"Chorus against corruption is political expression against representative democracy"

December 7, 2014

Asad Sayeed, senior economist, talks about the need for proper debate on corruption

The News on Sunday: A layman in Pakistan takes corruption to be the number one problem of our country without understanding that with the state of civil military imbalance, this is the message propagated by the establishment against the political class and is, therefore, discriminatory. After the politics of 1990s, the PTI is the latest to join this chorus. How should one look at the issue of corruption?

Asad Sayeed: The ‘layman’ actually does not see corruption as the most important issue. The recent PEW research survey also shows that Pakistanis rated electricity shortages and crime to be more important concerns than corruption. The hoopla on corruption is generally an urban middle class phenomenon and you are right that the underlying context is Pakistan’s fraught history of civil-military imbalances. Thus, the chorus against corruption can be characterised as the political expression of the class that is against representative democracy in Pakistan.

Having said this, corruption is a problem for any society. It corrodes the cement of society and creates an uncertain environment for economic and social agents. A proper debate on corruption will only occur when we start debating impunity enjoyed by the propertied classes and the non-elected arms of the state.

TNS: In your research paper, Contextualising Corruption in Pakistan, you have talked of how the military is far less accountable than the politicians. Can you elaborate on that?

AS: There are three different levels at which this lack of accountability manifests itself. First, the military budget is not presented to parliament at the level of detail in which budgets for other ministries or ‘organs of the state’ such as the Presidency, the PM House and Secretariat’s budget or that of the National Assembly or the Senate is presented. The military budget used to be a one-line item and that has increased to four lines now: detailing which force gets how much and a breakdown of its salary and non-salary components. As such, there is opaqueness about the military budget and it is not subject to the same level of scrutiny that the civil side of public expenditure is. Moreover, there is no debate in parliament on the military budget. Second, and related to the first, is the issue of a complete lack of civilian oversight on intelligence activities and certain levels of defence production. While it is true that because of the very nature of some activities, they cannot be revealed fully in the public realm, but in other countries, including India, there are select committees of parliament where the budgets are presented. Third, the perks enjoyed by military personnel in the form of residential, commercial, and agricultural land far surpass that of any other entity in the country. Remember, this land is a public resource and is being transferred for private gain at an enormous scale.

TNS: In the same paper, you have talked of institutionalised corruption. Please explain for our readers what do you mean by that and will the people of Pakistan ever get to know about it?

AS: One form of institutionalised corruption is land grants to military personnel discussed above. Also, soon after partition, through the evacuee property policy, there was a large-scale land grab that happened in the country. Then, we also have a culture of property transactions being officially recorded, on average, at one-third the value of the actual transaction. There is also a clever law that enables the black money thus generated to be laundered. Section 111 (a) of the Income Tax Ordinance allows for foreign remittances to be tax-free and no questions asked on the source of income. This enables the black money generated from property transactions to be siphoned abroad and laundered back in as white money.

It is obvious that beneficiaries of this institutionalisation are powerful individuals and entities. They enjoy impunity under the pretext of either national security or their importance to the economy in terms of their role as investors.

TNS: There is a view that corruption works as ‘grease’ for the development machinery and incentivises new avenues of development. As an economist, how do you look at this view?

AS: Capitalist development has historically been underpinned by what is termed as ‘primitive accumulation’. In that sense, it is a necessary condition for development as we know it. But for such accumulation to turn into loot means that rather than that accumulation creating a virtuous cycle of development, it turns into a permanent grab. For this, states have to draw lines. The danger in countries like Pakistan is that the state is too fragmented to draw those lines. ‘Grease money’ is only a small component of this larger process of accumulation.

TNS: You’ve addressed the issue of discriminatory corruption in your paper. How do you look at Tarun Tejpal’s assertion at the Jaipur Literary Festival last year that corruption is a great class equaliser in a society like India, something that was endorsed by Ashis Nandy too?

AS: I think what they meant in the Indian context is that there are new propertied classes that are emerging -- and a number of them belong to the lower or marginalised castes -- and the traditionally propertied classes -- that belonged to the upper castes -- don’t like this. This is the story of Indian democracy and its developmental evolution that it has enabled others to gain political and economic power and go through another round of accumulation, which is categorised as corruption. Our equivalent will be the beneficiaries of evacuee property and state largesse grabbed by the military and bureaucracy now feeling uncomfortable, in fact jealous, of others indulging in similar accumulation that their fathers or grandfathers did. So, in that sense, yes it is an equaliser but not necessarily in a class sense but more across ethnicities, mirgrant vs non-migrant and also caste.

TNS: Some perception surveys about what impedes investment in Pakistan do not put corruption at the top. What is your take?

AS: Perception surveys are always dicey. They tend to be less worried about corruption when the going is good and more concerned when either the economy is on a downturn or when they have a problem with the government in power. So, Transparency International all of a sudden tells us that Pakistan’s relative ranking on corruption is better this year than it has ever been, which makes no sense. I won’t take them seriously when trying to understand and doing something about corruption.

"Chorus against corruption is political expression against representative democracy"