Two years ago Yaseen Anwar, then the state bank governor, admitted to the National Assembly that $25 million was being smuggled out of the country every day. His confession was a stark reminder of how the money laundering laws in the country have not been enforced. The removal of currency from the country has the obvious effect of weakening the rupee and leaves our banks without sufficient foreign currency reserves, perpetuating the vicious cycle of debt and keeping us reliant on foreign aid and IMF bailouts. Even these monetary losses, though, pale in comparison to the problem of money laundering to finance militant outfits. Interior Minister Chaudhry Nisar Ali Khan told a meeting of FIA officials that they need to curb the use of hawala and hundi so that the funding of militant groups is disrupted. The National Action Plan, devised as a consensus of the political parties after the Peshawar school attack, specifically mentions going after money launderers as a vital tool in preventing the functioning of militant groups. Since the plan was announced, 18 hundi cases have been detected but this is a mere tip of the iceberg. A lot more will have to be done and there is little confidence that the government will follow up with effective action.
The problem is that the political class itself is implicated in the problem. Politicians routinely transfer their ill-gotten wealth out of the country to buy assets in foreign lands to evade taxation. A few years ago a prominent money changer fled the country with all the black money he was keeping and investing but a case wasn’t registered against him because the influential people who dealt with him would then have had to admit their own assets were illegal and untaxed. As much as we would like to believe the government will now tackle money laundering for the sake of national security, time and again they have put their personal interests above those of the nation. Greed and avarice has continually triumphed over
the general welfare. Since the formulation of the National Action Plan only Rs71.5 million has been recovered when the hawala and hundi systems deal with tens of billions of rupees. So far the only action taken has been symbolic and done nothing to uproot this system. It is only when the moneyed class, which uses hawala and hundi systems, are arrested and held accountable for their crimes that any real change will come.