Why nothing will happen

Legal eye

The writer is a lawyer based in
Islamabad.

One always wishes to be wrong while making projections on the basis that we have completed our journey to becoming a predatory state and predatory society feeding off each other. The moment of excitement over the Panama Papers might turn out to be another damp squib for Pakistan.

We already know that offshore investments aren’t illegal, sending money outside Pakistan is neither prohibited nor illegal and having your kids make a life outside Pakistan is also not illegal. So what are some of the key issues raised by the Panama leaks?

One, can one justify one’s properties, assets and lifestyle in view of known and disclosed sources of income? Two, if money is sent abroad, has it been sent after paying taxes due on it in Pakistan and has it been sent through legal channels? Three, are foreign assets declared in income and wealth tax returns filed in Pakistan? Four, are public office holders willing to be held accountable and subjected to a higher standard of scrutiny, disclosure and accountability?

Everyone suddenly wants our rulers to bring back to Pakistan all the ‘looted’ money. So much of the moralistic anger going around these days springs from fantastic assumptions that no one attempts to clarify. Are we to assume that all money belonging to public office holders is looted or just the money stashed abroad? Do we have in mind any process to determine what is illegitimate and what isn’t or are we simply going to shame them through TV sermons into depositing everything they have in the treasury?

We are a country that ranks fairly high on corruption charts. Exceptions apart, not just the ruling elites but almost everyone that engages with the business of the state has a hand in the cookie jar, starting from lowly positions in government offices all the way to the top. This is no secret. It is the reality we are aware of and at peace with. It is more efficient to get a utility connection if you pay your lineman than try and call the minister. You can get a more desirable police report if you ‘work with’ the IO and SHO than use your pull with senior officers.

Whether it is service delivery, use of the state’s police powers, the justice system or even professions (lawyers, journalists etc) that wield power, there are simply no exceptions. How do you outrage a society by the possibility of part of its ruling elite having stolen from the people, when the middle class (that plays a vital role in defining acceptable standards of public morality and ethics) has bought into the system of payoffs and use of personal patronage and access to echelons of power to get things done on a daily basis, as well as to attain upward mobility?

What would the result be if we were to conduct a grand forensic audit to determine who within our middle and upper classes has assets and lifestyles commensurate with known sources of income? Businessmen who have delved into politics might still be able to fathom justifications about the origin of their riches. What about folks who have lived their entire lives on salaries and yet have opulent lifestyles and own properties that cannot be explained? Is it hard to do the math with them? Will they or their kin be outraged by Panama?

How do you outrage a society by the possibility of the prime minister or his kids having parked assets in tax-free havens or not paying a fair share of taxes where less than one million in a country of 200 million pay their taxes? The only folks paying complete share of their taxes here are the salaried classes and others subjected to the withholding tax regime. Everyone else is forced to pay indirect taxes on everyday use items. Which segment of our elite (or even middle class) has the moral high ground to point fingers at others for being tax cheats?

Forget tax structuring – the tainted gift of offshore havens. Look at the taxes paid by our most prominent leaders (including those overdosing on moral entitlement and righteousness). It is all published in a tax directory these days. Work out their declared income backward and then see if their lifestyles, houses, cars etc. match their declared income. If you aren’t generating income to pay taxes, who is bankrolling your lifestyle? ‘Gifts’ from children, wives, wealthy friends? So is stealing money and lying about it the problem, or does the problem erupt only if you park the booty abroad?

In Iceland, the prime minister had to resign over the perception of conflict of interest after his name featured in the Panama Papers. In the UK, the prime minister is under public pressure and has had to release his income and tax details because that public pays its taxes. Why don’t we hear the phrase ‘abuse of taxpayers’ money’ in our public narrative? Why did the tax amnesty scheme for traders announced by the PML-N turn out to be a flop? Why is there an across-the-board consensus amongst KP politicos against imposition of customs duty in Malakand?

Everyone who buys and sells land or property in Pakistan lies about its price. Why? Because no one wants to pay government taxes and no one has enough declared income (‘white money’ as we call it) to justify the purchase. We are not tax cheats. We are a nation that doesn’t believe in taxes or honestly disclosing our income or its source. It is just not a part of our public morality.

Panama has triggered no outcry about organised corruption within our governance structures. It has triggered no debate about our taxpayers being an endangered species or about the need for institutionalised accountability and scrutiny of income and assets of all public office holders, whether in Pakistan or abroad. No one is proposing measures to prevent public office holders from abusing state authority to promote personal interests, or to curb ‘benami’ transactions or require conflict of interest disclosures by public officials.

We are not a country where anyone is ever ‘shamed’ into resigning. To make NS quit over Panama, someone will need to establish through evidence the receipt by him of kickbacks that he then parked offshore. Someone will need to establish that he (and not his sons) owns assets or received income that he didn’t declare in his tax returns. If an old hand like our prime minister has been so sloppy, having learnt nothing from the mess the PPP’s top leadership got itself into in the 90s, then he deserves to be punished for stupidity if nothing else.

Judicial commissions are a flawed idea (for various reasons, but that’s for another day). Even if by some stroke of luck a super commission with forensic capability can pin NS down, the prime beneficiary will not be Imran Khan but Shahbaz Sharif. SS never wanted to leave Pakistan even in 2000. He was eager to come back. He has no offshore accounts it seems. His sons are here and running profitable businesses in our midst. He loves Jalib. And his wife has spoken against the Panama shame. He fits the bill for the patriotic on-shore politico post-Panama.

The Panama leaks could be an opportunity to acknowledge our contradictions as a state and society, the hypocrisy that explains the gap between our private lives and public positions, and the reasons that make our democracy ‘dirty’ and hostage to Praetorians. Panama could be the trigger to devise institutional measures of disclosure and accountability, create effective checks to prevent the sordid transfer of public wealth to private hands and lower the barrier to entry into politics for ordinary folks that money has become. But this won’t happen if we see Panama just as a means to throw NS out before 2018 and nothing else.

Email: sattar@post.harvard.edu