Can Pakistan’s anti-corruption campaign translate into economic victory?
It’s been six months of the PTI government with Imran Khan at the helm of a party that captured public imaginations through the singular promise of political accountability. Khan declared a war on systemic corruption at the highest levels of government, and now half a year in, a preliminary media content analysis reveals that ordinary Pakistanis have three suggestions regarding the anti-corruption campaign they elected him for.
First, people want the government to make an example of those who have been looting pubic wealth for years. Second, they believe that the real benefits of the anti-corruption drive will only emerge when looted wealth is repatriated and brought back to Pakistan. And finally, perhaps most importantly, people are demanding systems that prevent rampant corruption from ever happening again.
The last point requires the government to put in place a long-term agenda on the reformation of public expenditure management, procurement systems and relevant government departments making use of financial forensics - a specialized field that combines financial auditing expertise with criminal investigations.
To demonstrate why this reform approach is essential, we have the example of the recent joint investigation report (JIT) submitted to the Supreme Court calling for a deeper understanding into just how the leader of a mainstream political party amassed assets through misappropriating loans, the public budget and kickbacks while in power. A sequence of events spanning two decades includes turning four state-run companies into ‘sick’ units, then acquiring said companies by selling them to close aides at throwaway prices with money from fake bank accounts. Additionally and among other things, the ’sick’ companies were receiving government subsidies and loans which then transferred to the purchasing party.
For the anti-corruption drive to translate into an economic victory, it is very important to keep public confidence high in the election promise that saw the current government rise to power.
Dr. Vaqar Ahmed
And the cherry on top: a further loan was acquired to sustain these companies with the full knowledge of the bank involved. For this purpose, the evaluator (also a close aide) increased the value of otherwise inferior collateral units. For example, a real estate property with a market value of PKR 190 million was pledged to the bank with an enhanced value of around PKR 2 billion.
It is systemic corruption of this scope that the JIT’s analysis begs to review not just in the public sector but also in banking and non-banking financial institutions.
For the anti-corruption drive to translate into an economic victory, it is very important to keep public confidence high in the election promise that saw the current government rise to power. Transactions through illegal channels including those of money-brokers or hawaldars must be put to an end. There needs to be effective operationalization of laws so fake bank accounts and assets can be tracked and the reform of public procurement systems is essential.
As the adage goes, justice must not only be done but also seen to be done. The government must move to put in place internal evaluation mechanisms whereby people can see and gauge what the anti-corruption drive has so far achieved, if confidence in the economy is to rise. This will eventually be the barometer of faith that brings foreign investment into the country, and if approached with a long-term view, it is exactly what the economy needs.