A drama starring the corrupt

May 07,2016

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The political drama unfolding since the Panama leaks has much in common with similar events in human history. One such incident was when a mob sought Christ’s permission to stone an adulteress. Christ asked them, “Let him who is without sin cast the first stone.”

Corruption, lying and cheating is deeply embedded in our national ethos. Our moral compass has been totally distorted by all the leaders who followed the founding fathers. While the majority of the elite indulge in corrupt practices in one form or other, lying and cheating is the way of life for most of the have-nots.

For over 50 years, the majority of those in leadership positions in the political system – civil , judicial and military institutions and the professional and business community – have prostrated before civil and military dictators, seeking business and electoral favours, job extensions and promotions, subsidised plots, choice appointments post-retirement, etc. The present set of leaders are among the worst in our history, in terms of their integrity standards.

It is an insult to one’s intelligence to watch the low-integrity cronies of the prince of Sindh, King Khan and the clown from Pindi, the self-righteous media people and so many others talk about taking the Sharif family to task for corrupt practices. Not a single one of those hounding the Sharif family, whose integrity compass is severely distorted as well, are in a position to ‘cast the first stone’.

Clearly, the prime minister and his family should be the first ones to be investigated, but they should be part of a much larger pool that has misruled the country and enriched itself. The majority, if not all, of our leaders and their cronies would be serving jail sentences in places like the UK, northern Europe and the US for corrupt practices and cheating on taxes. They are lucky to be living in Pakistan.

Our politicians would be well advised not to restrict the investigation to just the Panama Papers and present themselves before an independent corrupt practices commission. An across-the-board investigation is the need of the hour and, as suggested in my previous article on this subject, such an investigation should include those in leadership positions in the military and judiciary. The investigation should not be a witch hunt using third degree methods, but a professional exercise meeting international best practice standards. Pakistan needs a ‘one-off’ cleansing mechanism, to address the sins of the past and establish good governance and high integrity standards for leaders.

In the 1970s, Nancy Sinatara sang the following famous song: “These boots are made for walking, and that’s just what they’ll do, one of these days these boots are gonna walk all over you; You’ve been messin’ where you shouldn’t have been a messin’; You keep lying, when you oughta be truthin’; Are you ready boots? Start walkin’!”

The image of our political system in the eyes of the people has hit rock bottom because of their inability to deliver on their promises and their abuse of office. We sense Nancy Sinatra’s song being played out in the air these days. Our political leaders need to get serious and shape up this time, rather than grandstanding. Otherwise, the Panama leaks may be the last straw that get the boots to “start walking”. And, as in the past, the majority of those in leadership positions, including those who pretend to be staunch defenders of the constitution, will prostrate before the next general on a white horse.

It also critical that the political system urgently reflects on and addresses two related issues. The first is tax avoidance, which is as ancient as taxation itself. After all, whenever a tax is created, someone finds a way around it. The long history of taxation reveals that the way in which societies confront tax evasion is integral to their survival.

Taxes have been around since ancient Mesopotamia. Over time, as tax systems grew more sophisticated, so too did the tools to avoid paying them. In Renaissance Florence, citizens – particularly the wealthy ones – often kept two books: a libro segreto, or secret ledger, for internal use and a libro mastro for government audits.

In France, the most populous country in 17th-century Europe, the wealthiest class avoided paying taxes altogether by virtue of their privilege. Peasants in France – as well as England – found ways to avoid other taxes, such as those on hearths and windows. Homeowners often bricked up their windows to avoid the latter tax

While the American Revolution was caused by “taxation without representation”, the French Revolution was caused, in part, by something much more familiar today: no taxation because of too much representation. The challenge has always been taxing the rich, especially when they are over-represented in the political system. While taxation itself always yields some form of tax avoidance, countries can face grave danger when too many members of society, or worse, the nation’s leaders, find ways to avoid massive amounts of taxes, often legally. The stakes of a fair and transparent taxation system are, as history shows, very high indeed.

Second, the political system, and society in general, needs to seriously reflect on why financial capital and our best and brightest educated people keep leaving Pakistan. This exodus of money and men has hurt Pakistan’s prosperity in many ways. Our history and events have generated a huge sense of insecurity. The expropriation of private wealth through land reforms and nationalisation, the hounding of politicians and businessmen by successive governments and their functionaries, growing intolerance and, above all, an ‘anti-success’ environment have all bred insecurity.

Pakistan may be the only country where every prayer in mosques or at funerals ends with a prayer for the safety of the country. There needs to be a concerted effort to remove this insecurity from our national DNA. We need to establish an enabling environment, in which the successful prefer investing in Pakistan over investing in Panama, Dubai and London.

We need to have a tax system that is taxpayer friendly and where taxes are low so that there is little incentive to evade taxes on legitimate income. We need to establish an enabling environment, in which talent, ideas and businesses flourish. We need to ensure that government functionaries facilitate business, and not hinder or hound it.

The political system must seize the opportunity to improve governance standards and put Pakistan on the road to prosperity. The choices before the political system are stark: self-correction or the boots.

The writer is a former operations adviser at the World Bank.

Email: fffhasangmail.com


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