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September 16, 2020

The business-politics nexus

Business

September 16, 2020

LAHORE: There is an age old connection between business and politics, but in Pakistan, that connection is no longer covert. Business leaders are not content with merely pulling the strings from behind the scenes and have entered the corridors of powers.

Businessmen are attracted to politics because this provides them the tool to influence government policies. The case of the sugar industry is a fitting example since most sugar mills in Pakistan belong to political families.

Sugar import and export policies are determined by these families – hailing from different parties – sitting in large numbers in the parliament. That the government’s policies end up fattening their wallets comes as no surprise to anyone.

India has legalised corporate political donations, the same is not the case in Pakistan. Leading businessmen desire government to allow the corporate sector to donate to political parties after securing approval from their boards of directors.

This will bring in some transparency and reduce out of book secret funding. Still, legality is a moot when millions – if not billions – are at stake.

Most business donations in developing countries, for example, are made through informal channels, even where they are legal. According to businesses, keeping donations confidential is essential to avoiding reprisals by other political parties, which may penalise the donors for favouring their opponents. And for this, they say, they are even willing to forego tax benefits.

It is this unpredictability of the electoral process that has many corporate financiers avoiding the limelight even though corporate Pakistan finances the country’s elections, substantially if not wholly. Since they are unable to determine election outcomes, they largely choose to keep their donations under wraps. The best way to move forward is by strictly adhering to the rules and regulations and doing away with discretionary powers that breed corruption.

There are also examples of businessmen who have hedged their political bets. Throughout the nineties, for example, Mirza Iqbal Baig, who owned a cinema and a plaza on Mall Road in Lahore and was eventually sentenced on charges of narcotic smuggling, provided financial assistance to both Pakistan Peoples’ Party and Pakistan Muslim League-Nawaz (PML-N) contestants.

Real estate tycoon Seth Abid’s affiliation with former presidents Ziaul Haq and Musharaf are well established. And property tycoon Malik Riaz, despite having been very close to Musharraf, is now understood to be supporting all major political parties.

Interestingly, however, another set of businessmen has chosen the opposite route and has gotten into politics themselves. Lebanon’s former prime minister Rafic Harari was among the top businessmen of the country. Egyptian billionaire Naguib Sawiris led businessmen who entered politics after the revolt that toppled President Hosni Mubarak.

With his scores of businesses, former President Asif Ali Zardari is one of the richest men in Pakistan. PML-N chief Nawaz Sharif has assets that make his family one of the richest in the country.

Among other prominent businessmen who turned to politics are the Chaudhrys of Gujrat (including Deputy Prime Minister Chaudhry Pervaiz Elahi), who owned several industries, which were disposed of in the last years of Pervez Musharaf’s rule.

The former minister for water and power Chaudhry Ahmad Mukhtar belongs to the Services Group, which is involved in the leather business, shoe manufacturing, textiles and tyre manufacturing. Similarly, Humayun Akhtar Khan was a successful businessman before serving as a federal minister during the first tenure of Sharif then Shaukat Aziz and now PTI.

Another hugely successful entrepreneur – Jahangir Tareen – started his political career as an adviser to Punjab Chief Minister Shahbaz Sharif during his 1997-1999 tenure. Later, Tareen was elected to the National Assembly and became adviser to then Punjab CM Pervaiz Elahi.

Under Shaukat Aziz, Tareen finally became a federal minister. He was considered the main financier of Pakistan Tehreek-e-Insaf (PTI) and next to PM Imran until he was disgraced in the sugar scandal.

Musharraf also brought businessmen into the political fray. Descon Group Chairman Razzak Dawood who is currently serving as Adviser to the Prime Minister on Commerce and Altaf Saleem of the Crescent Group both were part of Musharraf’s cabinet.

Khyber Pakhtunkhwa has also its fair share of businessmen-turned-politicians, primarily the Saifullah brothers and the Bilour families (including former President FPCCI Ghulam Ahmad Bilour).

This is not to say the process has stopped now. General (retd) Ali Quli Khan of General Tyres joined, the Tehreek-e-Insaaf. Textile mill owner Mohsin Aziz also a former APTMA chairman was elected senator on PTI ticket.

Similarly, Federal Minister of Industries Hammad Azhar is a scion of a rich family of Lahore involved in the steel business. Former APTMA chairman Gohar Ejaz’s father was a PML-N senator, and now Ejaz is known to have a very good rapport with the PTI.