Rampant corruption in Pakistan hinders sustained growth

LAHORE: Countries with high rate of corruption have maintained sustained growth since corruption is limited to few circles and public institutions are strong, whereas in Pakistan sustained growth has remained elusive because it has entered the entire society.

In Pakistan you have to pay petty bribes to the sweeper deputed by the municipality to clean the street you live in. You pay speed money to get electricity, gas and water connection.

You have to ‘please’ the principal or teacher of a government school to get your child admitted. No file in the land revenue department, at customs or any licensing department moves until you oblige the concerned person with the standard rate of bribe.  Contracts, even if awarded transparently are subject to the approval of the quality of work and for this approval you need to pay, even if the work is up to the standard. You can linger on the cases in the courts by getting new dates from the court clerk at a price.

Corruption is in vogue in Pakistan because of its complex legal structures, undue discretionary powers enjoyed by public servants, absence of international accounting and audit standards and weak public accountability. It is due to the complex legal procedures that prolong the litigations indefinitely, favouring mostly the actual culprits.

Empowering public officials with vast discretionary powers has enabled them to extort bribe out of businessmen and/or individuals. Government officials use their discretion in issuing licenses, tax certificates, customs clearance, etc, and can be decisive in creating market forces in favour of a particular person or company.

The distortions in the economy would continue to enlarge if level playing field is denied through discretionary powers. Cases relating to enforcement of contracts, non-payment of loans, fines imposed by regulatory authorities should be decided quickly through regular daily hearings. This is the best way to attract genuine local and foreign investors.

Most of the foreign investors have committed their resources in Pakistan on the firm sovereign guarantees of the government of Pakistan. Public accountability system in the country is very weak due to political instability and lack of will of the government.

The public accountability institutions like Auditor General, National Accountability Bureau (NAB), and Ombudsman have failed to address corruption issues due to political interference. Performance of superior judiciary has markedly improved but the lower courts where most of the litigations are struck are still far from efficient.

Fight against corruption is generally a long-term effort and consequently may span successive political administrations. The absence of transparent policies and systems for selection and appointment of public officials, clearly stated procurement procedures etc, the social evils like nepotism, favouritism, and even “sale of vacancies” are nurtured. In the absence of transparent systems, the concerned officials have a great propensity to exploit the situation to extort bribes.

Private sector has no option but to be partner in bribe. Those who import goods on actual value are crowded out by those who import the same goods at very low value. Those who declare actual production to pay the sales tax are booted out of the market by those who under-declare production and save the sales tax.