The political mess

The politics around the Panama Papers is getting heated up. Prime Minister Nawaz Sharif is on a tour of the country to touch base with his supporters and deliver one political statement after another to his opponents. The opposition for its part has kept the pressure on the PM and demanded that they be included in framing the terms of reference of the Panama leaks inquiry.  On Thursday, Sharif flat out refused, citing the opposition’s ‘lack of control over their tongues’. The PM’s message at every speech of his tour has been that Pakistan’s people want development, not negative sloganeering. But surely, he could have shown more restraint and avoided making the confrontation two-sided. There were very few signs of rebellion within the PML-N’s vast vote base in any case. It must be recalled that many of the allegations of offshore accounts existed at the time of the May 2013 elections. That did not stop the PML-N from a resounding, albeit contested, victory in the elections, followed up by even greater success in the local bodies elections. The PM seems to have been ill advised as his statements are only adding to the political circus around the Panama leaks.

As it stands, there are much more serious issues confronting the Panama leaks investigation. The chief justice of Pakistan has not decided whether to take on the inquiry himself. Along with this, Pakistan’s ability to conduct a probe of the scale required is being questioned too.      The State Bank of Pakistan has told the Senate that it is not in a position to investigate the Panama leaks and an inquiry will not be able to prove anything. One of the problems is said to be the Protection of Economic Reforms Act 1992, which places      no restriction on transfer of funds abroad. However,  transfer of money in itself is not money laundering.        For money laundering to take place, money has to be dirty – on which no tax has been paid. Thus we must distinguish between legitimate income – on which tax has been paid – transferred through banking sources and ill-gotten money which has been illegally transferred abroad.         It has also been said that Pakistan lacks an investigation agreement with Panama and other countries that provide offshore banking services. The absence of such an agreement might mean that the much-touted forensic audit may not be possible. Meanwhile, NAB has also sprung into action, but it does not seem the anti-corruption body will have a major role to play in the Panama leaks investigation.    What does not make sense is why the political temperature has remained so high despite the fact that the government has asked the chief justice to take up the Panama leaks investigation. The flames have been fuelled by both sides of the political fence. PM Nawaz Sharif’s political tour was not well-advised; neither were the high-pitched demands for the PM’s resignation. It seems that Imran Khan knows this is the only card he has. Given his party’s well-documented electoral failures, this may be the gimmick it can pull. The wait is now for the CJ to decide whether to take on the Panama leaks inquiry or not. If he accepts the task, the politicking around the issue should stop. Instead, the government should work towards putting in place the requisite agreements to investigate the issue while the opposition must help push the required legislative changes to help the inquiry. There is a way forward from this mess. It seems no one wants to pursue it.