Change

Dr Farrukh Saleem

October 7, 2018

Corruption is “the abuse of public office for private gain (the World Bank’s definition)”. A couple of years ago, the World Bank estimated that public procurement in Pakistan amounted to 19.8 percent of GDP or $60 billion a year.

Lo and behold, estimates of ‘leakages’ in this $60 billion-a-year business vary from a low of 30 percent to a high of 60 percent. Lo and behold, the ‘leakages’ amount to a low of $18 billion a year to a high of $36 billion a year.

Mohammad Khalid Javed, the founding managing director of Pakistan’s Public Procurement Regulatory Authority (PPRA), said: “we do not need any borrowings from the World Bank or the IMF if we can save this money”.

Imagine: according to the International Narcotics Control Strategy Report, released by the US Department of State, the practice of money laundering cost Pakistan more than $10 billion a year. Yes, $10 billion a year multiplied by 10 years would mean $100 billion.

Now let’s do some simple math: our gross external financial need this year is $26 billion while the ‘leakages’ in public procurement are potentially more than that. So, we have a potential surplus. Our external debt is $95 billion while the past 10-year money-laundering cost stands at a potential $100 billion. So, we have a potential surplus. Conclusion: Minus ‘leakages’ and minus money laundering, we are a surplus country.

The real tabdeeli (change) is: For the first time in Pakistan’s rather chequered financial history, we have a prime minister whose top priority is anti-corruption. The real tabdeeli is: For the first time in Pakistan’s rather chequered legal history, we have a chief justice whose top priority is anti-corruption. The real tabdeeli is: For the first time in Pakistan’s 71-year long history, the head of our government and the head of our Supreme Court share the same agenda.

 

This is the real tabdeeli: For the first time in the Federal Investigation Agency’s rather chequered 43-year-long history, the agency is in the process of unearthing the biggest money laundering scam in the history of Pakistan. And the details of the scam are startling: the number of fake bank accounts so far unearthed amount to 77; the number of individuals named stand at 334 (including ex-president Asif Ali Zardari); and money that has been laundered potentially amounts to hundreds of billions.

This is the real tabdeeli: The modus operandi of money launderers is out in the open: political and bureaucratic actors facilitated by bankers open fake bank accounts. The two then dole out contracts worth hundreds of billions to their favourite contractors. In return, contractors deposit hundreds of billions into the fake bank accounts. A moneychanger walks in and black money is transferred to Dubai. Funds are then transferred out of Dubai to buy properties in London and elsewhere.

The big picture: The once-dreaded MQM no longer holds Karachi hostage. The PML-N failed to form a government in Punjab. The PPP leadership’s wrongdoings are out for everyone to see.

It is true that the FIA’s conviction rate is 6.6 percent. It is true that NAB lacks the capacity to prosecute white-collar criminals. It is true that powerful public-office holders are far from being convicted. It is also true that powerful money launderers have yet to be convicted. But the tabdeeli has begun.

The writer is a columnist based in Islamabad.