and Sharif took over the power in 2007 and 2013 respectively.

This brings us to the last crucial question that why so much noise at this stage. Thanks to Panamaleak, which is an international disclosure, the corruption of the rich around the world has come in to focus. To his bad luck the Sharif family and a couple of offshore companies were listed in Panama and not in some other tax havens. More importantly these leaks have come at a time when the civil military relations are apparently strained. This has given an opportunity to the opposition, media and of course the establishment to put the Prime Minister in the corner.

The Prime Minister and his team have handled this crisis clumsily. It seems there is no crisis management strategy and his managers are handling it through haphazard collection of statements and speeches. The Prime Minister is jittery because the establishment is unhappy with him. He wants to buy time till at least November when he has to make a crucial decision about the most important post in Pakistan. His past track record in making such appointments has not been pleasing for the establishment. By asking for a new law the opposition’s TORs has obliged him indirectly.

Interestingly, there is one common factor in the timing of corruption stories hype aboutabout Zardari and Sharif — both tried to take control over the foreign policy regarding India and Afghanistan. In the latter’s case the Panamaleak is a god sent opportunity to stop him.

The writer can be reached at ayazbabar@gmail.com

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