Thursday, August 21, 2008

Sharif Emerges as Pakistan's Power Broker


Less than nine years ago, Mr. Nawaz Sharif, the two-time prime minister of Pakistan, was overthrown, jailed and then forced into exile by General Musharraf. Now, he is emerging as the ultimate come-back kid of Pakistani politics. Recent polls indicate he is the most popular politician in Pakistan. His party, the PML(N) has emerged as the second largest force in Pakistan's parliament in February elections held under President Musharraf. His brother rules Punjab, the largest province in Pakistan, and Sharif has forced Asif Zardari to join him in removing Musharraf, his personal nemesis, under the threat of impeachment.

Who is Nawaz Sharif? What is his past? What does he want? These questions are gaining great relevance with the rising popularity and increasing clout of Nawaz Sharif. A recent Wall Street Journal interview and story shed some light on Mr. Sharif.


Here are some excerpts from the Wall Street Journal report today:

Mr. Sharif hails from a family of industrialists. At his heavily guarded home on the outskirts of Lahore, his wealth and power are both on display. Peacocks stroll on neatly trimmed grass and statues of a doe and her fawn mark an entrance where security guards wearing black T-shirts and carrying automatic weapons await visitors. Just outside Mr. Sharif's cavernous dining room are two stuffed African lions that appear to be stalking prey. "From Botswana," Mr. Sharif said. "Male lions."

In an interview at his home Wednesday, Mr. Sharif said he is prepared to withdraw his Pakistan Muslim League (N) from the governing coalition, led by the Pakistan People's Party, if about 60 judges -- sacked during a six-week state of emergency declared in November -- aren't given their jobs back immediately. Mr. Sharif added, "Mr. Musharraf threw the judges out of office. He ridiculed the institution," he said. "If this institution is not restored, it will shake the foundations of this country."

In answer to a question on business, Mr. Sharif said, "The privatization program started from our government. We should open up further. I'd like to privatize everything. This is the key to success. The government shouldn't be in the business of running factories".

Answering another question, Mr. Sharif said, "The coalition of the PPP and our party came into being on the basis that democracy would be strengthened and judges restored. And of course, we would restore the constitution as it stood before Mr. Musharraf overthrew an elected government, my government. The reinstatement of the judges hasn't come through."

Is Mr. Sharif a really changed man? Has he learned from his past mistakes? Has he had a real epiphany? Let's see how one can square the new persona of Mr. Sharif with the following realities from his past two stints as prime minister:

In June 1994 when Nawaz Sharif was the prime minister, Pakistan faced its worst-ever constitutional crisis when a pro-Sharif mob stormed into the supreme court, forcing Chief Justice Sajjad Ali Shah to adjourn the contempt of court hearing against Sharif. Hundreds of Pakistan Muslim League supporters and members of its youth wing, the Muslim Students Front (MSF), broke the police barricade around the courthouse when defense attorney Mr. S.M. Zafar was arguing his case.

A journalist ran into the courtroom and warned the bench of an impending attack. Heeding the warning, the chief justice got up abruptly, thanked Zafar and adjourned the hearing. While judicial members left the courtroom soon after, the mob ran in shouting anti-Supreme Court slogans, and damaging furniture.

The angry mob, led by ruling party member from Punjab Sardar Naseem and Colonel (retired) Mushtaq Tahir Kheli, Sharif's political secretary, shouted slogans against the chief justice. The mob also beat up Pakistan Peoples Party senator Iqbal Haider. The police managed to restore normalcy after baton charging and teargassing the mob, both inside and outside the courthouse. The court which assembled at 9:45 a.m., could continue the proceedings for only about 45 minutes.


According to media reports in 1998, Nawaz Sharif, after taking over as prime minister for the second time, amended Pakistan's constitution twice to consolidate his power. He attempted to transform the constitution and system of government completely by attempting to get unlimited powers of Amir ul Momineen (the chief of the faithful) by means of the Sharia Bill, which he introduced.

In April 2001, Ayaz Amir, a popular newspaper columnist and now a PML(N) MNA, wrote as follows about the Sharif brothers: The Sharifs’ notions of government were intensely private: which is to say, have your own man at every key post. They began with commissioners and police DIGs, the dregs of both services pandering to their whims and enriching themselves in the process. Major Mushtaq of the Police Service who has finally been caught by NAB for becoming a real estate tycoon while in service was an outstanding example of this breed: doing as he was told and becoming an impressive man of property along the way. But when Nawaz Sharif became Prime Minister the second time round the family’s sights were set higher. They had whiz-kid younger brother running Punjab. They had their own man in the presidency. After Sajjad Ali Shah’s arranged departure from the Supreme Court, they thought they had the apex court lined up in their favor. In the person of Justice Qayyum at the Lahore High Court they had the closest thing they could get to a personal judge. Division of family assets, balancing of huge bank loans against dummy collateral, tightening the noose around Asif Zardari and Benazir: the only judge who could handle these sensitive matters was Justice Qayyum.

In 1999, when Nawaz Sharif was prime minister, Pakistani economy was in shambles. Pakistan’s total debt as percentage of GDP was the highest in South Asia – 99.3 percent of its GDP and 629 percent of its revenue receipts, compared to Sri Lanka (91.1% & 528.3% respectively in 1998) and India (47.2% & 384.9% respectively in 1998). Internal Debt of Pakistan in 1999 was 45.6 per cent of GDP and 289.1 per cent of its revenue receipts, as compared to Sri Lanka (45.7% & 264.8% respectively in 1998) and India (44.0% & 358.4% respectively in 1998). The Economist recently noted that the current macroeconomic disarray will be familiar to the coalition government led by the Pakistan People's Party of Asif Zardari, and to Nawaz Sharif, whose party provides it “outside support”. Before Mr Sharif was ousted in 1999, the two parties had presided over a decade of corruption and mismanagement. But since then, as the IMF remarked in a report in January, there has been a transformation. Pakistan attracted over $5 billion in foreign direct investment in the 2006-07 fiscal year, ten times the figure of 2000-01. The government's debt fell from 68% of GDP in 2003-04 to less than 55% in 2006-07, and its foreign-exchange reserves reached $16.4 billion as recently as in October."

Like his coalition partner Asif Zardari, Nawaz Sharif has also been the subject of corruption allegations. He is accused of abuse of power and amassing personal wealth at Pakistan's expense, and leaving the country bankrupt in 1999. There are lingering questions of where and how Mr. Sharif got the money to pay off the $450m judgment as rendered by a British court against him in 1998, in connection with Hudaibia Paper Mills Ltd.

Let me conclude with some questions and a sincere hope: Is the transformation of Nawaz Sharif genuine? Or, are we seeing just another two-faced politician vying for more power and popularity? Sometimes, people do change profoundly. I sincerely hope, for the sake of Pakistan's future, that the metamorphosis of Nawaz Sharif is positive and genuine. I also hope that Asif Zardari , the other major power broker in Pakistan, has gone through similar transformation to enable genuine democracy to take roots in Pakistan.

7 comments:

undecypherable said...

In Pakistani politics, now a day, everyone is trying to score points against each other. Zardari is walking on a tight rope and trying to keep the balance; delivering to foriegn stackholders will make him unpopular internally and Sharif wont miss a chance to score more points, whereas following Sharif he will international credibility among his foreign allyies.

Sharif seems not realizing the challenges currently faced by Pakistan and just keeping eyes on next elections; hence he misses no chance to score points.


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sweetberry_angel said...

I wonder you did not get to this power nexus. Why Sharif supported Justice Iftikhar and had spent millions on lawyers movement. Justice had stopped selling of Pakistan Steal Mills, from where Ittefaq foundries get raw iron, convert into steel and sell it. Musharraf has not just kicked them out of the country but also kicked now at their power, their rozi, roti. Sometimes investigate into story of Pakistan Steel Mills.

Riaz Haq said...

Here is a report in Dawn today about how the Sharif brothers, waiting the wing to grab power, engaged in "money laundering", according to Ishaq Dar, a close associate and PML leader:

NAB Court documents have recently emerged which show that Senator Dar made some interesting revelations in an accountability court in April 2000.

The court was hearing the famous Hudaibiya Paper Mills case against the Sharif brothers.

The 43-page confessional statement of Senator Ishaq Dar was recorded on April 25th 2000 before the District Magistrate Lahore. Dar was produced before the court by the then Assistant Director Basharrat M Shahzad, of the Federal Investigation Agency (FIA).

Dar, in his statement had admitted that he had been handling the money matters of the Sharif family and he also alleged that Mian Nawaz Sharif and Mian Shahbaz Sharif were involved in money laundering worth at least $14.886 million.

The statement by Senator Ishaq Dar is irrevocable as it was recorded under section 164 of the Criminal Procedure Code (CrPC).

Senator Ishaq Dar is a high-profile PML-N leader and has always been considered close to the Sharif brothers as his son, Ali Dar, is married to Nawaz Sharif’s daughter, Asma.

But in April 2000 the top PML-N leadership had hit a rough patch by then and some of their loyal lieutenants were busy developing a new political system for General (retired) Pervez Musharraf after his October 1999 military coup.

In this context, Ishaq Dar accused Nawaz and Shahbaz Sharif of money laundering in the Hudaibiya Paper Mills case.

Interestingly, Ishaq Dar also implicated himself by confessing in the court that he – along with his friends Kamal Qureshi and Naeem Mehmood – had opened fake foreign currency accounts in different international banks.

He said that the entire amount in these banks finally landed in the accounts of Hudaibiya Paper Mills Limited.

Senator Ishaq Dar was the main witness against Nawaz and Shahbaz Sharif in the case.

The Hudaibiya Paper Mills case is still pending in the National Accountability Bureau.

Since the statement made by Dar was recorded under section 164 of the Criminal Procedure Code, the statement has become a permanent part of the case against the top PML-N leaders.

If the case is opened again, the Sharif brothers may discover that the tightening noose around them was originally prepared by one of their own family members and trusted lieutenant Senator Ishaq Dar.—DawnNews

http://www.dawn.com/wps/wcm/connect/dawn-content-library/dawn/news/pakistan/13+sharifs+accused+of+money+laundering-za-08

Riaz Haq said...

Here's an interesting analysis of how Pakistan has changed in this decade by a Ahsan, a blogger on Five Rupees:

In the last decade, this picture has changed dramatically due to three central factors.

The first and most important factor is the explosion of private electronic media. In the 1990s, it was difficult for most Pakistanis -- the vast majority of which cannot or do not read newspapers -- to get information that was not government-sponsored or, less mildly, propagandistic. ....

This picture has changed drastically, as anyone with even a cursory interest in Pakistan will be able to tell you. There are now dozens of news channels in Pakistan, each with their own ideological and partisan bent. Some are national-level, others more regionally and ethnically focused. The trend began in the early part of this decade and has plateaued only recently, as the market gets sated. And while few of these channels will win awards for calm understatement or presciently sedate analysis, the fact remains that the media -- if it can be spoken of as a collective -- has given voice to a mass of the population previously unheard from. It has become a player of truly monumental importance for its ability to shape, mold, and excite the public. It is, at once, sensationalistic, blood-thirsty, xenophobic, conspiratorial, humorous, investigative, and anti-government. And yet its arrival on the scene is more than welcome, first for providing the venue for disenfranchised interests to make themselves known and second because the alternative is much worse.

The second significant factor, related to but distinct from the first, is the rise of communication technologies in Pakistan, particularly cellular phones. In 2002, there were 1.2 million cell-phone subscriptions in the country. By 2008, this number had risen to 88 million -- an increase of more than seven thousand percent. In addition, more than one in ten Pakistanis had access to the internet by the end of the decade; low by advanced countries' standards but an astronomical rise by Pakistan's. These developments in communications meant that political narratives became congealed and disseminated at speeds never heard of before, and that information and the wider "war" for public opinion became incredibly hard to win if a battle was lost at any stage.

The third major factor is the economic growth that took place in Pakistan in the first half of the 2000s. Pakistan's GDP doubled between 1999 and 2007, and more than kept pace with population growth, as GDP per capita increased by almost sixty percent between 2000 and 2008. More to the point, this growth was overwhelmingly powered by expansion of the service sector, which is concentrated, quite naturally, in the urban centers of the country. For the first time since independence, the term "Pakistani urban middle class" was not a contradiction in terms.

This development had two effects. First, and more trivially, the urban middle class did what urban middle classes do: they bought televisions and computers. In turn, that allowed them to plug into the private media explosion in ways simply unimaginable previously. Second, it shattered the elite-only edifice of Pakistani politics, and made challenges to government based on Main Street issues -- the price of flour, the lack of electricity, the selective application of the rule of law -- a viable process. Fifty years ago, Seymour Lipset wrote one of the canonical articles in Political Science on the process of democratization, its relationship to urbanized middle classes, and how the demands and values of the latter lead almost inexorably to support for the former. Here was living proof of Lipset's analysis.

Riaz Haq said...

Here's a NY Times story on ISI money used t5o help Nawaz Sharif's party against Benazir Bhutto's PPP in 1990s elections:

A three-judge Supreme Court bench, led by Chief Justice Iftikhar Muhammad Chaudhry, resumed hearings into accusations that the spy agency, the Inter-Services Intelligence Directorate, paid $6.5 million to a right-wing opposition alliance to influence the outcome of the 1990 election.

The case is potentially explosive in a country where the ISI has a history of meddling in politics yet its officials have largely escaped judicial censure. But analysts are divided about its chance of success.

Wednesday’s hearing was cut short after the court heard that statements recorded in 1998 by three crucial witnesses, including a former ISI chief, Asad Durrani, could not be found. A lawyer for Mr. Durrani said he was out of the country.

Justice Chaudhry ordered court officials to find the documents and summoned Mr. Durrani to a hearing next Thursday.

The scrutiny began in 1996 when Asghar Khan, a retired air force officer and politician, asked the court to investigate allegations that the ISI had donated $6.5 million through Mehran Bank to the opposition in advance of the 1990 election.

The ISI, it was said, wanted to oust Benazir Bhutto, the prime minister, in favor of the Islami Jamhoori-Ittehad, a coalition of conservative and religious parties headed by Nawaz Sharif, who went on to win the election.

Early hearings in the case brought striking revelations that embarrassed the military. Mr. Durrani, the former ISI chief, told the Supreme Court that the money had been distributed on the instructions of Gen. Mirza Aslam Beg, an army chief and Mr. Durrani’s boss at the time.

General Beg, in turn, said he had done so on the orders of President Ghulam Ishaq Khan, who opposed Ms. Bhutto.

The hearings stopped in 1999 after a military coup brought Gen. Pervez Musharraf to power but were revived in January at the instigation of Justice Chaudhry, who is eager to disprove critics who accuse him of going soft on the powerful army.

The resurrection of the case has potentially stark implications for certain politicians. Among the recipients of the ISI money was Mr. Sharif, the current opposition leader, who allegedly got $1.6 million. Should the charges stand, he and other prominent politicians, like Syeda Abida Hussain, a former ambassador to Washington, could be barred from office.

But just how far the court is willing, or able, to go against the powerful ISI remains to be seen.

On Wednesday, the court heard that a confidential statement recorded by Mr. Durrani in 1998 had disappeared, as had separate statements by Naseerullah Babar, a former interior minister, and Younis Habib, a businessman and banker who helped distribute the illegal money.

Moreover, two central figures in the affair — Mr. Babar and Ghulam Ishaq Khan, the former president — are dead.

Many in Pakistan are skeptical that the case against ISI will succeed. An editorial on Wednesday in the English-language newspaper Dawn expressed doubts that the case could “become a transformative moment in the history civil-military relations.”


http://www.nytimes.com/2012/03/01/world/asia/pakistan-court-resurrects-election-tampering-investigation.htm

Riaz Haq said...

Here's an excerpt from Dawn report on Punjab's economy:

The slowing regional growth has led to contraction in Punjab’s share in the national economy to 54.9 per cent in 2011 from 55.5 per cent in 2000 and 55.7 per cent in 2007.

Punjab’s economy, according to the IPP, is composed of 24 per cent agriculture (17 per cent for the rest of Pakistan and 20.9 per cent for Pakistan), 21.2 per cent industry (31 per cent for the rest of Pakistan and 25.8 per cent for Pakistan) and 54.8 per cent services (52 per cent for the rest of Pakistan and 53.3 per cent for Pakistan). The provincial economy’s sectoral composition signifies relative importance of agriculture in its economy and underdevelopment of industry as compared to the rest of Pakistan, says the IPP.

The report identifies three major factors that have dragged down economic growth in Punjab in recent years: decreasing water availability for agriculture, growing energy crunch for industry and declining public sector investment in economic infrastructure.

The IPP points out that performance of agriculture plays a major part in the economic growth of the province. During the last few years, it contends, the performance of agriculture sector has been disappointing, especially of major crops that have shown little growth since 2007 due to growing water shortages and rising fertiliser prices. Wheat production was virtually stagnant and output of sugarcane and cotton dropped by 10 per cent and 17 per cent respectively. The only crop with significant growth of 26 per cent was rice. In addition, there was hardly any growth in minor crops. Given the relatively large share of agriculture in the regional (Punjab) economy, the growth rate is likely to be lower because even in good years agriculture is unlikely to average a growth rate above four to five per cent,” it underlines.

The annual average agriculture growth rate in Punjab declined to just one per cent between 2007 and 2011 from 3.3 per cent between 2000 and 2007. In contrast, the average agriculture growth rate rose to three per cent for the rest of Pakistan from 2.5 per cent.

Growing energy shortages have affected industrial output in Punjab disproportionately, according to the report. There has been cumulative drop in gas consumption in the province of 13 per cent in the last few years compared to an increase of 16 per cent in the rest of Pakistan, especially in Sindh.

Similarly, increase in electricity consumption since 2007 has been restricted to only two per cent compared to six per cent in the rest of Pakistan. Punjab’s share in the national production of cotton yarn, for example, dropped from 33 per cent in 2007 to 29 per cent in 2011 and in cotton cloth from 43 per cent to 37 per cent.

Additionally, the report underlines the weaker presence in Punjab of industry producing consumer durable and construction inputs compared to Sindh as another factor for slower growth. “In the peak of business cycle, industries producing consumer durables like automobiles and industries providing construction inputs like cement show very high growth rates. During 2003 and 2007, for example, production of automobiles showed extraordinarily high growth rate of 31 per cent. The growth rate of cement industry was also high at 18 per cent.


http://dawn.com/2012/05/21/punjabs-lost-growth-momentum/

Riaz Haq said...

The confessional statement of Senator Ishaq Dar was recorded before a district magistrate in Lahore. He was brought to the court from a jail by Basharat Shahzad, who was then serving as assistant director in the Federal Investigation Agency (FIA).

According to legal experts, the senator's deposition was an 'irrevocable statement' as had been recorded under section 164 of the Criminal Procedure Code (CrPC).

Senator Ishaq Dar has always been regarded as one of the closest aides of the Sharif family, and is now also a relative as his son is married to Nawaz Sharif's younger daughter.

However, the NAB record clearly shows that back in 2000 he had agreed to give a written statement against the Sharifs about their alleged involvement in money laundering.

The top PML-N leaders had hit a rough patch by then as some of their lieutenants were busy developing a new political system for Gen Pervez Musharraf after his Oct 1999 military coup.

In the statement, Ishaq Dar accused Nawaz and Shahbaz Sharif of money laundering in the Hudaibiya Paper Mills case. At one point in the 43-page statement, Mr Dar said that on the instructions of Mian Nawaz Sharif and Shahbaz Sharif, “I opened two foreign currency accounts in the name of Sikandara Masood Qazi and Talat Masood Qazi with the foreign currency funds provided by the Sharif family in the Bank of America by signing as Sikandara Masood Qazi and Talat Masood Qazi”.

He said that all instructions to the bank in the name of these two persons were signed by him under the orders of “original depositors”, namely Mian Nawaz Sharif and Mian Shahbaz Sharif.

“The foreign currency accounts of Nuzhat Gohar and Kashif Masood Qazi were opened in Bank of America by Naeem Mehmood under my instructions (based on instructions of Sharifs) by signing the same as Nuzhat Gohar and Kashif Masood Qazi.”

The document shows Dar stated that besides these foreign currency accounts, a previously opened foreign currency account of Saeed Ahmed, a former director of First Hajvari Modaraba Co and close friend of Dar, and of Mussa Ghani, the nephew of Dar's wife, were also used to deposit huge foreign currency funds provided by “the Sharif family” to offer them as collateral to obtain different direct and indirect credit lines.

Senator Dar had disclosed that the Bank of America, Citibank, Atlas Investment Bank, Al Barka Bank and Al Towfeeq Investment Bank were used under the instructions of the Sharif family.

Interestingly enough, Ishaq Dar also implicated himself by confessing in court that he — along with his friends Kamal Qureshi and Naeem Mehmood — had opened fake foreign currency accounts in different international banks.

Mr Dar said an amount of $3.725 million in Emirates Bank, $ 8.539 million in Al Faysal Bank and $2.622 million were later transferred in the accounts of the accounts Hudaibya Paper Mills.

He said that the entire amount in these banks finally landed in the accounts of the paper mills.

The Hudaibiya Paper Mills case is still pending in the National Accountability Bureau.

If it is opened again, the Sharif brothers may be in for a rude shock a confidant is to blame for the albatross around their necks.

http://www.dawn.com/news/848873/sharifs-used-paper-mill-to-whiten-money-dar-told-court-in-2000