Election & accountability

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Last month, media broke a story about a major money-laundering scam involving politicians and senior bankers.

A few days later, Hussain Lawai, former chairman of Pakistan Stock Exchange and a close aide to former President Asif Ali Zardari, was barred at the Karachi airport from flying abroad, and then taken into custody by the Federal Investigation Agency (FIA) in connection with the same case.

Lawai, a former head of the Summit Bank, and the co-accused Taha Raza were alleged to have facilitated the opening of 29 fake accounts in the Summit Bank, Sindh Bank, and United Bank Limited.

According to the First Information Report (FIR), the duo transferred billions of rupees into the accounts held by Zardari, his sister, and others through the fake accounts.

Chief Justice Saqib Nisar took notice of the media reports and fixed a day for the hearing.

Meanwhile, reports started circulating in the mainstream and social media that the top judge had ordered the interior ministry to place Zardari and his sister on the Exit Control List (ECL) for want of investigation. The heads of the three banks named in the scam were also reportedly banned from traveling abroad.

But on the day of hearing, the chief justice denied he had ordered placement of former president and his sister on ECL and put off the hearing until after the general elections on Wednesday.

The timing of the case, however, fueled a debate with some suggesting that it actually was meant to discipline Zardari ahead of general elections instead of a genuine effort to check money-laundering.

Shahid Hassan Siddiqui, a senior economist, said irrespective of whether money-laundering had taken place or not, the suspicious accounts were nonetheless opened.

“Those suspicious accounts were opened way back in 2014, 2015 and 2016. Why no action was taken at that time and why the cases were opened just few weeks before elections,” he questioned.

Siddiqui said he did not see any political will to take this case to its logical end.

“I don’t see these charges going anywhere. It is just arm-twisting,” he added.

Some observers say after disclosure of the scam, the matter should have been taken to its logical end as leaving it half-way through would only fuel conspiracy theories.

Without going into the merits or demerits of the case, one can say that it was grossly mishandled and caused unrest amongst the depositors of the three banks named in the scam, particularly the one whose former head was detained.

The State Bank of Pakistan had to issue a statement assuring the depositors that their money was safe.

Similarly, the Summit Bank too had to launch a campaign through newspapers advertisement to assure its clients that they needed not to worry about their money.

For a country like Pakistan, which has figures very low among countries attracting private and foreign investments, the authorities need to handle such matters very cautiously.

“Foreign investment, barring China, in Pakistan has fallen this year,” Siddiqui said.

While effective and stringent measures must be taken to curb corruption, which has become rampant in the society for the past three decades or so, but these efforts should not scare away investors from bringing their money into Pakistan.

Over the past two decades or so, too much court involvement in deals with foreign firms and countries has cast a shadow on Pakistan’s image as a safe destination for foreign and private investment.

A strong and independent regulator overseeing transparency and fairness in such deals could be set up but judiciary should avoid frequent scrutiny of such matters as it causes panic among investors.

Moreover, the frequent litigations inside Pakistan often result in filing of cases by the foreign partners (in such deals) for international arbitration, which mostly led to Pakistan paying millions of dollars in penalties.

The cancellation of the contract on mine exploration in the Reko Diq, Balochistan, is a major example of such mishandling and mismanagement on the part of Pakistani authorities.

The much-touted Rental Power Plants deal met the same fate when the Supreme Court led by the then chief justice Iftikhar Chadhury cancelled it for being non-transparent on the petition of the Pakistan Muslim League-Nawaz (PML-N) leader Khawaja Asif, forcing the affected parties to invoke international arbitration.

The country is facing the threat of paying damages and penalties of up to $1 billion to a Turkish firm failing which it could face more litigation in the international courts.

The sitting chief justice very rightly refused to open up liquefied natural gas (LNG) deal for scrutiny when former information minister Sheikh Rashid alleged massive corruption in the contract.

The chief justice, while rejecting the plea, cited the heavy penalty Pakistan had to pay on the rental power contract for failing to fulfill its international obligation. He said the matter should better be taken up at relevant forums instead of involving courts.

Pakistan’s economy is currently very vulnerable because of massive current account as well as fiscal deficits and it badly needs foreign investment to deal with these challenges.

Any unscrupulous action that could discourage private and foreign investment could cost heavily in economic terms. Therefore, all stakeholders need to handle these issues very responsibly.

Corruption, undoubtedly, is a major issue in the country but we need to put in place a proper system to check it instead of resorting to knee-jerk reaction which incurs more losses than benefits.

Such experiments were conducted in Pakistan in the past too but produced no tangible results.

Former president Pervez Musharraf set up National Accountability Bureau (NAB) to check corruption but after a few years himself asked its bosses to go slow as their actions were scaring foreign investors away. Moreover, the NAB was later used for the witch-hunt of opposition and to discipline the “errant” politicians.

Ironically, Musharraf cut deals with same politicians who he himself accused of being corrupt and then went back on his words that he would never let them return to the country as well as to power.

Pakistani authorities need to study the accountability measures taken by other countries like Malaysia, South Korea and China which effectively checked corruption without compromising on development.

It is time for Pakistan to set up a credible and powerful accountability watchdog to ensure an effective and across-the-board accountability of all influential sections of the society so that no one could complain of being singled out in a discriminatory accountability process.

The writer is a senior journalist based in Islamabad