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November 9, 2018
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$200 bn in Swiss banks: Bad maths or a case of hopes built on fake news

Top Story

November 9, 2018

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ISLAMABAD: The PTI government’s entire mathematics about funding being arranged to get the country out of the present economic quagmire, does not count on retrieving Pakistanis’ $200 billion stashed in Swiss banks, checking annual illegal shifting of $10 billion out of Pakistan and curbing Rs12 billion daily corruption.

Finance Minister Asad Umar and other government leaders are now banking on Saudi and Chinese financial assistance, and the IMF programme to meet the financial challenges confronting the country. However, in the government’s financial planning, there is no mention of any amount that could either add to Pakistan’s foreign exchange reserves or the public kitty from the return or saving of plundered and laundered billions of dollars repeatedly quoted by the PTI in the past.

In the case of PTI’s commitment to retrieve Pakistanis' $200 billion stashed in Swiss banks within no time after coming into power, different government personalities including Asad Umar and PM’s Adviser on Accountability Barrister Shahzad Akbar have already said that not only the $200 billion figure is exaggerated but there is no clue about the exact amount of the Pakistani money deposited in the Swiss banks.

There is also no mention of how Pakistan could benefit in real terms by checking the much quoted PTI’s figure of $10 billion which is annually sent out of Pakistan through money laundering.

Imran Khan even after winning the July 25 general elections had stated in a press conference that $10 billion were annually being whisked away from Pakistan through money laundering. He said, “This is your money. This is Pakistan’s money. We have to bring it back. You will be (on) my team in this battle.”

However, now in the government’s economic planning to resolve the balance of payment issue, the savings of billions of dollars by checking annual money laundering of $10 billion is neither reflected nor mentioned.

In the recent past and before coming into power, Imran Khan had said that the daily corruption count in Pakistan is around Rs12 billion and it is done in the name of new development projects and receiving kickbacks/commission on them. Minister of State for Communication Murad Saeed, however, recently while stating that Pakistan loses $10 billion annually to money laundering, quoted the figure of Rs2 billion as daily corruption in the country. Murad had quoted these figures while referring to unnamed “authentic” reports.

After his return from China, Finance Minister Asad Umar announced that Pakistan's "balance of payments crisis is over" and assured that China is committed to providing short-term relief to Pakistan as well — the modalities of which, he said, would be discussed in a new round of discussions in Beijing on Friday.

"The long-term solution to the balance of payments crisis is to increase our exports, and to do that we should have enough income so that we do not need to borrow," Umar, who was a part of the Prime Minister Imran Khan-led delegation that visited China recently, said.

Federal government’s Spokesman on Economic Affairs Dr Farrukh Saleem when contacted told The News that economic policies are not devised on the basis of expected recoveries from the anti-corruption drives. “You cannot mix two things; anti-corruption and economic policy,” Dr Farrukh said.

He said that anti-corruption institutions are doing their job like never before. Dr Farrukh said that the FIA was working for the last 44 years but it never remained active against money laundering and bank frauds. “Now we are witnessing FIA being active against all such fraudulent activities but recovery of looted money will take time,” Dr Farrukh said and wondered, “How can economic policy be devised on the basis of some expected recoveries from an anti-corruption drive”?

He said that figures of money stashed abroad are based on rough calculations and are not exact. He said that stopping daily corruption and corrupt practices need a complete overhauling of the system, which will take time. Farrukh explained that he hasn’t noticed any genuine effort or even a sincere will of the governments during the last 10 years to curb corruption and corrupt practices.

Farrukh was also asked that bringing back the money from foreign banks and stopping daily corruption from the system may take time but money laundering channels could be closed more swiftly as $10 billion per annum means almost one billion dollars a month and the PTI government could have easily saved some $3 billion during its first three months in power. To this question, Dr Farrukh replied that there is an economic term called ‘state capture’ according to which the corrupt people get their men appointed in key institutions to continue with their corrupt practices even when they are not in power.

He said that in this case some men might have been appointed in the State Bank of Pakistan (SBP) to continue with the money laundering. He lamented that there have been no convictions in cases of money laundering in Pakistan. “I have heard of only one money laundering case investigated by the FIA in recent years,” Dr Farrukh said adding that it will take time to enhance capacity building of officers working with anti-graft institutions to enable them to stop practices like money laundering.

It is, however, interesting to note that the figure of 10 billion dollar money laundering per year as presented by the PTI leadership and also mentioned by Dr Farrukh Saleem in his report is also doubtful. The PTI has been quoting this figure of $10 billion while referring to some US State Department report but according to an investigation done by Geo News’ staffer Saqib Tanveer, the said report never quoted any such figure or any estimates regarding Pakistan.

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