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Corruption retarding national growth and prosperity
June 29, 2012
Corruption is eating into the vitals of our society. It has assumed mammoth proportions and has seeped into every walk of life. It has not only tarnished the nation’s image, but also badly affected new investments and, in turn, the establishment of industrial ventures, creation of job opportunities and the country’s progress and prosperity. An indication of the prevalence of corruption can be imagined from the recent statement of the Chairman National Accountability Bureau (NAB) Admiral Faseih Bukhari that Pakistan loses five billion rupees a day in corruption in only three sectors of the economy. He said the oil mafia, agriculture cartel and tax evasion/theft contribute to a daily loss of Rs. 5 billion, which means Rs. 150 billion in one month and Rs. 1,800 billion a year.
The NAB chairman’s disclosure gives credence to the Transparency International Pakistan (TIP) report that Pakistan has lost over Rs. 8,500 billion (Rs. 8.5 trillion) in corruption, tax-evasion and bad governance during the last four years. Additionally, Pakistan has lost, according to the State Bank of Pakistan, almost Rs. 3 billion a day, Rs. 90 billion a month and over Rs. 1,050 billion a year on account of war on terror during this period. Corruption is one of the prime causes for the acute shortage of energy, which has slowed down the economic development in the country. A study by WAPDA has revealed that Pakistan has a total potential of producing 100,000 MW of electricity through hydropower, which is one of the most economical modes of electricity production. But, this huge potential remains untapped because it does not yield commissions and kickbacks that come with the commissioning of thermal and rental power systems.
According to the study, against an identified potential of producing 59,208 MW from hydropower, the tapped capacity is merely 6,516 MW while under process is 1,557 MW and under study is 35,000 MW. A classic case of corrup0tion and malpractice in the Pakistan Railways was taken-up by the National Assembly’s Public Accounts Committee, on May 23, 2012. It pertained to the leasing out of 19 schools of Pakistan Railways to a private School System, owned by a former Foreign Minister, on a nominal lease of Rs. 5,000 per school in the year 2002. The mafia do not spare the cooperative societies; rather these often become the prime target for their corruption. While corruption in the National Assembly Employees Cooperative Society was still fresh in one’s mind, the Lahore District Officer Cooperatives disclosed, on May 24, 2012 embezzlement of billions of rupees in transactions involving land owned by Military Accounts Cooperative Housing Society.
The real impact of corruption on the country’s economy, TIP believes, is far more that what was generally estimated or what was formally uncovered. The TIP pointed out that the volume of corruption stood at Rs. 390 billion in 2008, while it increased to Rs. 450 billion in 2009, to Rs. 825 billion in 2010 and R. 1,100 billion in 2011. The Finance Minister himself admitted that Rs. 500 billion was lost in corruption in FBR, while Auditor General of Pakistan pointed out Rs. 315 billion corruption in 2010 and Public Accounts Committee recovered Rs. 115 billion in 30 months till 2011. In addition, close to Rs. 2 trillion have been doled out by the government to grossly mismanaged corporations and state-owned enterprises. Out of this, over Rs. 1.1 trillion have gone to electricity companies. Despite raising electricity tariff by 150 percent, the government gave the power sector subsidies to the tune of Rs. 1,122 billion, but all the money seems to have gone down the drain.
In order to check corruption, the NAB chairman stated there was dire need to depoliticize the civilian bureaucracy so that government employees could perform their duties without any fear or favour. But, the authorities often turned a blind eye to reports of corruption and irregularities committed by their chums or blue-eyed boys. For instance, despite having received an adverse report from the Prime Minister’s Inspection Commission about Evacuee Trust Property Board (ETPB) two years ago, the prime minister has yet to take any action. Among the allegations against ETPB include corruption and kickbacks in development and other property-related deals for allotments, leases, transfer as well as exchanges. If any bureaucrat dares to challenge or object to non-transparent deals involving ETPB’s property, that person can be made an example for others for having taken a bold stand. Here one may quote the case of the Secretary Ministry of National Harmony, Javaid Awan, who has been unceremoniously removed from his post and made an OSD for the sin of having moved a reference in the Secretaries’ Committee against irregularities in ETPB property deals.
Javaid had earned ETPB Chairman Hashmi’s ire after he stopped the controversial deals. He was forced out of the ETPB office; the government lawyers were directed neither to appear before the court Javaid headed as appellant authority against complaints pertaining to ETPB nor grant him any land record. Jawaid has become the eighth secretary kicked out during the four-year period since Hashmi assumed the office of ETPB Chairman.
The lukewarm attitude of the authorities to root out the evil of corruption impelled Peshawar High Court (PHC) Chief Justice, Dost Muhammad Khan to observe, on May 24, 2012 that the government was not interested in curbing corruption. “Had the government been interested in ending corruption, it would have formulated a comprehensive policy for ending corruption from the State departments,” stated PHC Chief Justice while hearing a writ petition. Currently, at around 60 per cent of GDP, the underground economy in Pakistan has acquired enormous proportions, inflicting heavy losses to trade, industry, citizens and the State, while it deprived the nation of badly needed revenues in hundreds of billions rupees every year.
The government is impelled to meet its growing expenditure by borrowing, new taxation measures and deficit financing which, in turn, leads to inflation, price hike and poverty. But, the government could easily meet its financial needs without resort to borrowing, imposing new taxes or deficit financing if it displays the will and determination to curb corruption, smuggling, piracy, electricity and tax theft instead of over-burdening the already tax-paying segment of the population.
Alauddin Masood is an Islamabad-based freelance columnist.
E-mail: alauddinmasood@gmail.com
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