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April 13, 2016

Panama Papers: the toll on Pakistan    


April 13, 2016

The political storms created by the Panama Papers in Pakistan will unlikely settle down without forcing some change in the current political setup. The first definitive sign of that is the prime minister’s sudden change in his travel plans.

Instead of arriving in Turkey on      April 13         to attend the OIC summit, Prime Minister Nawaz Sharif will now go to London. He hopes he can manage to limit political and financial damage while in London as Hussain Nawaz attempts the same in Jeddah. The Sharif family has property and business interests to protect in both places. They are also likely to engineer out some ‘valid’ money sources that they can claim they used to set up their steel mills in Saudi Arabia.

The story given by Hussain Nawaz about his friends giving him millions to invest in a steel factory 2005 which he sold in 2010 and bought the Park Lane property in London is hard for the family to prove. Will they seek the help of the Saudis?

Another clear sign of the political pressure being felt by the Sharif family is that the family has reportedly discussed the possibility of the prime minister stepping down for about two three months until an independent commission conducts an inquiry. One possible replacement could be Interior Minister Chaudhry Nisar. In case the PM’s post needs to be filled until the 2018 elections then getting Shahbaz Sharif or Ishaq Dar elected as members of the National Assembly and then getting them elected PM was also considered by the family.

No final decisions have been taken but the Sharifs know that neither the prime minister’s speech about “old family business” nor his offer to set up a commission under a retired judge has helped stave off political pressure. The prime minister is under unprecedented pressure.

None of the government’s fight-back strategies have worked. And the prime minister has no answers to the four charges that he is being compelled to answer since the Panama Papers have been leaked – concealment of assets, concealment of facts, failure to pay taxes and movement of personal funds using illegal channels. These charges have been around for over a decade and a half. Journalists have repeatedly written detailed stories, but like the subsequently proven wealth concealment cases against the PPP leadership involving the Surrey Palace and the diamond necklace cases, nothing has translated into conclusive legal action against any top political leader.

However the status quo in which mega-corruption has become the norm in Pakistan, is now being questioned more vigorously than before.

Meanwhile, all political and public guns picked up in this latest round of yet again ‘discovering’ the old corruption scandals, are primarily pointing towards the prime minister. While there are more than 200 Pakistani names in the Panama Leaks, the primary focus is obviously on the one in power. Reportedly, by the end of the current week another 440 Pakistani names with offshore accounts will also be made public. Names of more retired and sitting judges and maybe some retired generals will make it to that list. Increased pressure on the chief justice of Pakistan to take suo motu action will follow this second revelation.

After the Panama Leaks questions around how legally and transparently the Sharif family has handled its property and tax affairs will have to be answered. The answers we are getting are far from satisfactory. For example the contradictory statements made by the family regarding Park Lane are all documented. The prime minister did not declare the property while submitting his nomination papers since 1996, when the property was bought. The PM’s wife said in an interview that the property was bought by them for the children while they were studying in London, and Hussain Nawaz has claimed the property was bought much later with the great profits he made from the sale of his steel mill.

Why do corrupt and immoral ways of stashing away wealth post-Panama Leaks seem more unsustainable than before? One, the global wave of outrage has generated a new energy.  The cover page of the International Consortium of Investigative Journalist’s (ICIJ) website says it all: “A giant leak of more than 11.5 million financial and legal records exposes a system that enables crime, corruption and wrongdoing, hidden by secretive offshore companies…”

Under the caption ‘Introduction to [the] Panama Papers’, it says “Behind the email chains, invoices and documents that make up the Panama Papers are often unseen victims of wrongdoing enabled by the shadowy offshore industry.” Under ‘Stairway To Tax Heaven’, it says: “Discover a parallel universe of shell companies and wealth managers, and learn how to hide your cash away.” And, finally, in the section ‘The Power Players’, the subtitle states the plain and powerful fact: “Explore the offshore connections of world leaders, politicians and their relatives and associates.”

In this digital age, mainstream and social media has picked up the story and the undiluted narrative of today’s robber baron has captured the imagination of a public already questioning why the rich get richer and the poor remain at the suffering end of the economic spectrum.

Two, the domino effect of prime ministers and ministers resigning in countries ranging from Iceland to Israel, in Kirghizstan, Ukraine and others.

Three, the global demand-for-accountability wave including in neighbouring countries is having an impact. If China is attempting to suppress the leaks to protect its political influentials, in India an independent inquiry has already been initiated. Even in the UK        with the promise to “sweep away tax secrecy”, the British prime minister declared his tax returns in parliament. With pressure on the British government to satisfy the people and the opposition on stashing away wealth, Labour leader Jeremy Corbyn said there was “one rule for the rich and one for the rest”, while insisting that the government is incapable of taking global action against tax dodging.

Four, within Pakistan Imran Khan is leading the demand for accountability. While he targets the prime minister, Imran Khan is demanding that an independent inquiry commission aided by an international company with expertise in forensic audit should look into the financial arrangements of all Pakistanis named in the Panama Papers.

Imran Khan’s broader narrative of tax evasion, illegal money transfer and lack of transparency in financial matters – which are draining Pakistan of desperately needed cash to provide basic amenities to the sixty million citizens living below the poverty line – is correct. This narrative may help Imran Khan mobilise enough public pressure on the government and the judiciary to set up an independent commission. Other political parties are likely to join the PTI’s effort to exert pressure for immediate accountability of the Sharifs and of others named in the Panama Papers. How far the PPP will go with the PTI will depend on what bargain Asif Ali Zardari may want to strike with the government and how far the PTI will be able to mobilise large-scale public support.

Meanwhile after the Panama Leaks it cannot be ‘business as usual’ in Pakistan.

The writer is a senior journalist.

Email: [email protected]

Twitter: @nasimzehra



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