Wednesday, March 31, 2010

Judges Jihad Against Corruption in Pakistan

Led by Chief Justice Iftikhar Chaudhry, the judges of Pakistan Supreme Court have overturned former President Musharraf's amnesty order for 8000 top politicians, including current President Asif Ali Zardari, and declared jihad against corruption at the highest levels of government.

Pakistani judiciary's battle against rampant corruption has recently escalated with the jailing of a top serving police official at the Federal Investigation Agency (FIA), and the ultimatum to the anti-corruption chief of the National Accountability Bureau (NAB) to reopen domestic and international corruption cases against the beneficiaries of the NRO amnesty, or be prepared to go to jail.

Some critics of the Supreme Court actions see the top court's recent orders against top officials as abuse of power by Mr. Iftikhar Chaudhry, the head of the unelected and independent judiciary in Pakistan. They accuse the Chaudhry court of engaging in unwarranted judicial activism designed to usurp the powers of the elected legislature and executive branches.

Unfortunately, Pakistan continues to have the dubious distinction of being among the 50 most corrupt countries on a list of 180 nations ranked by Transparency International in 2009. Under the current PPP government, Pakistan has slipped 5 places to being 42nd most corrupt from 47th last year. By contrast, India is ranked much better as the 84th most corrupt country.

While I have been critical of some of Justice Chaudhry's behavior in the past, I have now concluded that judicial activism to fight high-level corruption is necessary, at least in the near term. However, I do expect that there will be both positive and negative consequences of the judiciary-led war on corruption in Pakistan.

The most likely upside to come from the court actions is that the politicians and bureaucrats will be forced to think twice before they demand to be paid off in exchange for illegal favors. The activist top court judges will certainly help reduce the current high levels of corruption among the top leaders, and help set a better tone for their underlings in positions of power.

The negative consequences of the court actions include a gross imbalance of power and a continuing institutional confrontation between the judicial and executive branches of government. An extended struggle may prove detrimental to better governance, and possibly open the way for another military intervention in the country.

Lt us hope that good sense will prevail to ensure that long-term positives will significantly outweigh the short-term negative consequences of the powerful judges' war on deep-rooted and highly corrosive corruption in Pakistan.

Related Links:

Haq's Musings

Justice Chaudhry's Address to New York Bar

Incompetence and Corruption in Pakistan

Zardari Corruption Probe

NRO Amnesty Order Overturned

Transparency International Rankings 2009


Anonymous said...

Iftikhar Chaudhary is horrendously politicized and compromised. Little hatchet-man in robes for Nawaz Sharif.

I have now concluded that judicial activism to fight high-level corruption is necessary, at least in the near term.

Bad shortcut. This guy makes a mockery of the concept of justice. Just another wannabe power center. He's trying to act like Amitabh Bachchan in Sarkar.

Riaz Haq said...

anon: "Bad shortcut. This guy makes a mockery of the concept of justice. Just another wannabe power center. He's trying to act like Amitabh Bachchan in Sarkar."

I think corruption in Pakistan is a huge problem that is undermining the entire nation. In my view, corruption is a close second to incompetence in terms of its devastating impact on Pakistani politics, security, economy, sports, etc etc.

Today, Pakistan is like "Tombstone", a town in a western flick that needs a tough sheriff to clean it up. If that sheriff happens to be a judge, so be it.

Mayraj said...

How many of these cases are against PML-N. These people profitted from power also.

Riaz Haq said...

Mayraj: "How many of these cases are against PML-N. These people profitted from power also."

The cases against all corrupt politician and officials should be pursued, regardless of party affiliation.

But I think the 8000 NRO beneficiaries are a good first target to start the process. Justice Chaudhry has to move carefully, deliberately and fairly to begin the process of accountability long overdue in Pakistan. If he takes on all of the corrupt politicians and officials at once, his chances of success would dramatically diminish.

Mayraj said...

These cases can go on forever. That can also diminsh the effect.
If you will notice in US, only FBI and federal govt goes after corruption, state attorney generals look away as a norm. That is why here, the pond remains fetid.

Riaz Haq said...

Mayraj: "These cases can go on forever. That can also diminsh the effect.
If you will notice in US, only FBI and federal govt goes after corruption, state attorney generals look away as a norm. That is why here, the pond remains fetid."

I agree. The wheels of justice grind slowly. But, in spite of its lethargic pace, the US pond is not nearly as fetid as Pakistan's. Nor is India's, which ranks as 84th worst offender versus Pakistan as the 42nd most corrupt on TI surveys. Any improvement in transparency in Pakistan should help make it a better nation, bringing more benefit to the people.

Mayraj said...

I do not know about India's being so much better.
India has massive tax evasion. It rivals Pakistan. That is a sign of corruption.
Tranparency ratings are not reliable. US corruption is underreported. Transparency does nt count legal corrupiton-aka campaign finance. Pay to play is common in municpal finance, even US Govt officials have admitted it.
"In short, don't conservatives realize that China is making hay in the developing world through a combination of throwing its wealth around and arguing that American democracy is little more than a veneer for plutocracy?"
A flawed American political model aids China
Some in Indonesia praise, seek to replicate China's fight against United States

Riaz Haq said...

Mayraj: "I do not know about India's being so much better.
India has massive tax evasion. It rivals Pakistan. That is a sign of corruption.
Tranparency ratings are not reliable. US corruption is underreported. ...."

Americans, and particularly Indians, are certainly not angels, but I do think Pakistan has a much bigger corruption problem at the highest levels than either US or India.

The leaders set the tone, and Barack Obama and Manmohan Singh are angels compared with Zardari who was actually convicted in a money laundering case by Swiss Court. The conviction was under appeal when the NRO interrupted the process.

Anonymous said...

Americans, and particularly Indians, are certainly not angels, but I do think Pakistan has a much bigger corruption problem at the highest levels than either US or India.

It's a feudal structure masquerading as "democracy". Things will change when real land reform happens.

Corruption is an effect, not a cause. Treat the symptoms and you'll get more of the same. The cure is sweeping land reform. The chances of getting that through are as good as an ice cube's in hell. The feudals and the army are _both_ complicit.

Remember that the first thing the Taliban did was to drive the feudals out of their homes and divvy up their property. There's obviously a reason for that.

Sher said...

A very timely article.

Why are there any negative consequences of punishing corrupt leaders? If all of the Pakistani current leaders are found to be corrupt and jailed, the new ones should take their place. These new ones are hopefully not from the rich families and therefore not so corrupt.

What are NAB's powers? Do they act like the Attorney Generals work in US? Are there separate NABs for provinces?

Riaz Haq said...


I think it's a big positive if the CJ's extraordinary moves can curb corruption to a more manageable level.

Also, the latest agreement on constitutional amendments stripping many of Zardari's dictatorial powers is a good thing.

The long-term downside of an overly powerful unelected CJ is that the system of checks and balances falls apart, threatening the very foundations of democracy.

NAB is a federal function.

Riaz Haq said...

Pakistan's Attorney General Anwar Mansoor has resigned in a row with the country's law ministry, according to the BBC:

He said the government was not co-operating in the process of reopening corruption cases against President Asif Ali Zardari and other officials.

The Supreme Court recently ruled that an amnesty afforded to hundreds of politicians and officials was illegal.

It said proceedings that were stopped when the amnesty came into force more than two years ago must be re-started.


Anwar Mansoor had been voicing his frustrations with the government for days.

He said the law ministry had refused to provide documents and information he needed to get a money-laundering case against President Zardari reopened.

It was always a concern that with so many of those under investigation holding positions of power, trying them all would be a difficult process.

Mr Zardari, who is accused of having taken millions of dollars in kickbacks during the time his late wife, Benazir Bhutto, was prime minister, still has presidential immunity from prosecution.

But the Supreme Court insists corruption investigations into his financial affairs must continue.

It is undoubtedly putting pressure on an already strained relationship between Pakistan's president and its judiciary.

The resignation of the attorney general puts that relationship under the spotlight even more.

Riaz Haq said...

Here's BBC commentary by Soutik Biswas on India's "rights revolution":

Ensuring the basics in life remains the biggest challenge for India, six decades after independence.

Take food. Some 43% of Indian children younger than five are underweight - far above the global average of 25% or sub-Saharan Africa's 28%. India is a lowly 65th among 84 countries in the Global Hunger Index. Half of the world's hungry people live in India.

So the proposed right to food, entitling a poor family to 25kg of rice or wheat at three rupees (seven cents) a kilogram is good news. The bad news is that identifying the deserving poor is a challenge - there are four different government estimates of the very poor or below poverty line (BPL) people floating around. States may inflate numbers of beneficiaries to corner more federal benefits. Then there is the notoriously leaky public distribution system, from where food is often siphoned off by a triad of low-level bureaucrats, shop owners and middlemen.

Nobody can deny that the right to education - every child aged 6-14 can demand free schooling - is critical: an estimated eight million children in that age group do not attend school in India. India's 61% literacy rate lags behind Kenya's 85%. But critics point to a lack of teachers - India would need more than a million teachers just to implement the right - and say there are simply not enough schools to cope with the increased demand.

Rights don't work miracles. But activists say they are an urgent social intervention to empower the poor in a highly iniquitous society, where it is difficult for the poor to access officials to air their grievances and secure their entitlements. "In a hierarchical society, rights-based movements are a way of moving towards equality," says leading political scientist Mahesh Rangarajan. Also, they put pressure on the state to deliver - the right to information, despite glitches, is making government more accountable.

Studies show that sensitive political and bureaucratic leadership combined with grassroots awareness and an engaged local media can translate rights into reality and improve the lives of the poor. Activists point out that money is not a problem - the economy is doing well, revenues are buoyant, federal health and education outlays have been increased. The government has pledged more than $5bn to send 10 million poor children to school.

The cynicism over rights mainly comes from India's burgeoning educated upper middle class. It is mostly not engaged with public institutions at all - its members rarely serve in the lower ranks of the armed forces, teach in state schools or work for the government. Yes, there are valid concerns about whether the state has the capacity to deliver on rights. Yes, the Indian state continues to focus on maintaining law and order and collecting revenue. Delivering services is not its strength. Rights could actually help it move towards a functioning welfare state. I would like to hear stories from you - and people you may know - who are reaping the benefits of the rights revolution.

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's a New York Times quoting Riyaz Hussain Naqvi, a retired government official who worked in tax collection for 38 years, as saying, “This is a system of the elite, by the elite and for the elite. It is a skewed system in which the poor man subsidizes the rich man.”

The problem starts at the top. The average worth of Pakistani members of Parliament is $900,000, with its richest member topping $37 million, according to a December study by the Pakistan Institute of Legislative Development and Transparency in Islamabad.

While Pakistan’s income from taxes last year was the lowest in the country’s history, according to Zafar ul-Majeed, a senior official in the Federal Board of Revenue, the assets of current members of Parliament nearly doubled from those of members of the previous Parliament, the institute study found.

The country’s top opposition leader, Nawaz Sharif, reported that he paid no personal income tax for three years ending in 2007 in public documents he filed with Pakistan’s election commission. A spokesman for Mr. Sharif, an industrialist who is widely believed to be a millionaire, said he had been in exile and had turned over positions in his companies to relatives.

A month of requests for similar documents for Pakistan’s president and prime minister went unanswered by the commission; representatives for the men said they did not have the figures.

“Taxes are the Achilles’ heel of Pakistani politicians,” said Jahangir Tareen, a businessman and member of Parliament who is trying to put taxes on the public agenda. He paid $225,534 in income tax in 2009, a figure he made public in Parliament last month. “If you don’t have income, fine, but then don’t go and get into a Land Cruiser.”

The rules say that anyone who earns more than $3,488 a year must pay income tax, but few do. Akbar Zaidi, a Karachi-based political economist with the Carnegie Endowment, estimates that as many as 10 million Pakistanis should be paying income tax, far more than the 2.5 million who are registered.

Out of more than 170 million Pakistanis, fewer than 2 percent pay income tax, making Pakistan’s revenue from taxes among the lowest in the world, a notch below Sierra Leone’s as a ratio of tax to gross domestic product.

Riaz Haq said...

The Afghan transit trade (ATT) through Pakistan has long been exploited as a way to smuggle goods into Pakistan without paying import duties. Now the Supremen Court is looking into the dusappearance in Pakistan of containers addressed to Afghanistan, accordin to The News:

ISLAMABAD: The Federal Board of Revenue (FBR) chairman Salman Siddique submitted in the Supreme Court on Thursday a list of 58 officials who held positions from January 01, 2007 to December24, 2010, when the national exchequer suffered a whooping loss of Rs37 billion because of pilferage of containers which entered the Pakistani territory under Afghan Transit Trade (ATT).

The list submitted with the Registrar office through CBR’s counsel Raja Muhammad Irshad in compliance with the Supreme Court orders includes the names of former chairpersons of CBR/FBR, members of Customs, Customs Collectors Karachi Port and Port of Qasim, Collectors of Quetta and Peshawar, secretaries commerce and finance, Director General Customs Intelligence and Investigation and the relevant officers of NLC who held the charge during that period.

The report contains the names of four former Major Generals of the National Logistics Cell (NLC) and three former chiefs of FBR. According to FBR counsel Raja Muhammad Irshad, the list contains the names of former Finance Secretary, former FBR chiefs Abdullah Yousuf, Ahmed Waqar, Sohail Ahmed and member Customs Muneer Qureshi. He said the names of six former secretaries, three former FBR chairman, three former heads of NLC and 44 officials of Customs are mentioned in the 58 members list.

Federal Tax Ombudsman (FTO) Dr Shoaib Suddle has already submitted a comprehensive report over the matter in the Supreme Court testifying that a huge number of containers containing have been pilfered inside the country without crossing the border causing enormous loss to the national exchequer to the tune of Rs19-37 billion.

He pointed out that the loss caused at the hands of Customs Department during the past almost four years is only a tip of the iceberg.

The report said strict action is required against all the concerned officials of the Customs and other departments, who held charge during that period. The court thereupon directed the FBR chairman to furnish a list of these officials. The court has directed all these people to file their reply on the report of FTO through FBR by January 27.

Riaz Haq said...

Indian Chief Justice Kapadia warns jusges not to exceed powers granted by the Indian constitution, reports NewsOne:

New Delhi, April 16 (IANS) The judiciary should not try to act as a super legislature, Chief Justice of India S.H. Kapadia said Saturday. He also asked the political leadership to resist from giving protection to corrupt judges.

Cautioning against internal interference from high-ranking judges which, if resisted, could lead to lower-ranking judges being transferred or being denied promotions, he said ‘similarly political protection should not be given to corrupt judges’.

The chief justice said judges should resist the temptation of post-retirement assignments. ‘A judge must not accept patronage through which he acquires office, preferential treatment or pre-retirement assignments. These can give rise to corruption.’

He advised judges to impose upon themselves certain ‘restrictions’ and remain ‘a little aloof and isolated’ from people in order to erase the suspicion that they were susceptible to undue influence in the discharge of duties.

He told judges to eschew contact with lawyers, individuals or political parties, their leaders or ministers unless it was on purely social occasions. A judge’s obligation must start and end with his analysis of law, not just personal beliefs or preferences.

He asked the courts to desist from the tendency of substituting decisions of legislative bodies with their own socio-economic beliefs.

‘We must refuse to sit as super legislatures to weigh the wisdom of the legislation,’ Chief Justice Kapadia said, delivering the fifth M.C. Setalvad Memorial Lecture on the ‘Canons of Judicial Ethics’ here.

‘In many PILs (public interest litigations), the courts freely decree rule of conduct for the government and public authorities which are akin to legislation. Such exercises have little judicial function in them,’ the chief justice said.

Disagreeing with the rationale that the judiciary was encroaching upon the legislative domain because the executive (government) had failed to discharge its responsibilities, Justice Kapadia said that ‘the courts should be circumspect in understanding the thin line between law and governance’.

The chief justice said a balance had to be struck between judicial independence and the accountability of judges. He said the challenge before the judiciary was how to respond to unreasonable criticism of courts.

The chief justice said that there was a need for striking a right balance between the judicial accountability and principle of judicial independence.

He said the challenge was ‘how does one achieve the right balance between autonomy in decision making and independence from external forces on the one hand and accountability to the community on the other hand?’

The habit of thinking impersonally, without regard for the worldly advantages or disadvantages of an opinion or an action was ethical thinking, he said.

‘This is the prerequisite of judicial thinking. The man who is only interested in himself is not admissible (to ethical thinking),’ said the chief justice.

The chief justice in his lecture dealt with a wide range of subjects relating to Canons of Judicial Ethics that included subject like Judicial ethics: From just words to deeds, Structuring of judgments, Accountability and judicial independence in the context of judicial activism and Value-based judicial accountability and independence.

The lecture was organised by the Bar Association of India in the memory of Setalvad, who was the first attorney general of India.

Delhi High Court Chief Justice Dipak Misra earlier said that the canons of judicial ethics should include both the judges and the advocates. He said that there should be strict adherence to integrity both in public and private life.

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.
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.

Riaz Haq said...

Here's an Associated Press report on Pakistan's assertive judiciary challenging the military and civilian leadership:

....Some believe the court’s actions are part of a necessary, if messy, rebalancing in a country that has long been dominated by the army or seen chaotic periods of rule by corrupt politicians. Others view the court as just another unaccountable institution undermining the elected government.
The army has been the principal point of contact for the U.S. in the decade since it resuscitated ties with Pakistan to help with the Afghan war. While the army remains the strongest Pakistani institution, recent events indicate it has ceded some of that power to the Supreme Court and the country’s civilian leaders.
The Supreme Court’s activism was on full display Monday.

The court charged Pakistan’s prime minister with contempt for refusing to reopen an old corruption case against the president. Later, it ordered two military intelligence agencies to explain why they held seven suspected militants in allegedly harsh conditions for 18 months without charges.

Some government supporters have accused the court of acting on the army’s behalf to topple the country’s civilian leaders, especially in a case probing whether the government sent a memo to Washington last year asking for help in stopping a supposed military coup.

But no evidence has surfaced to support that allegation, and the court’s moves against the military seem to conflict with the theory. The judges have also taken up a case pending for 15 years in which the army’s powerful Inter-Services Intelligence agency, or ISI, is accused of funneling money to political parties to influence national elections.
The court’s actions against the army are a significant turnaround. For much of Pakistan’s nearly 65-year history, the court has been pliant to the army’s demands and validated three coups carried out by the generals.
The Pakistani media have largely applauded the court’s activism against the army, which has also had its power checked by a more active media and the demands of a bloody war against a domestic Taliban insurgency.
“I think the Supreme Court is going too far,” said Pakistani political analyst Hasan-Askari Rizvi. “In the past, it was the army that would remove the civilian government, and now it’s the Supreme Court, another unelected institution trying to overwhelm elected leadership.”

Supreme Court justices are appointed by the president based on recommendations from a judicial commission working in conjunction with parliament. The judges can serve until the age of 65 and can be removed only by a judicial council.

The cases have distracted the government from dealing with pressing issues facing the country, including an ailing economy and its battle against the Pakistani Taliban.

Moeed Yusuf, an expert on Pakistan at the United States Institute of Peace, said the jockeying for power between the army, Supreme Court and civilian government was expected given the shifting political landscape and could be beneficial to the country in the long run.

“No country has managed to bypass several phases of such recalibration before they have arrived at a consensual, democratic and accountable system where institutions finally are able to synergize rather than compete endlessly,” Yusuf wrote in a column in Dawn.
“No single group will totally dominate the system,” said Rizvi. “That will slow down decision making further in Pakistan because nobody can take full responsibility for making a decision.”

Riaz Haq said...

Post-Panama case Pakistan
Dr Ikramul Haq, Huzaima Bukhari August 27, 2017 Leave a comment

The institutional structure of economy is designed to generate rents for the elite at the expense of the middle classes and the poor. So what is at stake?

The hidden wealth of some of the world’s most prominent leaders, politicians and celebrities has been revealed by an unprecedented leak of millions of documents that show the myriad ways in which the rich can exploit secretive offshore tax regimes — The Panama Papers: how the world’s rich and famous hide their money offshore [The Guardians, April 3, 2016]
Through the report titled, Panama Papers: Politicians, Criminal & Rogue Industry That Hide Their Cash, some of the crooks of the world — drug dealers, mafias, corrupt politicians and tax evaders — have been exposed. Pakistanis who are part of this undesirable club are unveiled through a year-long investigation project by journalist Umar Cheema in his write-up, Pak politicians, businessmen own companies abroad [The News, April 4, 2016].
Post-Panama case Pakistan is emerging as a dangerous place where the government is openly protecting and patronising the convicted and accused. There is no will to end state-sponsorship of organised crimes. Notorious laws — sections 5 and 9 of the Protection of Economic Reforms Act, 1992 and section 111(4) of the Income Tax Ordinance, 2001 — are still protecting dirty money, financing of terrorism and encouraging tax evasion. In the presence of such laws, the judiciary has punished the three-time elected prime minister — an unprecedented move that can be a starting point to end mafia-like rule in Pakistan as happened in Colombia after years of power of dirty money muzzling institutions or eliminating those who were not purchasable.


How can we eliminate corruption and tax evasion in Pakistan in the presence of permanent money-laundering and tax amnesty scheme in the form of section 111(4) of the Income Tax Ordinance, 2001 that facilitates the whitening of dirty money and tax evaded funds. It ensures that for money brought into Pakistan through normal banking channels no question would be asked by tax officials or FIA. Through this section, criminals and tax evaders get their undeclared money whitened by paying just an extra 3 to 4 per cent to any money exchange dealer to get remittances fixed in their names.
It is thus clear, brilliantly explained by Dr. Akmal Hussain in Restructuring for economic democracy, that “the institutional structure of Pakistan’s economy is designed to generate rents for the elite at the expense of the middle classes and the poor.” It is this structural characteristic of the economy and not just bribery that prevents sustained high economic growth and equity in Pakistan. Unless we change this structure of economy, the morbid story of corruption and tax evasion will continue. In the presence of these maladies, no decision of Supreme Court can help Pakistan progress and become an egalitarian state.