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May 4, 2018

Existential flaws


May 4, 2018

The anomaly of Mian Nawaz Sharif’s Avenfield Apartments, as it appears from the incremental falling in place of the puzzle, is why something as old as from1993-96 went unnoticed until now.

Three times Nawaz Sharif put up his papers for scrutiny and on each of those occasions the commission of a likely crime and the omission in declaring those assets missed attention. Are the laws that weak or their implementation so lax? Or submission to the powerful so pervasive? Probably all. But add pervasive superficiality to the process of implementation of requisite laws – and the mosaic is complete. A stitch in time would have saved nine, and some blushes, and escaped a humiliating end to a so-carefully carved political career; notwithstanding, the lasting damage to all aspects of our national life arising out of such turmoil of the last two years.

It’s the same with Khawaja Asif, Pakistan’s foreign minister and a former defence minister who was in the service of a lowly company in the UAE which rewarded him handsomely for services undeclared even as he ran the two most critical ministries in the government of Pakistan. Sharif and Asif were found guilty of availing parallel jobs in the UAE while being in government here. Sharif, in particular, made small of the judicial decision to hold him guilty of being in the service of his son’s company. Asif was ensconced between a mason and a crane operator in the list of skilled workers with an undeclared skill-set.

The ‘Iqama’, or the Legal Resident Permit, isn’t such an innocuous facility. The stated argument of mere ease of travel hardly holds water; hundreds visit the UAE on a daily basis from Pakistan and many avail their visas on arrival. The prime and foreign ministers of Pakistan would hardly have trouble finding entry. But what was earlier known in round-about terms with the disclosure of Capital FZE in the UAE – a company in the name of Sharif’s son in which Nawaz Sharif was employed with a salary – what was of bigger concern was how huge amounts of money moved through the accounts of that company to and from other accounts in London, Jeddah and Pakistan. It could never be established what exact business the company did to rotate such amounts.

With as much circulation, it was surmised that these were undeclared amounts being sourced from somewhere and finding easy entry as gifted funds. Such laundering usually is the preferred course to whiten black-money. Given that undeclared properties were already in the use of the Sharif family in 1995-96 when the children weren’t yet of age, the questions of ownership and the source of money used to buy those continue to haunt a weak Sharif explanation of inherited wealth. Sharif’s sons have conveniently kept away from an inquisition before the accountability court where the case is being heard.

The modus operandi became clearer with the case of Khawaja Asif, who in his tax records declared an income of sixteen lakh rupees per month from his unspecified UAE job but did not do so in his nomination papers. Similarly he attached the Iqama to his passport as a permanent record but did not declare it during the electoral scrutiny with the magistrate. He was found guilty of mis-declaration when disposing before the magistrate, and disqualified for life from holding public office for violation of a constitutional requirement. What remains unresolved though is how the monies were sourced and then transferred into his different accounts.

Asif declared a source, his job, which paid him handsomely. Considering that he was ensconced somewhere between a mason above and crane operator below in the company’s roll has left a lot to imagination and circumspection. In comparison, his job as a minister paid him peanuts. He never travelled to the UAE with any great frequency to attend to the job, yet to be paid for it with such regularity only meant that either someone was especially magnanimous or he was offering a service worth its price. Or, the money was his to begin with and was only being channelled through the account facilitated in the UAE through the Iqama. A UAE Iqama enables foreign accounts in countries as diverse as Switzerland and the US saving scrutiny from any purview by Pakistan even if the individuals holding those accounts are of Pakistani descent. This enables parking undeclared monies abroad and buying properties with undeclared, ill-gained and possibly laundered amounts out of Pakistan. Most commissions get paid in these foreign accounts for favours gained in-country.

Circumstantially then, most such monies are ill-gotten belonging to men in power who have had unrestrained access to capital, both public and private. Influence converts into material gain for such men of power. Big-ticket projects remain the most attractive vehicle for pilfering significant amounts of money via bloated estimates and cost escalation. Public-private ventures through companies established as a front for those in power is the latest fad. These may be universal in badly governed capitalist orders but makes it doubly debilitating in the absence of any mechanism to counter such graft. A few that exist have been badly mauled over the years and stand fully compromised. What you get is what you have in the allegations faced by both Nawaz and Asif, much to their chagrin.

Till 1972, Pakistani society was largely moralistic and corruption-free. An established opulence order existed with twenty-two families owning most wealth while others subsisted at a decent, low middle-class level valuing morals more than material gains. Bhutto upturned the balance by snatching away from those who had and giving it to those others who had-not. Under Zia, free money became available to fight a war in Afghanistan and those engaged in it revelled in its lustre. Soon we had numerous more in the rapidly-rich class. Musharraf’s fortunes in later years were similarly rewarded by another largesse from the US. But, where politicos like Nawaz and Zardari missed out on such facilitation, they borrowed heavily from banks and IFIs to create their own pool of additional capital, enabling equal opportunity to pilfer in the name of grandiose development.

To this end, the 1947 Foreign Exchange Act was first amended by Nawaz in his first tenure, further liberated by Musharraf in 2001. Together the conduit of corruption has seen public and private money being freely laundered into hidden havens. Pakistanis rank as the most common investors in property and offshore dealings. And none among the current or previous governments has taken on the need to plug this manifest leak.

The Financial Action Task Force has Pakistan on notice for exactly these violations of the existing international statutes which they have left unattended. Opulence is now an elitist occupation patronised by the state. The debt continues to pile – but is for the next generations to pay. They have already been ransomed even before they are born.

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