Saturday December 04, 2021

A web of deceit

October 16, 2021

The most effective way to keep the weaker segments of society is to keep them powerless. For this the stronger segments have devised various ways to ensure the weak stay where they won't cause any trouble for them.

For the working class, it is to keep them hand to mouth and maintain an army of unemployed so they compete with each other. For the middle class, it is a 'divide and rule" policy, using religion, caste, nationalism etc. For women, it is to keep them barefoot and pregnant. And thus the strong of the world, though much less in numbers, maintain their hold. The rest, though in majority, are never able to catch up to them. Thus when the treachery and fraud of the strong is revealed from time to time, the majority does not fully comprehend it and frankly is not much concerned about it either, and thus is unable to take any action against it. And after a short period of media sensationalism, political leaders’ promises to crack down on them and waste of much time and money, everyone goes back to business as usual.

Stories like the Panama Papers and Pandora Papers are some such revelations. They expose the underworld of the lust for power, money and control hidden behind respectable facades of not so respectable individuals. And it is a global phenomenon. The culprits are not just those who hide their ill-gotten wealth in offshore companies; they are also big banks, financial advisers, accountants and legal experts who help them set these up. And above all it is the rich countries that, on the surface, raise hue and cry about money laundering but actually act as conduits for this wealth and are the beneficiaries of this system where the poor are skimmed of their meagre resources to fatten the bank balances of the rich.

It is interesting that, while most people – even journalists, politicians and others – talk about how the rich hide their wealth and avoid paying taxes, hardly anyone raises a question about how this wealth was earned and accumulated in the first place. Isn't it surprising that in a country like Pakistan where people are told over and over again that the state does not have resources to increase minimum wage, it cannot pay for universal healthcare, or educate its children, where the state has not been able to provide decent housing to its citizens, where infrastructure other than a few motorways is in shambles, where public transport is non-existent and even clean drinking water is a luxury, a few individuals or families still end up making billions? This is the fundamental question.

In order to understand it, we have to understand the three pillars on which this huge edifice rests. First, the rule that whoever owns the means of production, controls the economy and thus the state institutions. In developed countries, it is the mega corporations. But in Pakistan all major means of production, lands, banks, large businesses, insurance companies, import export, factories, stock market and even media, educational institutions, healthcare business is owned and controlled directly or indirectly by a few individuals, who are linked together through a web of political, business and family relations. They have an unwritten understanding that an attack on one's interest will be dealt with as an attack on all. Thus, even if they have major political differences, this rule is upheld when it comes to their business interests.

Second, the fundamental principle that profit is basically unpaid labour. The less workers are paid, the higher the profit for the big businesses. That is why minimum wage is kept at a bare subsistence level. That is why multinational companies roam the world looking for the poorest of the poor that can be exploited. Isn't it interesting how they take poor countries’ raw material, cheap labour and then make profit by selling them the finished products at much higher price? And the profits are then siphoned off to some far-off heavens so they don't have to pay even taxes. This is done with full knowledge and permission of the local ruling elite. The people do not know what kind of deals are made with multinationals, on what terms and conditions, how the profit is divided, who authorises such deals and the beneficiaries are.

Third, such people, companies and corporations are rent seekers. This means they manipulate policy and economic conditions to maximize their profit, expand their business and receive subsidies and tax breaks. They do it due to their power and through their contacts. They may be each other's political or business opponents but when it comes to using the legislative institutions to their benefit, they join hands to maintain their hold on the people and the process of policymaking. That is how the land mafia, sugar mafia, cement mafia, flour and all other mafias work. They eliminate any competition in the market and set up cartels. This way they can manipulate the market.

A glaring example of this is the laws, policies and rules applied for real-estate deals. Land is not only a source of wealth but also a source of social and political power. Its secretive deals are used to whiten black money, avoid taxes and forcibly acquire land from the poor and uninformed at nominal prices and then developed to make billions. This is true of agricultural as well as urban land. Another example that no one has challenged is the way agriculture income tax is being implemented. Similarly, corporations are given millions of tax breaks, subsidies, amnesty schemes and other perks. Both of these cost the state billions in lost revenue, money that could be used to provide education and healthcare to all citizens.

If we do root cause analysis, we come to the conclusion that this system is based on a capitalist form of economy. The two countries which are the headquarters of this, the United Kingdom and the United States of America, are the biggest supporters, defenders and beneficiaries of this system. The banking system devised by the rich and powerful is an integral part of this. It does not just hurt the people in poor countries but also in the rich countries. So, if anyone thinks that the regulatory institutions and courts in Pakistan will be able to dismantle this, is naive at best and foolish at worst.

The only power which can counter this is a socially and politically aware citizenry that knows its rights and is able and willing to stand up for them. The current facade of capitalist democracy needs to be replaced by real democracy where people are the real stakeholders. This has to start with strong grassroots democratic institutions, local governments, which have been dismantled and destroyed by the local elite. Pakistan, rather the world, needs a mass movement supported by all segments of society to challenge this status quo. The powerless have to acquire power through a strong united organised struggle against a system that is built on the exploitation of the poor.

The writer is a freelance contributor. She tweets @shahnazsk