Recently, the International Consortium for Investigative Journalists (ICIJ) published an expose on “a shadow financial system that benefits the world’s most rich and powerful” in the form of Pandora Papers. Names of around 700 individuals from Pakistan are on the unenviable list.

According to the data shared so far, politicians holding key positions in the government, retired personnel of the armed forces and their families, some media moguls and big businesses may have benefited from the system.

If the history of accountability in Pakistan is any indicator, the dust raised by the Pandora Papers will settle down in a while. While Pandora Papers may have sent shockwaves in other countries, a typical response in Pakistan is accompanied with a sneer, “this will not make any difference.” The cynicism, disillusionment, indifference and apathy at the heart of the Pakistani response are not without reason.

In hindsight, Panama Papers made a big bang, encouraged the ordinary people (a la Ustad Mangu of the Naya Qanoon of Saadat Hasan Manto) to dream about a corruption-free Pakistan, and generated hopes of a better regulatory environment. A sobering lesson of the episode was that the change was not around the corner.

The findings of Panama Papers investigations were manipulated to destabilise the elected government and put the then prime minister behind bars although his name did not appear in the Panama Papers. Barring a few exceptions, all those implicated in the Panama Papers scandal, remained unscathed. Accountability widely perceived as selective, as in the case of Panama Paper, inspires little confidence that the outcome of the Pandora Papers investigation will be any different.

Why cannot such monumental events shake the country out of complacency? A culture of impunity, individual-specific, selective accountability and unanswered questions regarding the quality of the judicial system and law enforcement explain why there is little hope that cases of massive financial wrongdoings would be brought to a desirable end in accordance with the law of the land.

Extending the tenure of the NAB chairman and limiting the scope of NAB inestigations to political big guns while barring it from doing the “dirty work” of dealing with smaller culprits through a presidential ordinance is an example of the government’s contempt for due process and democratic norms.

Offshore companies are formed for all types of legitimate and illegitimate purposes. Setting up an offshore company is not an offence if the company is not involved in any illegal activity. According to the FATF, legitimate uses of offshore companies include managing business finance; facilitating mergers and acquisitions; and tax planning.

Under Pakistani laws, a failure to declare an offshore company as an asset in one’s tax returns entails legal action even when it is engaged in legal activities. Other legitimate uses of offshore companies are for the individuals who live in countries with instable politics or where law and order situation has degraded to frequent cases of kidnapping and extortion.

The ease of doing business through offshore companies is yet another legitimate use of offshore companies. The illegitimate uses of offshore companies include funds transferred by terrorist organisations and other organised crimes.

The Pandora Papers publication is a scathing indictment of the global financial system. The fact that a large number of countries, such as Panama, the Cayman Islands, the British Virgin Islands, Bermuda, Isle of Man, Macau, Cook Islands are still allowed to function as tax havens smacks of double standards practiced by the international financial system.

If only the global powers had shown half the eagerness encountering traffic of ill-gotten wealth they have shown in countering terrorism, the world would have been a much better place. The global financial system colludes with the powerful and wealthy around the world and facilitates the transfer of the resources of the poor countries to the rich ones (large swathes of London property owned by Pakistanis is a case in point), and directly contributes to poverty, disease and destruction.

Jordan’s King Abdullah has come under fire for amassing and stashing away 70 million pounds overseas. Jordan is one of the poorest countries in the Gulf region and a significant recipient of aid.

Offshore companies frequently serve as tax evasion vehicles. However, the fact that offshore financial centres impose little or no corporate tax may only be a slight advantage for most Pakistanis. The real challenge for the Pakistanis is not to avoid the tax authorities because the tax collection system is fraught with loopholes, and holding benami assets is not uncommon.

If people no longer trust the state institutions, it is a recipe for disaster. The failure to take action against the culprits across-the-board will further erode the state’s writ and spur corrupt practices.

On the face of it, the real lure for Pakistanis using offshore companies is to siphon off the wealth that is accumulated illegitimately. The bags of currency notes allegedly found in the possession of a former Balochistan finance secretary may only be the tip of the iceberg.

So the offshore companies may well be tax havens. But as regards most Pakistanis holding offshore accounts, the actual job done by the offshore companies is to provide a safe place to park the looted wealth. It would be a gross understatement to say that offshore companies are tax havens. They are much more than that.

Pandora Papers also highlight that the idea of public service at the higher levels of state institutions is radically different from the perception at the lower rungs of the state machinery. Though the difference between the upper and lower carders is quite pronounced with respect to in-service emoluments and the retirement benefits, a far more consequential difference exists with respect to the “opportunities” to settle one’s families overseas during the service and use the connections to get them foreign citizenship. One can then say goodbye to the nation after retirement and visit it only to make public speeches highlighting the importance of patriotism.

Given that a vast majority of public sector employees barely make ends meet after their retirement, how sustainable is the model that favours a chosen few at the cost of the majority? Contrary to loud sermons about patriotism, such conduct is a tacit admission that for the public servive elite Pakistan is good only as long as it provides sufficient means to live a comfortable life in the West post-retirement.

Damning reports like Panama and Pandora Papers should have opened the government’s eyes to the urgent need to overhaul the accountability system and bring corrupt elements to the book. The present regime seem more concerned however about managing the public opinion. The government’s fixation with regulating free speech is the loudest indicator that the government has largely failed to deliver on its election promises regarding a transparent government (Pakistan has slid several places on the transparency ladder since 2018), better economic conditions through job creation and reduction in inequality through providing affordable housing to the most vulnerable.

Worse still, the government is least inclined to tolerate criticism. This government has the distinction of being the first to use the combined force of sections of acquiescing and obliging electronic media, armies of unelected ideologues and countering criticism of the government with expletives and trolls on social media platforms. The opposition stands pummelled and demoralised and a majority of the media houses practice self-censorship.

Pandora Papers have also put a question mark on the quality of the work of Pakistan’s accountability watchdog. Only a couple of investigative journalists from Pakistan went over reams of papers and massive amounts of emails to unearth clues to wrongdoing by 700 individuals who were presumably never on the radar of the accountability watchdog. How the matter of Broadsheet’s claims was handled and the economic liabilities it entailed for Pakistan are a telling reminder that the accountability system urgently requires an overhal.

It is tempting to say that Pandora Papers will not make much difference, and there are many reasons for that. However, one must remember that the masses’ trust in the state institutions is a prerequisite for a functioning social contract. If people no longer trust the state institutions, it is a recipe for disaster. The failure to take action against the culprits across the board will further erode the state’s writ and spur corrupt practices.

The writer is an   assistant professor in the Department of   Economics at COMSATS University   Islamabad, Lahore   Campus