Friday, August 22, 2008

Zardari Corruption Probe Alive in Switzerland


While the news of President Musharraf's resignation and Asif Zardari's nomination for president occupy the big headlines, the renewed reports of the continuing Swiss probe into corruption allegations against Zardari are also vying for attention in the same week.

Swiss Judge Daniel Devaud has "confirmed to NEWSWEEK that the prosecutor's office was still investigating "aggravated" money-laundering offenses. Likewise, Jacques Python, a Geneva lawyer hired by Pakistan to work with Swiss authorities on the corruption case, said he had every reason to believe that the Geneva prosecutor's investigation was still open. And Alec Reymond, a lawyer who had represented Bhutto in connection with the Swiss investigation, also says the case is still open."

In 1997, after Zardari had been imprisoned on suspicion of corruption, Judge Devaud found that Bhutto herself had purchased a necklace worth 117,000 British pounds from a London jeweler—using cash and a bank transfer from the account of Bomer Finance, a British Virgin Islands company, which the magistrate said was jointly controlled by Bhutto and Zardari. (Her supporters claimed this allegation was based on trumped-up evidence supplied by her political enemies. Bhutto herself reportedly claimed her husband had bought the necklace but never told her about it). In 2003, Bhutto was convicted of money laundering in Switzerland and filed an appeal of her conviction by Swiss Court.

According to Newsweek's Mark Hosenball and Michael Isikoff, Judge Devaud's investigations in 2003 resulted in a series of court orders against Bhutto, Zardari and one of their Swiss lawyers, Jens Schlegelmilch. The orders, akin to misdemeanor guilty findings by a U.S. justice of the peace, were issued by the Swiss judge, an investigating magistrate in Geneva who has handled many high-profile investigations into the alleged laundering of corrupt payments through Switzerland by foreign politicians. The full text of Devaud's orders can be read at a NAB site here.

As to the outcome of the Swiss prosecution, some legal experts believe that Swiss prosecutors have three possible courses of action: close the case entirely, prosecute it by bringing it into a superior court or arrange the Swiss version of a plea bargain, in which money seized by Swiss authorities during the investigation probably would be confiscated or handed over to charity, but charges would be settled without any prison sentences.

In June 2008, a senior PPP leader and president of Pakistan's Supreme Court Bar Association, Mr. Aitzaz Ahsan, who was interior minister in Benazir Bhutto's first government, told James Traub of the New York Times that most of the corruption and criminal cases against PPP Co-Chairman Asif Ali Zardari which were dropped recently in Pakistan were justified, and that the PPP was a feudal political party led by a figure (Zardari) accused of corruption and violence. After a moment's reflection, Ahsan further added, “The type of expenses that she had and he has are not from sources of income that can be lawfully explained and accounted for.”

The charges of corruption will likely haunt Zardari for the rest of his life. The way for him to leave a better legacy is by renouncing the amnesty he received from President Musharraf and by offering to go through a fair trial to clear his name.

Related Links:

Bhutto Convicted of Money Laundering by Swiss Court

House of Graft by New York Times

Can the West Help End Corruption in Developing Nations? on Haq's Musings

Bhutto's New York Apartment , A Luxurious East Side Penthouse

Bhutto-Zardari Front Company in Virgin Island

Asif Zardari wikipedia entry

Financial Times on Zardari's mental health

Is Zardari Guilty? on PakAlumni Worldwide

46 comments:

Munzir Naqvi said...

What my hope is for a Zardari Presidency is the fact that he will use his connections, assets and network to build up Pakistan.

Zardari's Assets alone for the development of the nation can speed up the process by creating energy plants, etc. Pakistanis are very merciful people in general. It is the Military which is unforgiving and some political stake holders.

Your points are well observed and taken! I wish that justice could be done, but Switzerland is a developed nation with a strong legal system, yet it can't fight International corruption. We all wish for a better Pakistan.

Anonymous said...

Munzir Naqvi writes:

"Pakistanis are very merciful people in general."

I do not know which Pakistanis you are referring to but you have no clue of the reality. Please educate yourself a little more before making silly statements.

What I do read in your comments is acceptance to corrupt leaders and lack of knowledge period of the reality in Pakistan.

Anonymous said...

Please explain this story by Reuters is the case closed or shelved as the Zardari's lawyer Saverio Lembo welcomed Zappelli's decision to shelve the ...



https://www.blogger.com/comment.g?blogID=5848640164815342479&postID=2760975102938635836

Riaz Haq said...

Here's an interesting commentary on Zardari that I just received via email:

The sheaf of documents - from specialists ranging from a Dubai cardiologist to a New York psychiatrist - remains, however, and paints a picture of a man with multiple and severe physical and mental health problems.

In March last year, Stephen Reich, a New York state-based psychologist, diagnosed HIM with dementia, major depressive disorder and post-traumatic stress disorder, problems stemming in part from being tortured while imprisoned in Pakistan. He could remember neither the birthdays of his wife and children, nor more than a handful of facts from two short stories he was read.

Another March 2007 diagnosis - by Philip Saltiel, a New York City-based psychiatrist - said emotional and neurological problems suffered by HIM because of medical treatment and imprisonment had resulted in "emotional instability" and "deficits in memory and concentration". Saltiel wrote: "I do not foresee any improvement in these issues for at least a year."

Reich re-examined HIM in June and September last year, each time reporting that he had made progress but still had problems that might make it impossible for him to testify in court.

Asif Ali Zardari (HIM)said that agreements with PML-N "are not holy like the holy Quran and the Hadith" and can be modified if circumstances change.

Anonymous said...

Riaz,

The bottom line is that Zardari is not a man of his word. It has nothing to do with the Quran or Hadith, this is a character issue and that Zardari lacks.

Taking things into perspective, we do not know the reality of the influence of the American channels (ref to emails from the US Ambassador to the UN and Zardari) that are negotiating for Zardari to take power.

Riaz Haq said...

Latest reports indicate the Swiss government has dropped all corruption charges against Zardari after Pak government refused to press charges pursuant to the NRO (amnesty granted by Musharraf). According to media reports from Pakistan, the PML-N Quaid Nawaz Sharif congratulated Zardari on the closure of the Swiss case. Ironically, the corruption charges against Zardari were initiated by Nawaz Sharif government in 1997. Both the leaders spoke to each other twice on telephone in last two days and discussed possibilities for the revival of their friendly relations.
The more things change, the more they remain the same, at least as far as accountability in Pakistan is concerned.

Anonymous said...

Zardari must be hanged in the street against these corruption

Riaz Haq said...

It was widely reported over a year ago that the corruption case was closed and $60 million handed back to Asif Zardari after the Pakistani Government withdrew its requests for judicial assistance from Switzerland and said it had no claim on his assets.

After an agreement in February this year by the Swiss banking giant UBS to pay $780 million and admit to criminal wrongdoing in selling offshore banking services that had enabled tax evasion, 14,700 Americans with foreign bank accounts have now come forward and admitted wrongdoing and agreed to pay taxes.

See the contrast? While US aided and abetted Zardari's corruption and tax evasion by sponsoring amnesty of Zardari by Musharraf, American attitude is very different when it comes to enforcing the law in US.

Riaz Haq said...

Here's more on the corrupt politicians and their families abusing power in Pakistan as reported by Daily Dawn today:

ISLAMABAD: Although the wife of Prime Minister Yousuf Raza Gilani had settled her default case with the National Accountability Bureau (NAB), she had been given ‘undue favour’ and asked to pay only Rs45.5 million against total liabilities of Rs570 million, sources in the NAB alleged on Saturday in an interview with Dawn.

A scrutiny of Fauzia Gilani’s case revealed that she had obtained two loans totalling Rs200 million from Zarai Taraqiati Bank Limited (ZTBL), but she settled the case after committing ‘wilful default that prevailed over a decade’.

According to documents, the sources said, the principal of Rs200 million had swelled to Rs570 million as non-payment of instalments spanned a decade. However, she managed to settle the case by paying back Rs45.521 million.

The sources said she had obtained a loan of Rs120 million for Multan Edible Oil Extraction and another loan Rs77 million for Pak Green Fertilisers.

According to the NAB press release, the cases were settled by the ZTBL in pursuance of the Sindh High Court’s order of Oct 2, 2006, and March 17 of last year and a circular of the State Bank.

In consequence, ZTBL forwarded a request to NAB for withdrawal of the cases.

http://www.dawn.com/wps/wcm/connect/dawn-content-library/dawn/news/pakistan/12-pms+wife+paid+rs455m+against+rs570m+liabilities--bi-07

Riaz Haq said...

According to a report in a leading French newspaper, investigations have revealed that Zardari received 4.3 million dollars in kickbacks from the sale of three Agosta 90 submarines for 825 million euros (approx. 1.237 billion dollars at current exchange rate).

The newspaper said that Pakistani National Accountability Bureau (NAB) was alerted about the massive scam way back in 2001.

The British authorities told the NAB that Zardari had received several large payments into his Swiss bank accounts from a Lebanese businessman, Abdulrahman el-Assir, during 1994 and 1995.

According to a former official of French naval defence company DCN, French authorities had selected Assir to act as intermediary in the deal, The Nation reports.

He allegedly deposited a total of 1.3 million dollars in Zardari’s bank accounts between August 15 and 30, 1994, a month before the submarine deal was finalised. An additional 1.2 million dollars and 1.8 million dollars were deposited in Zardari’s account a year later.

The newspaper report also revealed that investigators believe that the non-payment of the full amount of the agreed kickbacks may have led to the deaths of 11 French national in a suicide attack in Karachi in 2002. (ANI)

Read more: http://www.thaindian.com/newsportal/south-asia/zardari-received-millions-as-kickback-in-french-submarine-deal-report_100273313.html#ixzz0YMXa92Uc

Riaz Haq said...

Jang Group has just published a sensational story where Pakistani Ambassador to UK and NRO beneficiary Wajid Shams-ul-Hassan has paid a secret visit to Switzerland and has got possession of the original documents/evidence that were used President Asif Ali Zardari in money laundering case.

The News Reports:
Pakistani High Commissioner in Britain Wajid Shamsul Hasan headed a secret operation in Geneva and received at least 12 cartons comprising the original documents and evidences against some Pakistani high-ups in Swiss money laundering case, Geo News reported Tuesday.

According to Geo News correspondent, the Prosecutor General of Pakistan in Geneva deposited these cartons in the era of former President Pervez Musharraf.

The sources said the secret operation was carried out at the bidding of a top personality of Pakistan, as these evidences could be used if Swiss Money Laundering case is reopened after the National Reconciliation Ordinance (NRO) terms comes to an end.

The sources at Pakistan embassy said if the concerned officials or the courts do not interfere by taking the evidences back from Wajid, then these documents would be wasted for good.

The secret operation begins at 9am on Monday when Wajid arrived in Pak High Commission’s car along with NAB’s senior official Danishwar Malik at the office of Prosecutor General in Geneva.

According to sources, the Prosecutor General kept refusing to give the documents for some hours, as nobody from Pakistan embassy was formally receiving them.

It should be mentioned here that after the NRO, these cases were closed. However now that the term of NRO is over, it was all the more likely that these cases could be re-opened and these evidences could be employed against Zardari.

Riaz Haq said...

President Asif Zardari's total assets are estimated at $1.5 billion, according to a NAB filing with Pakistan Supreme Court, reports the News:

ISLAMABAD: The National Accountability Bureau (NAB) on Tuesday submitted in the Supreme Court the list of the NRO beneficiaries, which showed President Asif Ali Zardari possessing assets worth $1.5 billion (Rs 120 billion) abroad and worth Rs 24.14 billion in the country.

Deputy Prosecutor General Abdul Baseer Qureshi presented the list of 248 NRO beneficiaries before the full court, hearing the petitions challenging the infamous ordinance, promulgated in 2007 giving legal cover to the corruption of politicians and bureaucrats

A 17-member bench of the apex court, headed by Chief Justice Iftikhar Muhammad Chaudhry, had directed the NAB the other day to submit authentic details of the NRO beneficiaries. According to the list, there are at least seven abolished references against President Zardari. The list indicates that the assets of President Asif Ali Zardari in foreign countries stand at $1.5 billion, including houses and bank accounts in Spain, France, the US and Britain while his assets in the country stand at Rs 24.14 billion.

In the list, President Zardari’s assets worth Rs 22 billion were mentioned as beyond means and the cases in this regard were withdrawn by the Accountability Court on March 5, 2008, under the controversial NRO.

Similarly, cases of corruption of Rs 268.3 million regarding the purchase of Ursus Tractors (Awami Scheme) and illegal construction of the polo ground at the PM House at the cost of Rs 52.297 million were terminated under the NRO in March 2008.Likewise, the list also includes allegedly causing loss of Rs 1.822 billion to the national exchequer by President Zardari by granting licence to the ARY Gold. The said case was also terminated under the NRO ordinance.

The NAB deputy prosecutor general told the court that information regarding the misuse of authority in affairs of SGS PSI Company by Asif Ali Zardari as well as illegal award of contract to Cotecna for pre-shipment was being collected.

The NAB list included names of Interior Minister Rehman Malik, Pakistan’s Ambassador to United States Hussain Haqqani, Defence Minister Chaudhry Ahmed Mukhtar, former NWFP chief minister Aftab Sherpao Khan, ex MNAs Nawab Yousaf Talpur, Anwar Saifullah Khan, Sardar Mansoor Leghari, Haji Nawaz Khokhar, Pir Mukarramul Haq, Brig (retd) Imtiaz, Usman Farooqi, Salman Farooqi, former president Habib Bank Younus Dalmia, Mirbaz Khetran and many others.

He submitted that the National Assembly’s standing committee approved the NRO, however, the concerned minister took it back from the assembly. During the proceedings, advocates general of the Punjab, the NWFP and Balochistan informed the court that under Section 2-A of NRO, no review boards were constituted in their respective provinces to decide the murder cases.

Advocate General Sindh Yousaf Leghari, however, informed the court that 8,000 cases were dropped under the NRO in Sindh, of which 3,000 were murder cases. He sought time to provide details of the cases decided under Section 2-A of the NRO in Sindh. The court directed the AG Sindh to submit report before the court today (Wednesday).

Abdul Hafeez Pirzada, counsel for Dr Mubashar Hassan, submitted the ordinance as whole was void because it was a fraud ordinance as it violated many substantial provisions of the Constitution.

He submitted that reconciliation meant reconciliation between husband and wife, between parents but this National Reconciliation Ordinance had trampled the rights of the entire nation. Pirzada contended that all stakeholders were not taken into confidence before its promulgation. “The nation is threatened with fragmentation,” Pirzada maintained.

Riaz Haq said...

The Supreme Court of Pakistan has declared NRO null and void ab initio, according to Dawn News:

ISLAMABAD: The Supreme Court has declared the controversial National Reconciliation Ordinance (NRO) null and void in a short order.

In a landmark decision, the apex court unanimously decided that the ordinance was unconstitutional.

All old cases that had been dismissed under the NRO stand revived and can now be reopened as per the court orders.

The court said that all orders that were passed and all acquittals under the NRO were illegal and never existed.

The apex court in its order also said that all convictions that were held prior to the enactment of the NRO stand revived as well.


Now the Zardari camp is expected to argue that, under the constitution of Pakistan, President Zardari is immune from prosecution as long as he is in office.

Anonymous said...

Recent verdict of Supreme Court of Pakistan mean that Mr.Zardari was not eligible to contest for president election.Therefor immunity is also cancelled since Oct 2007.
Zardari must be put out of President house. The amount he earned by CORRUPTION was sufficent enough to build many hospitals, hundreds of schools and a lot of other welfare projects in country.
He must be hanged on street for depriving thousands of medical facilities and education. He is a butcher who killed his wife. Only death can complete his lust of money.
A.K. Khan Karachi.Pakistan

Riaz Haq said...

Here is an AP story about the aftermath of Pakistan's amnesty reversal:

ISLAMABAD, Pakistan—Pakistan's anti-corruption agency has barred the defense minister and nearly 250 other top officials from leaving the country as political turmoil deepens following a Supreme Court ruling that struck down a graft amnesty.

The agency said Thursday that the officials were now under investigation following this week's court verdict, which meant that up to 8,000 graft and other cases dating back to the 1990s have, or will soon be, reopened. The decision has roiled the country's political elite just as the United States is looking for a solid partner to help it fight against al-Qaida and the Taliban along the Afghan border.

U.S.-allied President Asif Ali Zardari and several of his key aides are among those who benefited from the amnesty deal. Zardari is protected by constitutional immunity from any criminal prosecution, but opponents say they plan to challenge his eligibility for office.

Pakistan's anti-corruption agency said 247 people who had cases withdrawn under the amnesty had been blocked from travel because cases against them were now under investigation. It did not say who was on the list, but Pakistani news channels reported that Interior Minister Rehman Malik—a key aide of Zardari—was included, as well as Defense Minister Ahmed Mukhtar.

Mukhtar told a local television station that immigration officials at the airport had barred him from boarding a Pakistani International Airlines plane to China along with the navy chief late Thursday. He said he planned to take delivery of a new warship. It was not clear what he was being investigated for.

While the armed forces are under nominal civilian control, analysts say that in reality the top brass—not Mukhtar—make the decisions regarding defense issues. As such, investigations against him and Malik are not expected to directly impact the country's fight against militancy in the border regions.

Wednesday's Supreme Court ruling has significantly weakened Zardari and raised question marks over his future. It has been welcomed by many Pakistanis, who viewed the graft amnesty as an immoral piece of legislation that whitewashed the crimes of the elite.

The 54-year-old, who heads the country's largest party, is already unpopular, in large part because of his close ties with Washington. He now faces the prospect of bruising court battles that will likely mean old corruption charges come under fresh scrutiny.

Zardari's aides said any corruption charges against him were politically motivated and noted that they have never been proved despite being aired since the 1990s. Critics countered he was morally obligated to resign, at least while the court heard any challenges to his rule.

"It will be in his own interest, it will be in the interest of his party and it will be good for the system," said Khawaja Asif, a senior leader from the opposition Pakistan Muslim League party.

The Obama administration needs political stability in Pakistan to succeed in neighboring Afghanistan, where violence against U.S. and NATO troops is running at all time highs. Washington is trying to get Islamabad to crack down on insurgents close to the northwestern border who it says are behind much of the insurgency in Afghanistan.

Earlier Thursday, two U.S. missile strikes pummeled targets in the border region killing 17 people, local intelligence officials said. The latest attacks in more than 40 this year rained down Thursday on North Waziristan, a haven for al-Qaida and the Taliban, including groups determined to push the U.S. and NATO out of Afghanistan.

It was not immediately clear exactly who or what was the target of the strike, and the Pakistani officials said they were trying to establish the identities of the dead.

Riaz Haq said...

Here is a BBC story about the aftermath of Pakistan's amnesty reversal:

A judge in Karachi has summoned the Interior Minister, Rehman Malik to appear before an anti-corruption court.

It follows a court ruling this week which ruled out an immunity granted to the minister and thousands of other Pakistani officials.

Mr Malik is one of around 250 officials whose corruption and criminal cases have been re-opened.

On Thursday Defence Minister Ahmed Mukhtar was barred from going to China after he was stopped at the airport.

Mr Mukhtar said immigration officials prevented him from boarding the plane for an official visit.

The latest developments after the supreme court ruled on Wednesday that an amnesty protecting senior members of government was unconstitutional.

Only recently has it been revealed that more than 8,000 politicians and officials benefited from the legislation.

Those under investigation are barred from leaving Pakistan but the others have so far not been named.

Presidential immunity

The BBC's Aleem Maqbool in Islamabad says that the ruling has thrown Pakistan's political administration into turmoil.

Our correspondent says that calls are growing for the president and the entire government to step down - something presidential aides have said will not happen.

The controversial amnesty was brought in by the previous president, Pervez Musharraf, and its removal opens the way to possible prosecution for allies of the current President, Asif Zardari.

Mr Zardari himself faces several pending court cases against him in Pakistan but is protected by presidential immunity.

Before taking office, he spent years in jail after being convicted on corruption charges he says were politically motivated.

Pakistan's main opposition, the Pakistan Muslim League-N of former Prime Minister Nawaz Sharif, has called on the president to resign.

Exit list

Mr Mukhtar told local television that his name was on the "exit list" restricting travel and that the federal investigation authorities had said he could not leave the country.

He told Geo TV that he had been planning to visit China for three days on an official visit in connection with the delivery of a warship.

"It was in connection with a corruption case but there is no corruption case against me - it is only an inquiry which is pending against me for the past 12 years."

He said he would "strongly defend" himself in court.

The amnesty was introduced by Mr Musharraf in order to allow Mr Zardari's late wife, Benazir Bhutto, to return to the country and stand for office, with the aim of a possible power-sharing deal with Mr Musharraf.

She returned to Pakistan from abroad after the so-called National Reconciliation Ordinance was signed into law, but was assassinated soon after.

Riaz Haq said...

Here's a World Bank assessment that corruption retards investment in Pakistan:

ISLAMABAD: The World Bank finds corruption a serious and growing obstacle to the investment climate in Pakistan besides expressing dissatisfaction over the issue of governance in the country.

In its 128-page draft report on Pakistan’s Investment Climate dated March 16, 2009, the WB said that corruption is largely associated with business-government interface and reveals that the menace is more widespread here as compared to other countries though the bribe rates here are lower. Referring to a survey conducted for the formulation of the draft report, the Bank says that results show that perceptions about corruption in Pakistan are based on actual experiences with paying bribes by the investing firms. It reveals that the firms making investment in Pakistan have to pay bribes even to get water, telephone and electricity connections.

In view of WB clarification to The News Wednesday’s report on power sector and its observation that this correspondent has drawn inferences from the Bank’s draft report, select portions of the report pertaining to governance and corruption are being reproduced to end any confusion being deliberately created about the findings of WB in its draft report.

On the issue of government, the report in its page 64 and para 135, said, “Consistent interpretation and application of rules and regulations is an important reflection of good governance. Discretion or lack of predictability and consistency in the interpretation of rules and regulations (by government officials) is indeed a severe problem in Pakistan. Only 46 per cent of firms in Pakistan believe that the officials interpret rules consistently, compared with 60 per cent in comparator countries.”

On the issue of corruption, the report’s para 136 states, “Corruption, a serious and growing obstacle to the investment climate, is largely associated with business-government interface. Corruption is considered a severe constraint by more than half of all the firms (57 per cent) in Pakistan, significantly higher than the 40 per cent figure from 2002 and much higher than those of the comparator countries, with the exception of Brazil and Bangladesh. It is common for firms in Pakistan to pay informal payments to government officials to get things done. In 2006, three out of every four firms strongly agreed or tended to agree with the preceding statement.”

Para 137 of the report says, “Results show that perception about corruption in Pakistan are based on actual experiences with paying bribes. In other words, the probability that a firm reported corruption as a serious obstacle rises by 29-percentage point (against 57 per cent in the full sample) if the firm experienced at least one incident of bribe. As with perceptions of corruption, bribe incidence in Pakistan has increased 20 per cent over time-from 40 per cent in 2002 to 48 per cent in 2007.”

Riaz Haq said...

Here's a report from the News about Zardari receiving expensive gifts:

ISLAMABAD: President Asif Zardari has set a new record within a year by taking one-third of all the expensive gifts presented to all Pakistani presidents and prime ministers. Of the gifts totalling Rs160 million, Zardari has taken gifts worth Rs62 million during the first year of his presidency.

In his foreign visits so far, Zardari has been given 27 gifts worth Rs62 million,which is one-third of the accumulated cost of the 3,039 gifts, which were given to presidents and prime ministers in three decades.

Zardari is said to have got two BMWs and two foreign manufactured Toyota Jeeps as gift by Libyan leader Colonel Qadafi during his visit to Libya, which he took to his home, after paying a sum of only Rs9.3 million as retention cost.

These shocking figures were produced before the Senate standing committee on cabinet division by the cabinet secretary on Monday during a presentation to its members. Zardari is now richer by Rs50 million within one year in the presidency, without doing a single rupee irregularity as this all was done under the law as he paid 15 per cent of the total cost of two BMWs and two jeeps and retained them.

The other 13 Pakistani presidents and prime ministers, from Gen Ziaul Haq to Gen Musharraf and from Prime Minister Mohammad Khan Junejo to Shaukat Aziz, quietly took 3,039 expensive gifts worth Rs160 million to their homes. The list shows three presidents and two prime ministers — Farooq Leghari, Gen (retd) Pervez Musharraf, Asif Zardari, Nawaz Sharif and Shaukat Aziz — took gifts worth Rs150 million out of Rs160 million but Asif Zardari took the largest share within a year of his presidency.

Others including Gen Ziaul Haq, Ghulam Ishaq Khan, Rafiq Tarar, and PMs Mohammad Khan Junejo, Benazir Bhutto, Balakh Sher Mazari, Zafarullah Khan Jamali and Chaudhry Shujaat Hussain got gifts worth Rs10 million.

This extraordinary list does not contain names of hundreds of ministers, federal secretaries, officials and military officers and generals who, too, received gifts from foreign dignitaries and took them home.

According to an official copy presented to the National Assembly committee members, the record of similar gifts received and retained by two prime ministers, Yousuf Raza Gilani and Zulfiqar Ali Bhutto, was not produced before the committee.

One source said either both the gentlemen did not get a single gift during their tenures or the official record of their gifts had gone missing so it was not produced before the committee members. The source claimed there could be one other possibility: the cabinet division bosses did not produce the record for some other “obvious reason”.

Shaukat Aziz, Gen (retd) Musharraf and Asif Zardari were among the few leaders who got the most expensive gifts. Sources said these gifts were valued at much lower price than their actual price to enable these leaders to take the gifts home without paying a single penny or after paying a meagre part of the cost.

Riaz Haq said...

Here's a Dawn editorial about wasted aid in Pakistan:

AND we wonder why our friends abroad are so hesitant to help Pakistan in its time of need. USAID’s inspector general recently posted audits of two Washington-funded programmes collectively worth $145m that apparently yielded little or no results. One sought to improve governance in Fata while the other was aimed at reforms in the education sector. In both cases, the auditor found that the money was funnelled into an administrative void where the programme’s existence on paper was more important than its implementation. Computers purchased remain boxed to this day and laptops have gone missing. The Obama administration’s shift in strategy, which envisages a more prominent role for NGOs rather than government organisations in the disbursement of aid, has only added to the confusion. Instead of fast-tracked implementation, what we have seen is statis. Hundreds of thousands of administrative dollars have gone into pondering over which NGOs and charities should be chosen, often without any tangible result. ‘Let’s meet again in Islamabad or Karachi, flying in delegates and putting them up in five-star hotels, to talk some more. Surely we’ll find a way to spend this money before July 30’ is the refrain.

It is understandable that the US and other foreign donors want to bypass a government accused of corruption and inefficiency. Pakistan’s bureaucracy is a quagmire where even the most mundane of tasks are either lost in a log-jam that has been decades in the making or are ignored until palms are greased in keeping with the ‘stature’ of the beneficiary. But here’s the rub. A few reputable organisations aside, Pakistan’s NGOs have perfected the art of racketeering. A new grant usually means more four-wheel drives for the head honchos whose output is largely limited to paper — to raising ‘awareness’ as opposed to working in the field. Funds received have to be spent within a given framework, even if the final product is redundant. Hundreds of thousands of rupees are paid to inept ‘consultants’.

Given this mess in both the public and private sectors, what is the way forward for foreign donors? One, demanding transparency in all interactions with the Pakistani government. Every dollar must be accounted for — possibly in bi-annual audits — and work on the ground must take precedence over publications or administrative costs. Two, being selective in the choice of NGOs, giving particular emphasis to their ethical mores and capacity to deliver. It’s not impossible.

Riaz Haq said...

Here's a BBC report about re-opening Swiss corruption probe against Zardari:

Pakistan's anti-corruption agency is to ask Switzerland to reopen corruption cases against President Asif Zardari.

The move came after Pakistan's Supreme Court said it would jail the head of the agency if he did not take action.

Mr Zardari and his late wife, former PM Benazir Bhutto, were convicted by a Swiss court in a $15m money-laundering case in 2003. They denied the charges.

Pakistan withdrew from the Swiss case soon after Mr Zardari's Pakistan People's Party came to power in 2008.

But an amnesty protecting Mr Zardari and other top officials from prosecution was annulled by the Supreme Court in December.

Court pressure

The court has been demanding corruption cases be reopened ever since, several of them involving President Zardari.

Before taking office, he spent years in jail after being convicted on corruption charges he says were politically motivated.

His political allies face possible prosecution in Pakistan, but he is still protected by presidential immunity.

If the Swiss authorities accede to the Pakistani request, he faces being investigated for corruption while in office.

On Tuesday Pakistan's Supreme Court threatened to jail the head of the country's anti-corruption agency unless he reopens hundreds of corruption cases.

It said the National Accountability Bureau (NAB) chairman Naveed Ahsan would be in contempt of court if he did not act within 24 hours.

"In light of directions of the court on the revival of the Swiss cases, the NAB has initiated the process," Abid Zuberi, a lawyer for the agency, told the court on Wednesday.

The Swiss Justice Ministry said it had yet to receive any request from Pakistan.

Riaz Haq said...

Here's an excerpt from William Dalrymple's book "Nine Lives" about Bhuttos:

Benazir was a notably inept administrator. During her first 20-month-long premiership, she failed to pass a single piece of major legislation, and during her two periods in power she did almost nothing to help the liberal causes she espoused so enthusiastically to the Western media.

Instead, it was under her watch that Pakistan’s secret service, the Inter-Services Intelligence (ISI), helped install the Taliban in Pakistan, and she did nothing to rein in the agency’s disastrous policy of training up Islamist jihadis from the country’s madrasas to do the ISI’s dirty work in Kashmir and Afghanistan. As a young correspondent covering the conflict in Kashmir in the late 1980s and early 1990s, I saw how during her premiership, Pakistan sidelined the Kashmiris’ own secular resistance movement, the Jammu and Kashmir Liberation Front, and instead gave aid and training to the brutal Islamist outfits it created and controlled, such as Lashkar-e-Toiba and Harkat ul-Mujahedin. Benazir’s administration, in other words, helped train the very assassins who are most likely to have shot her.

Benazir was, above all, a feudal landowner, whose family owned great tracts of Sindh, and with the sense of entitlement this produced. Democracy has never thrived in Pakistan in part because landowning remains the base from which politicians emerge. In this sense, Pakistani democracy in Pakistan is really a form of “elective feudalism”: the Bhuttos’ feudal friends and allies were nominated for seats by Benazir, and these landowners made sure their peasants voted them in.

Behind Pakistan’s swings between military government and democracy lies a surprising continuity of elitist interests: to some extent, Pakistan’s industrial, military and landowning classes are all interrelated, and they look after each other. They do not, however, do much to look after the poor. The government education system barely functions in Pakistan, and for the poor, justice is almost impossible to come by. According to the political scientist Ayesha Siddiqa, “Both the military and the political parties have all failed to create an environment where the poor can get what they need from the state. So the poor have begun to look for alternatives. In the long term, these flaws in the system will create more room for the fundamentalists.”

Many right-wing commentators on the Islamic world tend to see political Islam as an anti-liberal and irrational form of “Islamo-fascism”. Yet much of the success of the Islamists in countries such as Pakistan comes from the Islamists’ ability to portray themselves as champions of social justice, fighting people like Benazir Bhutto from the corrupt Westernised elite that rules most of the Muslim world from Karachi to Riyadh, Ramallah and Algiers.

Benazir’s reputation for massive corruption was gold dust to these Islamic revolutionaries, just as the excesses of the Shah were to their counterparts in Iran 30 years earlier: during her government, Pakistan was declared one of the three most corrupt countries in the world, and Bhutto and her husband, Asif Zardari — widely known as “Mr 10%” — faced allegations of plundering the country; charges were filed in Pakistan, Spain, Switzerland, the United Kingdom and the United States to investigate their various bank accounts, and they stood accused of jointly looting no less than $1.4 billion from the state.

Riaz Haq said...

Here's a billion dollar LNG contract scandal uncovered by a complaint of the Fauji Foundation CEO, as reported by The News:

The NA members were told that the petroleum ministry bosses had never recommended to the Economic Coordination Committee (ECC) to give the multi-billion dollar contract to French firm (GDF-SUEZ), whom surprisingly they all were religiously defending now.

It was disclosed that the petroleum ministry had actually recommended the award of the contract to Shell-Qatar, whose bid was higher than the French bid by $1.5 billion. But Shaukat Tarin had thrown this recommendation of the ministry in a dustbin after he learnt that he was being asked to award the contract to a party (Shell), whose bid was higher by $1.5 billion compared to the lowest bidder.

At the end of the hour-long presentation followed by a question-answer session, Chairman MNA Sheikh Waqas Akram, praised the journalist for his comprehensive presentation. Later, MD Fauji Foundation Lt Gen Rab Nawaz was said to have reiterated his old stance that his firm’s bid was the lowest if compared with the GDF-Suez, which was awarded the deal.

The committee met with Chairman Sheikh Waqas in the chair and was attended by MNAs Barjees Tahir, Nawab Yousuf Talpur, Wasan, Khurum Wattoo and others. Petroleum Minister Naveed Qamar, Secretary Kamran Lashari, Special Secretary G A Sabri and MD FF General Rab Nawaz attended the meeting.

Klasra told the committee that his story was based on the minutes of the ECC presided over by then Finance Minister Shaukat Tarin. The minutes had revealed that Tarin had got a telephone call from MD Fauji Foundation that the lowest bid given jointly by FF/Vitol had been rejected and the highest bidder GDF-Suez was given the lucrative contract. Tarin had informed MD FF that he was not aware of any such bidding because the petroleum ministry never shared such information in its official summary tabled before the ECC on Feb 9.

Consequently, Tarin had alarm bells ringing and had ordered a serious probe into the whole issue as to why the bid offered by FF/Vitol was not mentioned in the summary. But the petroleum ministry never replied to the queries of Tarin till he departed from his office at the end of February, much to the satisfaction of the petroleum ministry officials who thought that the issue had been buried but the publication of the scandal by The News shook them.

Petroleum ministry officials had even written a letter to Tarin, informing him that Minister Naveed Qamar had desired that they should not respond to him as he would “personally deal” with this issue. According to Klasra, he had contacted Shaukat Tarin to get his version about these startling developments and the ex-FM had confirmed on record that he was kept in the dark about the joint bid of FF/Vitol, which was claimed to be the lowest.

Tarin confirmed that he got no reply from the Ministry of Petroleum till he left the office. He also claimed that according to his calculation and information, there was a difference of one billion dollars in the bid price of the French company and FF/Vitol, so the country had suffered a loss of a billion dollar.


Minister Naveed Qamar is a close friend and ally of Zardari.

Riaz Haq said...

In the last two years since the resignation of President Musharraf, the corruption perception has worsened in Pakistan, according to the latest Transparency International Corruption report 2010. Though the 2009 Corruption Survey Report was an eye-opener, but this year it was shocking Khyber Pakhtoon Khawa Province (former N.W.F.P) beat all the provinces and has the highest rate of corruption in Pakistan. Here Here are some of the highlights of this report.

* The report titled the National Corruption Perception Survey 2010 showed a high rise in corruption from 195 billion rupees in the year 2009 to 223 billion rupees in the year 2010.
* Bureaucracy and Police had maintained their ranking as the two of the most corrupt departments in public sector in 2010.
* Land administration departments were placed third in corrupt practices.
* Corruption in the judiciary, local government and education sectors has also increased as compared to the last year.
* Syed Adil Gilani chairman of TIP said that about 70 % of people believed that the previous military regime of General Pervez Musharraf was less corrupt then the present Pakistan People's Party (PPP) led coalition government.
* In terms of bribery, land administration was the most corrupt sector, where average bribe paid in each incident was 46, 414 rupees.
* KPK (NWFP) is highlighted to be the most corrupt of all the provinces.

Riaz Haq said...

Here are some excerpts from an Asia Times report about tax cheating by the rich and powerful feudal politicians in Pakistan:

A case in point is Sardar Farooq Legari, whose estates extend from the Punjab to the Pakhtunkhwa. In 1994-95, he reported "zero income" while he was still the sitting president of Pakistan. Imran Khan, leader of the Pakistan Tehrik-e-Insaf (Pakistan's Justice Movement) shamed the entire landed class by revealing that a practicing lawyer, Khalid Ishaq, paid more in taxes in 1992-93 than all 273 members of the National Assembly combined - 85% of whom were large landholders.

This shaming, however, did not work on lawmakers who kept evading taxes. In 1994-95, celebrated journalist-writer M Ziauddin conducted a thorough investigation into the taxable farm income and tax-paying behavior of wealthy farmers. He found that all landlords in the country pitched in just chump change of 2 million rupees in taxes in 1996 against their annual income of 600 billion rupees. On this scale, Ziauddin concluded that the landowning classes had been evading taxes of 100 billion rupees a year.

This is a blatant case of tax theft, which has spawned its own vicious knock-offs, one of which is "black money" (that is, totally untaxed wealth). In 1996, an economist estimated that black money in Pakistan grew as large as to form 40% of GDP. If left alone, tax evasion in the above-ground economy or underground economy increases the budget deficit and forces governments to shift the tax burden to consumers or to increase money supply.

In either case, it is a whammy for the poor. In the 2008-09 budget, Pakistan has set itself on the course of widening the tax net. In terms of the tax-GDP ratio, the current budget features a relatively high ratio at 14%. The tax base also is on the rise. In 1994, it consisted of an overwhelming majority of the working middle class of 800,000 tax payers, who have now grown to more than 2 million.

The government, thus, can over the next 10 years raise $50 billion - $5 billion a year - to rein in poverty. At the current exchange rate, $5 billion comes to 345 billion rupees. Economist Shahid Hasan Siddiqi believes that Pakistan is undertaxed by 400 billion rupees a year. Its tax revenue should be 1.6 trillion rupees as against the projected 1.25 trillion rupees for 2008-09.

Riaz Haq said...

Recent survey by Transparency in Pakistan show that the corruption in Pakistan has dramatically increased, according to report in Dawn. Here are some excerpts:

The overall corruption has increased by around Rs28 billion in a year, and more than 70 per cent of Pakistanis say the present government is more corrupt than the previous one, said a Transparency International Pakistan official.

Releasing the findings of the National Corruption Perception Survey 2010 at a press conference at the Karachi Press Club on Tuesday, TIP chief Adil Gillani said that over Rs195 was misappropriated during 2009 while more than Rs223 billion — an increase of Rs28 billion, or about 15 per cent — has been misappropriated during 2010.

He said the survey — jointly financed by the USAID and the Swiss Agency for Development and Cooperation — reveals the perception levels and frequency of corruption faced by the common Pakistanis on a daily basis.

He said an average expenditure on bribery per household this year was Rs10,537, based on a population of over 169.58 million and eight members per family, the cost of bribery comes to Rs223 billion.

Mr Gillani said the departments of police and the power sector had retained their first and second positions, respectively, since 2002. Other corrupt sectors during 2010 were the land administration, education, local government, judiciary, health, taxation, customs and tendering and contracting.

Pakistan at 42nd position

He said Pakistan shared the 42nd position among the most corrupt countries in the world with Bangladesh. India, though located in between and despite being more populous, was less corrupt than both its neighbours and was placed on the 95th position on the chart of corruption.

He said the TIP had developed a 24-page questioner that was put to 5,200 people from all the four provinces. Students of the Institute of Business Administration Karachi carried out the survey in Sindh; Gujranwala University, Gomal University and Sarhad University carried out the survey in Punjab, Balochistan and Khyber Pakhtunkhwa, respectively.

He said the survey found that only the present Punjab government was cleaner than the previous one, while the rest of the governments — federal and three provincial ones — were considered to be more corrupt than their predecessors. The Khyber Pakhtunkhwa government was the most corrupt of the provincial governments, he said.

The TIP chief said the credibility of the country was at the lowest level as almost no funding had been released in the last two years from the Friends of Pakistan fund being managed by the World Bank.

Mehreen said...

the truth is that people party is a curse on pakistan sent by Almighty for our own doing.corruption has always been flourishing during this party's tenure.one example: a person purchased a peon's job for rs.50,000/. he is happy and staunch supporter of ppp.why? he says he got the job through pp agent otherwise there was no chance of getting the job.he would earn fifty thousand in 5/6 months otherwise he would have remained unemployed for ever.the pp agent is happy that he received his share because of the pp govt. and the peon is happy the he got the job because of pp govt. Both are staunch supporter of pp and would do their best to help pp in any elctions. can you, n muslim league walas, beat them. keep on your policy of friendly opposition.
sardar muhammad riaz khan

Riaz Haq said...

Here's the news of Faisal Saleh Hayat asking the Supreme Court to review irregularities in the award of rental power plants:

ISLAMABAD: Justice Khalilur Rehman Ramday, a member of the Supreme Court bench hearing allegations of corruption in rental power plants (RPPs) projects, said on Wednesday he wondered why Pakistan was getting a mere 150MW of electricity despite having paid a whopping amount of Rs18 billion as a mobilisation fund to power generators one and a half years ago.

Taking a suo motu notice of the allegations, the three-judge bench comprising Chief Justice Iftikhar Mohammad Chaudhry, Justice Ghulam Rabbani and Justice Ramday ordered the IT in-charge of Pakistan Electric Power Company (Pepco) to retrieve information about the company’s generation capacity of the past one year, along with details of shortfall.

According to former minister Faisal Saleh Hayat of the PML-Q, the information had been removed by Pepco from its website.

“The statement seems to be true as our own responsible officer from the IT department confirms it,” the chief justice said, adding: “Prima facie we are of the opinion that Pepco for reasons known to its authority has removed the figures whose retrieval is very important for a decision by this court.”

The chief justice observed: “After such a big investment, prima facie the desired results have not been achieved.” He said that not any other forum, but an Asian Development Bank report itself had said so.

Last year the federal government had approved plans to set up rental power projects to generate about 1,206MW of electricity to end loadshedding.

But the plans became controversial when Faisal Saleh Hayat, a member of the National Assembly, levelled corruption allegations against Water and Power Minister Raja Pervez Ashraf in the house. Mr Ashraf rubbished the allegations and threatened to sue Mr Hayat.

The court asked Pepco’s IT in-charge to appear in person and submit the company’s authentic record.

He is required to retrieve the information from ‘master server’ if it is not available at the website.

Mr Hayat, who was summoned by the court to substantiate the allegations, described the RPP deal as the mother of all corruption and said the units being installed were 10 years old and had outlived their utility.

“They (plants) are not only very expensive, but their generation capacity has also deteriorated over the years,” he said.

Citing the official record he had downloaded from Pepco’s website, Mr Hayat said that Pakistan’s power generation capacity was about 19,478MW in 2008 while the total electricity demand was 18,200MW in 2009. About 3,068MW had been purchased from independent power producers (IPPs) which, he said, was half the capacity of 6,098MW generated through thermal plants.

Despite adequate generation capacity, Mr Hayat alleged, the much-needed power requirement was deliberately not met to justify installation of rental power houses and callously leave the poor masses to bear 14 to 18 hours of loadshedding. Besides, he said, managing directors had been appointed in Pepco in violation of the company rules because they were neither engineers nor finance specialists, or from business or accounts.

“The power generated by IPPs cost us 10 to 12 US cents per unit while the same from RPPs will cost us 15 to 22 cents,” Mr Hayat said.

But Khawaja Tariq Raheem, the counsel for Pepco, said the electricity from RPPs would cost the country Rs14 per unit while the same from thermal power (IPPs) cost Rs12 to 18. The electricity from hydel projects cost Rs2-2.5.

Riaz Haq said...

The latest Transparency International report says corruption has significantly increased in Pakistan during the last two years. Pakistan has slipped from 134th place in 2008, to 139th in 2009 and 143rd in 2010:

KARACHI: Pakistan's decline continue in Corruption Perceptions Index (CPI) and now its Index Score is 2.3 against 2.4 in 2009, and out of 178 countries, its ranking as most corrupt country has slipped 7 ranks, from 42 in 2009 to 34 most corrupt country in 2010.

The 2010 CPI shows that nearly three quarters of the 178 countries in the index score below five, on a scale from 0 (perceived to be highly corrupt) to 10 (perceived to have low levels of corruption), indicating a serious corruption problem.

Syed Adil Gilani, Chairman TI Pakistan said in last two year there have been unprecedented cases of corruption involving tens of billions of rupees in public sector organization, which under the Rule of Law, should have been taken up by the National Accountability Bureau.

He said the political will of the government to fight corruption is lacking which has resulted in the Supreme Court of Pakistan to take suo moto action against mega corruption in NICL, Pakistan Steel, Rental Power Plants.

The CPI 2010 reveals that corruption in Pakistan is increasing, while in Bangladesh it is decreasing. Bangladesh was perceived to be the most corrupt country in 2001, 2002 and 2003 and its ranking in 2010 is 39 most corrupt country.

Reduced corruption has paid dividends to Bangladesh whose annual GDP growth last year was over 5%, while Pakistan's GDP growth last year was near 2.4 %. Delay in formation of An Independent Accountability Commission by the parliament may further aggravate the situation.

Chairman TI Pakistan said that the Supreme Court of Pakistan, which has a declared policy of Zero-Tolerance for Corruption on 22 March 2009, in its order of 12th October, 2010 in NICL Case No.18 of 2010 involving six procurements is considers the Violation of Public Procurement Rules 2004 as a criminal act. It is a landmark order, treating violation of Public Procurement Rules 2004 as a federal crime and it will help reduction in Corruption.

The direct impact of increased corruption is witnessed in the rise in the prices of food commodities which according to the latest official data of Federal Bureau of Statistics, have increased up to 120 percent in last one year viz. sugar from Rs 54 to Rs 80, pulses from Rs 50 to Rs 110, eggs from Rs 35 to Rs 60, and the Foreign Direct Investment for the fiscal year 2009-2010 dropped to US $ 2.21 billion from US$ 3.71 billion in FY 2008-2009, and in July-Sept 2010 it is further dropped to US $ 387.4 million ( 68% of last year).

Foreign debt on Pakistan increased from US $ 40 Billion in 1999 to US $ 46 billion in 2008, whereas in last two years it has increased to US $ 53.5 billion.

Across the board Application of Rule of Law, Merit based appointments and easy Access to Justice is the only solution to save Pakistan from corruption, which is responsible for poverty, inflation, terrorism, illiteracy, lack of electricity and hording of essential food commodities.

In the 2010 CPI, Denmark, New Zealand and Singapore tie for first place with scores of 9.3. Unstable governments, often with a legacy of conflict, continue to dominate the bottom rungs of the CPI. Afghanistan and Myanmar share second to last place with a score of 1.4, with Somalia coming in last with a score of 1.1.

Riaz Haq said...

The Transparency International Pakistan (TIP) has claimed that it has identified corruption cases worth Rs 300 billion in different federal government departments during the last one year.

Expressing his disappointment, Chairman TIP Syed Adil Gillani said that there was no effective accountability process in Pakistan due to which corruption was on the rise. He said that the TIP referred a number of corruption cases to the National Accountability Bureau (NAB), one of Pakistan's controversial departments, but it did not initiated so far a single case against the perpetrators.

"Only the Supreme Court of Pakistan, the Public Accounts Committee of the National Assembly and the Public Procurement Regulatory Authority (PPRA) took notice of some of these corruption cases," he said.

The report released by TIP on Tuesday indicates that Pakistan is all set to hit further lows amongst the world's most corrupt nations. The 2009 report showed Pakistan climbing five numbers from the previous 47 to become the 42nd most corrupt country in the world.

Amongst the major corruption cases, Gillani said the Rental Power Projects (RPPs) of the government, was on the top. The government awarded 14 contracts in violation of the PPRA rules which caused a loss of over US$ 2 billion. The TIP had also written to the Supreme Court on this case of massive corruption and irregularity.

The sale and procurement policy of the Pakistan steel Mills had caused a reported loss of Rs 22 billion due to corruption. This corruption case had already been taken up by the apex court.

Gilani also informed of about the alleged violation of Pubic Procurement Rules 2004 by Pakistan Railways in the tender for procurement of 150 locomotives, only US made, which might have caused a loss of at least Rs 40 billion to the national exchequer. The project, he said, is presently on hold.

The other departments involved in mega corruption cases, according to Gillani, include Pakistan's Oil and Gas Development Company (OGDCL), National Insurance Corporation Limited (NICL), PRIMACO (Pakistan Real Estate Investment and Management Company Ltd), National Highways Authority (NHA), Trade Development Authority of Pakistan (TDAP), Pakistan Electric Power Company (PEPCO), Employees Old-age Benefit Institution (EOBI). Pakistan's Oil and Gas Development Company Limited made headlines in the recent past when Prime Minister Gillani appointed his jail mate and a convict who was not even a graduate as its managing director.

Read more: Pakistan world's 34th most corrupt nation - The Times of India http://timesofindia.indiatimes.com/world/pakistan/Pakistan-worlds-34th-most-corrupt-nation/articleshow/6815792.cms#ixzz13Vn9ofdc

Riaz Haq said...

Here are some excerpts from a recent by India's Tehelka.com piece on the impact in South Asia of Swiss Bank secrecy law change forced by the United States:

SHAKEN BY the Swiss government’s recent announcement that it would reveal the names and account details of Indians who have stashed away an estimated $1.4 trillion ( Rs.62 lakh crore) in Swiss banks, the tax evaders are rushing the greenbacks back home. The Swiss are only waiting for the Indian Parliament to ratify the revised Double Taxation Avoidance Agreement (DTAA) that the two countries signed in August. The revised treaty is also likely to ensure that henceforth global shipping companies will be required to pay tax on their profits only in their country of domicile. Currently, though India has DTAAs with 79 countries, not all of them have provision for exchanging taxation-related information..............
-----
As for the Swiss government, it could soon push its banks to exchange information related to the tax evaders’ bank account details, as per norms set by the Paris-based Organisation for Economic Cooperation and Development. The move is believed to have been prompted by intense pressure from G-20 nations. “This is worrying many Indians who have money stashed away in those banks,” says Jethmalani, adding: “So they are taking out their money and, for the time being at least, investing heavily in the market.”

And this has been happening in Pakistan as well, ever since the Swiss Parliament’s historic move to pass the Return of Illicit Assets Act (RIAA). There, too, the tax evaders have started transferring billions of dollars from their Swiss bank accounts to secret destinations in Europe and Asia. According to recent estimates, roughly $200 billion — four times the external debt of Pakistan — is stashed away in Swiss banks and is now being withdrawn. Top sources in Lahore say they have evidence that Pakistanis are moving their black money to two destinations — London and Islamabad — via PN, and opening sub-accounts with FIIs. “Our problems are similar. They are making everything above board, everything official,” said Ali Mohammed, a broker at the Karachi Stock Exchange.

Earlier this month, Christa Markwalder, president, Foreign Affairs Committee (Presidentin Aussenpolitische Kommission des National Rats) of the Swiss Parliament told Tarun Vijay, MP and national spokesperson of the Bharatiya Janata Party, that she had recently explained to Finance Minister Pranab Mukherjee about how the matter could be resolved to India's satisfaction. Incidentally, Vijay was the first to directly contact the Swiss government in this regard. But Jethmalani feels India is not pressing the Swiss hard enough. “Soon, there will be a crash of an unusual nature in the markets — because even if the Swiss government is keen, the Indian government does not seem to be keen to push the agenda,” says Jethmalani.

Riaz Haq said...

Here's a report of French Defense Minister confirming bribes paid to Pakistani officials on a submarine deal in the 1990s during the PPP regime:

Former French defense minister has confirmed bribes on arms deals with Pakistan, the cancellation of which prompted the deadly Karachi bombing in 2002.


Charles Millon, on Wednesday, told a hearing tasked with probing into the killing of French engineers that he was sure there were kickbacks on ammunition contracts with Pakistan.

“For the Pakistani contract, looking at the secret service reports and analyses carried out by the (defense) ministry services, one has the absolute conviction that there were kickbacks,” AFP quoted Millon.

Former President Jacques Chirac had tasked him with ending bribes on arms contracts shortly after coming to power in 1995.

However, bribing between officials and corporations in France continued until an incident involving arms deals eight years ago allegedly resulted in a deadly bombing in Pakistan.

The bomb attack took place in Karachi, in May 2002, in which 15 people died, including 11 French engineers and technicians from the Directorate of Naval Construction, working in the construction of submarines.

Since 2008, French persecutors are examining charges that the cancelling of commissions for one of the arms deals prompted the attack.

Riaz Haq said...

Here is a Christian Science Monitor report on wikileaks early reaction in Pakistan:

Long derided in liberal Pakistani circles as a fanciful conspiracy theory, the notion that the US has designs on Pakistan’s nuclear arsenal will likely gain traction here following a report that the US has mounted a secret effort to remove highly enriched uranium from a Pakistani reactor since 2007....
The perception that America is attempting to rob Pakistan of its nuclear capability has long been touted by Islamists and hardliners in Pakistan, and is frequently brought up alongside the theory that the security firm Xe (formerly known as Blackwater) is responsible for a spate of suicide bomb attacks on civilian targets over the past few years. The US, for its part, has been keenly aware of the sensitivity of the issue, so much so that in May 2009, Ambassador Anne Patterson reported that Pakistan was refusing to schedule a visit by American technical experts for fear of stoking the Pakistani media’s suspicions.

According to security analyst Gen. (ret.) Talat Masood, the WikiLeaks revelations will prove a boon to hardliners in Pakistan.

“It really reinforces [what until now] has been a conspiracy theory – that America has always been after nuclear assets and gives a big handle to the right and those who have been saying America is not a our friend and saying they are following a dual policy: with India they are friends but with Pakistan they are trying to simultaneously undermine us.”

General Masood predicts the WikiLeaks cable report will have a serious short-term and long-term impact on US-Pakistan relations, and undermine those Pakistanis who have spoken up in favor of closer cooperation with the US in recent times.

“It places such people on the defensive – it looks like the US is trying to get close to Pakistanis who are more Westernized but who are compromising Pakistan’s national interest,” he says.

According to Pervez Hoodbhoy, an eminent Pakistani nuclear physicist based at Quaid-i-Azam University in Islamabad, the report probably refers to the highly enriched uranium Pakistan received from the US in the late 1960s as part of the "Atoms for Peace" program, before its weapons program began.

“As far as I can guess, the leak refers to highly enriched uranium that Pakistan received from the US in the late 1960's or early 1970s for running the small 5-mw research reactor at PINSTECH,” he says, in reference to a research center based close to Islamabad that is aimed at producing atomic energy. “There is no other reactor in Pakistan that runs on HEU. I suppose that the US wants it back because of fears that Al Qaeda might get its hands on it somehow.”

Pakistan gained its own nuclear enriching capability in 1976, therefore the removal of some highly enriched uranium by the United States would not eliminate its ability to create nuclear weapons.

Attempt to create misperceptions?
Separate WikiLeaks cables concerning Pakistani politicians could also prove embarrassing to its allies.

In one cable, King Abdullah of Saudi Arabia derides President Asif Ali Zardari as the biggest hurdle to progress, stating, “When the head is rotten, it affects the whole body.”

President Zardari however received a tepid lukewarm "endorsement" from Abu Dhabi Crown Prince Mohammed bin Zayed, "Zardarni [sic] is dirty but not dangerous," while… Sharif is “dangerous but not dirty – this is Pakistan. Sharif cannot be trusted to honor his promises,” a reference to Pakistan’s foremost opposition leader, Nawaz Sharif.

Farhatullah Babar, the president’s spokesman, said via text message that “President Zardari regards Saudi King Abdullah as his elder brother. The so called leaks are no more than an attempt to create misperceptions between two important and brotherly Muslim countries.”

Riaz Haq said...

Here's a BBC report saying "the world is a more corrupt place now than it was three years ago".

Some 56% of people interviewed by Transparency International said their country had become more corrupt.

In Afghanistan, Nigeria, Iraq and India more than 50% of people said they had paid a bribe in the past year - many of them paying off the police.

Meanwhile, a BBC poll suggests that corruption is the world's most talked about problem.

About one in five of those polled for the BBC by GlobeScan said they had discussed issues relating to corruption with others in the last month, making it the most talked about concern ahead of climate change, poverty, unemployment and rising food and energy costs.

In the Transparency International survey, political parties were regarded as the most corrupt institutions with 80% of people regarding them as corrupt.

Political parties also topped the list in Transparency's 2004 barometer, with 71%.

Religious bodies experienced a sharp rise in people regarding them as corrupt - 28% in 2004 increased to 53% by 2010.

Some 50% of people believed their government was ineffective at tackling the problem of corruption.

Transparency flagged up bribery as the major problem highlighted by the survey, with one in four of those polled saying they had paid a bribe in the past year.

Some 29% of bribes went to the police, 20% to registry and permit officials, and 14% to members of the judiciary.

Robin Hodess, Transparency's policy and research director, said police involvement in such transactions was "really worrying".

"It's a figure that's grown in the past few years. It's nearly doubled, in fact, since 2006. Nearly one in three people who had contact with the police around the world had to pay a bribe," she said.

While people from Cambodia (84%) and Liberia (89%) were the most likely to have to pay a bribe, the Danish respondents reported no bribery.

By region, people in sub-Saharan Africa were the most likely to have paid a bribe (56%).

Bribe-taking was least common in EU countries and North America (both 5%) - although these were the two regions seeing the biggest increase in concern about corruption.

Analysts blame this rising concern on the global financial crisis for undermining people's faith in government, banks and economic institutions.

The lobby group interviewed 90,000 people in 86 countries to compile its corruption barometer.

The opinion poll commissioned by the BBC sampled 13,000 people in 26 nations.

One question asked people to rate which issues they saw as most serious.

Corruption was ranked as the second most important topic behind poverty.

Respondents in Brazil, Egypt, Colombia, the Philippines and Kenya were especially likely to view corruption as a very serious issue.

In Europe, Italians were the most concerned about bribe-taking.

Publication of the BBC poll coincides with anti-corruption day held by the United Nations.

Riaz Haq said...

Indian Supreme Court appears to be following Pakistani Supreme Court's lead in fighting corruption.

Here's a BBC report:

India's Supreme Court has said that the practice of illegal funnelling of wealth overseas by Indians is a "pure and simple theft of national money".

The court also asked what the government was doing to retrieve the illegal money in foreign banks.

US-based group Global Financial Integrity has said that India has lost more than $460bn in such illegal flight of capital since Independence.

It said the illicit outflows increased after economic reforms began in 1991.

The report also said that almost three-quarters of the illegal money that comprises India's underground economy ends up outside the country.

India's underground economy has been estimated to account for 50% of the country's GDP - $640bn at the end of 2008.

Wednesday's remarks by the Supreme Court came when it was hearing a petition filed by a former federal Law Minister Ram Jethmalani and others on the alleged inaction of the government in bringing back illegal money parked overseas by rich Indians and companies.

In response, India's Solicitor-General Gopal Subramaniam submitted a sealed cover containing 16 names of individuals and companies who had accounts with a Liechtenstein-based bank.

"This is all the information you have or you have something more! We are talking about the huge money. It is a plunder of the nation," remarked Justice B Sudershan Reddy.

'Mind-boggling crime'

"It is a pure and simple theft of national money. We are talking about [a] mind-boggling crime.

Mr Subramaniam said the government was taking measures to bring back the illegal money, but said there were difficulties in sharing the information because of confidentiality treaties between countries.

"All we want is that you give all the information about the money deposited in the foreign banks by Indians. You cannot confine the petition to one bank," Justice SS Nijjar said.

The court has fixed 27 January as the next date of hearing.

Global Financial Integrity said the illegal flight of capital through tax evasion, crime and corruption had widened inequality in India.

High net-worth individuals and private companies were found to be primary drivers of illegal capital flows.

Riaz Haq said...

Here's an Op Ed by Soutik Biswas of BBC.com on India's "black money" stashed away in foreign banks:

One analyst calls "black money" or illicit money India's curse. He's not off the mark - I have been hearing of and reading about this scourge ever since I was in junior school. Several decades later, the problem has only worsened. The government reckons there are no reliable estimates of "black money" inside and outside the country - a "study" by the main opposition BJP in 2009 put it at anything between $500bn to $1.4 trillion. A recent conservative estimate by the US-based group Global Financial Integrity Index pegs illicit capital flows between 1948, a year after Independence, and 2008, at $462bn - an amount that is twice India's external debt. India's underground economy today is estimated to account for half of the country's GDP.

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Strong words indeed. But they may not be enough to uncover India's biggest and longest-running scandal. This week, Finance Minister Pranab Mukherjee unveiled what critics said was a laundry list of tedious platitudes and obscure, non time-bound plans to check the "menace of black money". This includes joining a "global crusade" against it, creating appropriate legislation and institutions to deal with such funds and imparting skills to officers tasked with detecting such funds. In effect, what the government is saying is that after 63 years of independence, India has no institutions or trained people available to curb a brazen and thriving underground economy which rewards tax evaders, humiliates tax payers and widens inequity.

There is enough evidence to show that there is little political or administrative will to curb "black money". India has double taxation treaties with 79 countries. But 74 of these treaties need to be tweaked significantly to include exchange of banking information between the countries. (Letters have been issued to 65 of these countries to initiate negotiation, says the minister.) India has apparently chosen 22 countries and tax havens for negotiating and signing exchanging tax information. Last year, a law to prevent money laundering was given more teeth - but laws are often flouted with impunity in the world's largest democracy. The government says it plans to hone direct tax laws further to begin taxing deposits in foreign banks and interests in foreign trusts.
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Independent economists believe that despite the government's recent noises, "black money" will continue to blight India and its economy. For one, it is a systemic problem. Those who don't pay taxes or stash away illicit money overseas comprise the political and professional creme de la creme - politicians, bureaucrats, businessmen, doctors, lawyers, chartered accountants, judges. That the government is not keen upon cracking down on illicit capital flows was evident, analysts say, when, in 2008, it refused to accept a compact disc from Germany containing names of account holders in a Liechtenstein bank. Last year, under opposition pressure, the government accepted the CD, but refused to disclose the 26 names of Indian account holders in it. Many believe that a year is enough for the account holders to move their money out of the bank. "Unless there is political will to dig out black money, nothing will happen," says Arun Kumar of Delhi's Jawaharlal Nehru University, who has investigated India's underground economy in detail. And the humiliation of the honest citizen will continue.

Riaz Haq said...

Here are some excerpts from an interesting Op Ed by Prof Lev Ginsburg on democracy in developing world, as published in Aljazeera English:

The basic reason for democracy's lack of solutions to such problems (poverty, economic disparity) is that its principles have been formulated in industrialised capitalist societies characterised by considerable cultural homogeneity and relatively small economic gaps.

Democracy is a set of formal principles developed in Western Europe with the aim of facilitating the representation and articulation of the middle and working classes and designed to contain peacefully the conflicts between them and the upper class.

In the absence of a balance of power between classes, and a consensual unifying national identity, the automatic installation of formal democratic principles might only make matters worse.
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When there is a systematic link between cultural identity and economic status, democracy becomes a problem, rather than a solution. It exacerbates cultural conflicts to the point of violence, because it provides a formal opportunity for the majority to force their will on the minority.

Political sociologist Michael Mann has shown that in these cases democracy only serves to intensify conflicts among racial and ethnic groups, to which I would add, in the Middle Eastern context, the conflict between confessional groups and between the religious and the secular.
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The oldest case, mind you, is the US - the cradle of the democratic constitution which announced a "government of the people" and began the massacre of the American indigenous people because they were not considered part of "we, the people" of America.
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Whoever wants democracy under these conditions must first come up with a creative and consensual formula, according to which each cultural group would be free to live its unique cultural life without attempting to force its identity and customs on the entire citizen body.

In other words, demonstrating for democracy is not enough. What the countries of the Middle East require is political consensus on mutual recognition of rights and coexistence, guaranteed by a constitution and institutionalised by electoral procedures and representative institutions.

Egypt does have to worry, however, about economic inequality and the severe daily hardships suffered by most of its population. Without providing solutions to these problems, even the most democratic regime can be toppled by massive protests, possibly leading to new forms of dictatorship. A good example of such a failure of democracy was December 2001 in Argentina, when the masses flooded the streets calling for "all politicians to go home" and toppling five presidents in a row.

This happened only two years after democratic elections swept a broad leftwing front to power, which had promised to bring the country out of its deep economic crisis, but failed. The elected government pursued the policy dictated by the International Monetary Fund (IMF), which protected the interests of foreign investors against those of the local middle and salaried class. The crisis caused all holders of local bank deposits to lose 70 per cent of their money, with the blessing of the IMF.

Therefore, Egypt must realise that although democracy is essential, any formal constitution or system of government will not solve its economic problems. Immediately after the elections, Egypt's new policymakers will have to switch from the formal liberal discourse of democracy to face and discuss the fundamental questions of Egypt's economic structure. In the process, they are liable to discover that it is far more difficult to uproot a corrupt economic regime than to topple a single dictator.

Riaz Haq said...

Here are some excerpts from The Guardian Op Ed on Cameron's warning to Pakistan to raise tax revenues:

Corruption, tax dodging by rich individuals and domestic companies, and tax dodging by multinational businesses all result in a massive flow of "illicit capital" out of developing countries that exceeds the aid they receive from rich nations. Three policy solutions are needed to help reverse this trend and truly fulfil the spirit of Cameron's remarks.

First, revenue officials in developing countries need to be able to follow the money that their rich elites have stashed in tax havens. At present, countries have to conclude individual treaties with each country from which they want this kind of information, and can only do so if that country is willing. This is cumbersome and cannot serve the interests of low-income countries. The UK is one of over a dozen countries that recently ratified a multilateral convention that could provide the solution – but only if developing countries are supported to join, and if tax havens are compelled to participate. The G20 summit in France in November is the opportunity to make this happen.

Second, anti-corruption and tax justice campaigners – and indeed some revenue officials – want multinational companies to break down their financial reports on a country-by-country basis. This proposal is being considered right now by the European commission, and was raised by the chancellor, George Osborne, at a recent G20 summit.

But the devil will be in the detail. If companies have to declare tax payments by country, it will be much harder for corrupt officials to spirit the money away. But if other information such as profits and sales is also included in the breakdown, we could scrutinise the tax payments themselves, holding companies and governments to account for the tax dodging that multinational companies can get away with.

Third and finally, we need the global network of anti-tax avoidance laws to be fit for purpose. It's unfortunate that changes to the UK's "controlled foreign companies" rules in last month's budget will open the floodgates to tax avoidance by British companies overseas. This could cost developing countries £4bn in revenues, effectively wiping out the value of half the British aid budget. At the same time, developing countries keen to crack down on such avoidance are being forced to adopt international "transfer pricing" rules that make them leak like sieves.

It's within the power of the British government to equip developing countries like Pakistan with the information, the rules and the enforcement capacity they need to raise much more tax revenue.

Riaz Haq said...

Wikileaks' founder Julian Assange has told Times of India that rich Indians are stashing money in Swiss bank accounts:

Julian Assange, made a stunning disclosure, that there could be Indian names in the data that WikiLeaks would publish. In the course of the interview, Assange appealed to Indians to absolutely not lose hope that the names of those with secret Swiss accounts will come out at one point in the future. Hinting that Wikileaks might work with specialized agencies before releasing the Swiss bank data he pulled up the Indian government for not being aggressive like Germany in going after the list of Indian account holders. In fact he said India should be more aggressive because India seems like it is losing per capita more tax money than Germany

This is the first time Assange has spoken about Indian accounts in these Swiss banks, and comes at a time when the national debate over Swiss Bank accounts has sharpened.

Arnab Goswami: You have strong views on it. And I completely appreciate that you can't talk about it in detail. But let me ask you more generically, that is your heart, you would like to reveal the details...in your heart. I am not asking you when and under what circumstances, but having known about it, you would like to reveal details of how the system operates, wouldn't you?
Julian Assange: Well, we have various types of information about different banking operations in the world. Over time, we have revealed those. In fact, most of the legal attacks on us have been from banks. Banks in Scotland...banks in Dubai...banks in Iceland. We all received legal attacks from these banks. And we will continue publishing data on these banks as soon as we are able to do so.

Arnab Goswami: Have you encountered any Indian names? I am not asking you to tell me where, which banks...
Julian Assange: Yes there are Indian names in the data we have already published or going to publish. I can't remember specifically whether there are Indian names in the upcoming publication. But I have read Indian names. Similarly, in these private Swiss banking concerns, where you need at least a million dollars...which is a significant amount of money...Not an average Indian.

Arnab Goswami: And it is difficult to identify those names. Anything else you can tell us?
Julian Assange: I can't tell you anything more at this stage. As we go through the process of releasing data, as always we have to do extra research. And once we understand which media organizations are best placed to help us with that research, then we operate with them. But we are not at that stage yet that I know all the research that is going on.

Mayraj said...

Today I had a conversation with someone who told me he was in Karachi for 6 years.
He was born and raised in Canada and went there for a job with Barclays. He does seem to have parents who were from Pakistan, however. He worked there and was involved in other banking industry orgs and also helped an NGO out.
I asked him for his impressions about the local system and the present state of the country. He has just returned home to Canada a few weeks ago.
He told me the system worked well and the mayor was a good mayor. He said he thought he did a very good job.
He also said right now country is in a deep mess. People in power seem to just want to take what money they can out of the system. he said this happening at all levels!

Mayraj said...

I would like you to be cognizant of the fact that now in Pakistan, corruption is at a scale that boggles the mind - at least it should boggle the mind. We are talking no longer millions but BILLIONS. We are talking about Pakistan's external debt shooting up by ten billion dollars in a short span of 3 years with nothing to show for it. I suspect the borrowed dollars have been purchased with corruption billions and transferred abroad. In the next 2 years huge repayments are maturing to the IMF and other lenders. The oil price may shoot up. Our exports reduce and our water supplies may stunt our agriculture. I don't see how we will be able to cope.

Billions are 'spent' by the government and as much as 40-50% if not more is diverted for pay-offs. There is hardly any development or relief going on anywhere. debt service has gone through the roof, being the biggest item in the budget. Poverty is rising, employment growth is nonexistent. Spending on social services had collapsed as there is no fiscal space.

Corruption is a HUGE component in both out fiscal and current account deficits. It has made a huge increase in both our domestic and international debt. it can corrupted the moral fiber of the country, especially the bureaucracy. Now the younger generation is actually embracing corruption as a perfectly acceptable way of life, looking at the leadership, the tycoons and the senior government officers as role models. They are actually openly defending the corruption of their families and expressing their intention to indulge in the same.

Haseeb said...

At last some one has the guts to speak up hoestly instead of just praising a criminal just because they dont want to rock the boat !

http://www.youtube.com/watch?feature=player_embedded&v=Tki6rzjxgDQ#!

Riaz Haq said...

Here's an Op Ed by Prof Anatol Lieven published in the Guardian:

If Pakistan's chief justice, Iftikhar Chaudhry, manages to press his charges of corruption against the president, Asif Ali Zardari, he will bring down the existing Pakistani government. If he extends his anti-corruption campaign to the political elites as a whole, he will bring down the entire existing political system – and replace it, his critics say, with a dictatorship made up of an unelected (and equally corrupt) judiciary.
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The truth is that Pakistani politics revolves in large part around politicians' extraction of resources from the state by means of corruption, and their distribution to those politicians' followers through patronage. Radically changing this would mean gutting the existing Pakistani political system like a fish. Nor is it at all certain how popular the process would really be with most Pakistanis.

For while the greater part of this process of extraction and redistribution is illegal according to Pakistani law, how much of it is immoral in Pakistani culture is a much more complicated question. Every Pakistani politician accuses his rivals of corruption but, equally, the perception that he himself is "generous" and "honourable" to his own supporters is likely to be central to his own local prestige. If a public monument is ever erected to the Ideal Pakistani Politician, the motto "He dunks but he splashes", originally coined by Mayor Richard Daley of Chicago, should be inscribed on its pedestal.

And this is not just a matter of cynical politics. It also obeys a fundamental moral imperative of local culture to be loyal to one's followers and, above all, one's kinfolk. The politician who is really despised is the kleptocrat who both steals immoderately and does not share the proceeds. As a result, a good deal of the proceeds of corruption does get distributed through parts of society, thereby helping to maintain what until recently has been the surprising underlying stability of the Pakistani political system.

The military is widely seen as relatively immune to corruption, and when it comes to its own internal workings, this is largely true – though it usually ceases to be true when generals go into politics. However, it is vitally important to note that this is in large part because for many decades the military as a whole has acted as a kind of giant patronage network, extracting a huge share of Pakistan's state resources via the defence budget and other concessions, and spending them on itself. Because – to its credit – it has distributed the resulting benefits in an orderly if hierarchical way among its generals, officers, non-commissioned officers and even to a degree privates, it has managed to keep a lid on corruption within the military itself. However, a belief is growing among ordinary soldiers, not just that the generals' perks are immoderate but that in some cases their families are using their connections to make huge corrupt fortunes outside the military.

As for Zardari, it seems highly doubtful that he can hang on much longer. The chief justice is pursuing him with bulldog determination and the letter of the law is on his side. The military has been infuriated by what it believes are his attempts to ally with Washington against it. It does not want another military government, but it does want a civilian regime that is much more responsive to its wishes. And the opposition want him out before, not after, senate elections that might just enable him to cling to the presidency even if as expected his Pakistan People's party is defeated in general elections due by early 2013. Whether getting rid of Zardari will fundamentally change Pakistani politics, however, is a very different matter.


http://www.guardian.co.uk/commentisfree/2012/jan/19/pakistan-culture-honourable-corruption?newsfeed=true

Riaz Haq said...

Is India losing its mojo because of bad politics? asks BBC's Soutik Biswas. Here's an excerpt:

It's an obvious question to ask at a time when powerful - and populist - regional parties are again flexing their muscles at a fickle federal government, key economic reforms are seemingly stuck in the bog of messy coalition politics, and the government is struggling under an avalanche of corruption charges. Economic growth and investment have cooled and inflation remains high.

So is it surprising that The Economist magazine, in its latest issue, says the politics is "preventing India from fulfilling its vast economic potential"?

Or when Fareed Zakaria, editor-at-large with Time magazine, tells an audience in Delhi this week that India's politicians are "out of touch… they try to portray India as a victim, not the victor".

With uncharacteristic exaggeration, The Economist even invokes a return to the stifling days of the controlled economy.

"Lately, like a Bollywood villain who just refuses to die, the old India has made a terrifying reappearance," says the magazine. It blames a "nastily divisive political climate" for the crisis and believes that India requires "energetic, active leaders, plus politicians who are ready to compromise".
'Corrupt and corroded'

Both the magazine and the pundit are right and wrong.
“Start Quote

Reformers need to be patient; there are no shortcuts in India”

The quality of India's politicians, many argue, has declined drastically, as in many parts of the world. Most of them seem to be out of sync with modern day realities - expectations have fallen so ridiculously low that an iPad carrying politician is described by the media as a modern one!

Most are also seen as greedy, corrupt and disinterested in serious reform. The increasing number of politicians with criminal records and the brazen use of money to buy party tickets and bribe voters erodes India's ailing democratic process.

It is not a happy picture. "Today the Centre is corrupt and corroded," historian Ramachandra Guha wrote recently. "There are allegedly 'democratic' politicians who abuse their oath of office and work only to enrich themselves; as well as self-described 'revolutionaries' who seek to settle arguments by the point of the gun." Only serious electoral reform can ensure a better breed of politician.
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Public consensus is harder to come by in an awfully unequal society where the middle class and the rich root for further opening up of the economy, while the poor want the state to invest in health and education and check corruption. The elitist biases in public policy is made easier by a poorly-informed and often unlettered electorate with low expectations.

Many would argue that India never got any magic going, so there is no question of losing it.

Consensus is painfully slow in such a society, and sometimes only a crisis can provoke the government - and the people - to bite the bullet. Reformers need to be patient; there are no shortcuts in India.


http://www.bbc.co.uk/news/world-asia-india-17537615

Riaz Haq said...

Here are some excerpts from Raymond Baker's book "Capitalism's Achilles Heel" regarding Pakistan's venal politicians:

"While Benazir Bhutto hated the generals for executing her father, Nawaz Sharif early on figured out that they held the real power in Pakistan. His father had established a foundry in 1939 and, together with six brothers, had struggled for years only to see their business nationalized by Ali Bhutto’s regime in 1972. This sealed decades of enmity between the Bhuttos and the Sharifs. Following the military coup and General Zia’s assumption of power, the business—Ittefaq—was returned to family hands in 1980. Nawaz Sharif became a director and cultivated relations with senior military officers. This led to his appointment as finance minister of Punjab and then election as chief minister of this most populous province in 1985. During the 1980s and early 1990s, given Sharif ’s political control of Punjab and eventual prime ministership of the country, Ittefaq Industries grew from its original single foundry into 30 businesses producing steel, sugar, paper, and textiles, with combined revenues of $400 million, making it one of the biggest private conglomerates in the nation. As in many other countries, when you control the political realm, you can get anything you want in the economic realm."
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Like Bhutto, offshore companies have been linked to Sharif, three in the British Virgin Islands by the names of Nescoll, Nielson, and Shamrock and another in the Channel Islands known as Chandron Jersey Pvt. Ltd. Some of these entities allegedly were used to facilitate purchase of four rather grand flats on Park Lane in London, at various times occupied by Sharif family members. Reportedly, payment transfers were made to Banque Paribas en Suisse, which then instructed Sharif ’s offshore companies Nescoll and Nielson to purchase the four luxury suites.
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Upon taking office in 1988, Bhutto reportedly appointed 26,000 party hacks to state jobs, including positions in state-owned banks. An orgy of lending without proper collateral followed. Allegedly, Bhutto and Zardari “gave instructions for billions of rupees of unsecured government loans to be given to 50 large projects. The loans were sanctioned in the names of ‘front men’ but went to the ‘Bhutto-Zardari combine.’ ” Zardari suggested that such loans are “normal in the Third World to encourage industrialisation.” He used 421 million rupees (about £10 million) to acquire a major interest in three new sugar mills, all done through nominees acting on his behalf. In another deal he allegedly received a 40 million rupee kickback on a contract involving the Pakistan Steel Mill, handled by two of his cronies. Along the way Zardari acquired a succession of nicknames: Mr. 5 Percent, Mr. 10 Percent, Mr. 20 Percent, Mr. 30 Percent, and finally, in Bhutto’s second term when he was appointed “minister of investments,” Mr. 100 Percent.


http://books.google.com/books?id=Wkd0--M6p_oC&printsec=frontcover&dq=Capitalism%27s+Achilles+Heel&hl=en&sa=X&ei=R_2jT569HofViAKLzpzLAw&ved=0CDwQ6AEwAA#v=onepage&q=nawaz%20sharif&f=false

http://books.google.com/books?id=Wkd0--M6p_oC&printsec=frontcover&dq=Capitalism%27s+Achilles+Heel&hl=en&sa=X&ei=R_2jT569HofViAKLzpzLAw&ved=0CDwQ6AEwAA#v=onepage&q=zardari&f=false

Riaz Haq said...

Even though the Pakistan People’s Party (PPP) has denied that former prime minister Benazir Bhutto owned the valuable jewellery set currently in custody of Swiss authorities in the SGS case, the Geneva Federal Tribunal’s Court of Appeals verdict suggests that the legal owner of the expensive necklace was PPP Co-chairman Asif Zardari or the “death estate [sic] of late Benazir Bhutto” and has suggested repatriating the set to Pakistan, Pakistan Today has learnt.

The government of Pakistan received the translated version of the verdict on Nov 10, and Law Ministry officials have exchanged notes with the government’s attorney in Switzerland on the status of the case and the options available to deal with the issue.

Zardari’s spokesman Senator Farhatullah Babar told Pakistan Today that the former president’s counsel had already informed the Geneva tribunal that neither Benazir Bhutto nor any of her heirs had anything to do with the necklace. He said that there was no change in PPP’s stance after the ‎verdict.

TRANSLATION OF JUDGEMENT:

In a letter sent to the federal secretary of law, François Roger Micheli, the government’s lawyer from Python & Peter pleading the case in Geneva, told the Attorney General for Pakistan: “We hereby transmit you the judgment of the Federal Tribunal (“FT”) of 29.10.2014, which rejects the ultimate recourse filed by Bomer Finance Inc [the company representing Asif Zardari and Benazir Bhutto]. The FT followed our line of argument and confirmed the decision of the Court of Appeal of Geneva.”

“The tribunal also decided that Jens Schlegelmilch, the board member of Bomer Finance Inc. had acted as the attorney for both Asif Ali Zardari (AAZ) and Benazir Bhutto (BB) – a fact contradicted by PPP leadership.”

“The gist of the attached decision is: Bomer Finance Inc. has not proven that it is the legal owner of the jewellery set. The FT adds that Jens Schlegelmilch has not proven that he acted in a capacity as board member of Bomer Finance Inc. when negotiating and acquiring the jewellery set; he appears to have acted as the attorney for the BB-AAZ couple. The FT adds that its analysis would be the same, even if the balance of the purchase price of the jewellery set had been paid from the account of Bomer Finance Inc.”

“The FT suggests that the legal owner of the jewellery set is AAZ, or the death estate of BB. The task you had given us is done, and the objective has been reached. The next significant steps are the confiscation of the jewellery set, its realization and (assuming Pakistan is interested) the repatriation of the proceeds there from to Pakistan. Please advise if we are to make endeavours towards that ultimate objective,” the letter stated.

ANOTHER LETTER, FUTURE STRATEGY:

In another letter sent on Nov 25 by the government’s attorney, Micheli told the AGP as a first reply that the material particulars of the case at hand were such that there was no obvious legal answer, nor any reliable precedent, with respect to deadlines for taking action.

“However, and in general, it is obvious that every route becomes increasingly difficult to implement as time goes by. I have made a preliminary legal research, and spoken (off the record) this day with the prosecutor in charge of the matter. We have exchanged views. The ways forward we contemplated, are the following,” stated the letter.

“Confiscation in the context of the Swiss penal proceeding: In practical terms, this route implies that (i) the jewellery set is confiscated in Switzerland, and thereupon (ii) that it is sold at public auction upon instructions by the Geneva Prosecutor’s office (this is standard procedure), and thereafter (iii) that the proceeds of the realisation of the jewellery set are shared between Pakistan and the Swiss authorities. This route is legally conceivable,”

CASE NOT TIME BARRED:



http://www.pakistantoday.com.pk/2014/11/30/national/geneva-tribunal-verdict-suggests-repatriating-swiss-necklace-to-pakistan/

Riaz Haq said...

ISLAMABAD: An escape from a bad spell seven years ago gave Asif Ali Zardari access to the $60 million allegedly stashed in a Swiss bank, according to Pir Mohammad Ejaz, a spiritual mentor of the former president.

The pir, who remained by the side of Mr Zardari during his political ups and downs and even in his five-year stay in the presidency, told Dawn on Thursday outside an accountability court where Mr Zardari came on Thursday to face five references, including a money-laundering case.

“Zardari sahib got the money because of my meditation for which I spent a year in Madina in 2006,” he claimed.

Pir Ejaz removed the curtain from a mystery about when Mr Zardari got $60m and deposited it in a Swiss bank.

The former president could not draw the money for a long time because cases against him were pending in a Swiss court.

For the same money, Mr Zardari is facing a money-laundering case filed by the National Accountability Bureau. The NAB believes that it was the money Mr Zardari and other accused had acquired as commission for SGS Cotecna pre-shipment inspection.

The money was reportedly paid to Asif Zardari and other accused in Switzerland almost two decades ago.

“My meditation freed Mr Zardari from the bad spell he was under and in 2006 I called him from Madina to tell him that his case has been thrown into a blind well and he will soon get his money back,” he said.

During Thursday’s hearing, Pir Ejaz was seen standing outside the courtroom reciting verses from the Holy Quran.

“I have been protecting Mr Zardari from hardships since 2001, but when cases were being heard in a Swiss court I went to Madina for special meditation to save him.”

Pir Ejaz claimed that no evil can harm Mr Zardari now.

http://www.dawn.com/news/1079532