Panama Papers

A severe blow to the system

Offshore companies may be ‘made, situated, or registered abroad, especially in order to take advantage of lower taxes or costs or less stringent regulation. ’ So, speaking most favorably, an ‘offshore company is then a company incorporated for the purpose of operating outside the country of its registration and/or the place of residence of its directors, shareholders and beneficial owners. Again, this is typically pursued to realize various financial, legal or tax benefits.’

No wonder, you see the names of who’s who in Pakistan, from Benazir to Nawaz Sharif, from Malik Riaz to Lak’hani and from Saifullahs to Hashwanis.

Good enough. But all this is not so simple.

‘… to take advantage of lower taxes or costs or less stringent regulation’ and ‘to realize various financial, legal or tax benefits’  purposes behind the establishment of offshore companies, which, as explained in the above ‘friendly’ definitions are not so ‘innocent’ and harmless as they appear at first glance. Legally speaking, such companies may not always be illegal. But they may not be always legal, as well. They are not ‘right’. They are always mala fide when it comes to leaders who are entrusted with representing people and leading nations, owning or having shares in them.

The Prime Minister’s speech to clarify things and offer an explanation to the nation fell short of expectations. Not only that his accusing the PPP appeared plain political point-scoring but also the announcement of the formation of a judicial commission under a retired SC judge felt like eyewash when compared to actions being taken in other countries affected by the Panama Papers’ leak. It cannot pacify an agitated and disturbed populace nor can it help in any way to change the perception of the people about him, his government or the political class at large.

If anything, the formation of secret offshore companies on the part of politicians or people closely related to them is politically incorrect and very damaging in as nascent a democratic system as Pakistan.  But why would they care about doing the right things? They are not a genuine ‘political class’ that comes into existence after decades and centuries of natural political process. The leaders that we see in the garb of politicians currently are products churned out by the political nurseries of military dictators. Bhutto was groomed in Ayub Khan Academy of Politics. Nawaz Sharif and Altaf Hussain came out of the womb of Ziaul Haq. Zardari, likewise, is nothing more but a byproduct of an accident which, some allege, was engineered by sections of establishment during Musharraf rule. And the leader of the future who is going to change this country for good got started during Musharraf era and catapulted to popularity by former ISI chief, Ahmad Shuja Pasha. Sadly, this peculiarity is not just restricted to the top leaders. The whole generations, the entire crop that exists today belongs to this category – with the exception of a negligible few, of course.

But beside a faulty birth, what ails them to have become part of the problem instead of the solution? There can be many reasons but one of the most obvious among them is that the majority of them are not born-politicians. They are people whose real profession is business – property dealers, hoteliers, sportsmen, goldsmiths, blacksmiths, money-smiths, and so on and so forth. Most of them ‘do’ politics in order to protect and to further their business interests; others do it to become heroes and to kill time. Or they are there just for the heck of it. Second, most of them were chosen because of their quality of lacking in vision, and of their being unscrupulous and timid.

As far as the question of how they came into being, it is already partially answered; the system was not allowed to run its natural course and repeatedly put off the track by military dictators. This along with other things led to three long-term fallouts; 1) it did not allow democratic institutions to become strong and self-sustaining, 2) it did not allow genuine political leaders to come into being, and 3) it prevented rule of law to take root.

Scandals like Panama Papers, involving Pakistani individuals who belong to different strata of society, points to a much deeper malaise. However, the narrative being focused on politicians – and may be rightly so – is bound to deal yet another blow to the already dwindling credibility of the much maligned politicians. Though they may deserve it, it will negatively affect the process of political development. It goes without saying that democratic project in the country will suffer accordingly.

It is obvious that such setbacks result in reversal of the process of institution-building which we so badly need, more than ever. Ironically, it pushes the goal of a just system, compatible with the needs of the time further away. It helps in continuing – even further strengthening – the sway of the myopic leaders who rely more on emotional slogans than presenting realistic solutions to the problems we are faced with.

It is obvious that we need strong and independent institutions for this state and society to survive and move ahead. Political institutions are the most important among them. But what we will now hear will most likely be words to raze to the ground whatever good or (mostly) bad political institutions we already have. Almost everyone will be blaming the other and almost everyone will be claiming that he or she is the ‘right person’ to steer the sinking ship of the nation out of the social and political hurricane. However, we should keep in mind that the political wrangling and media thamasha will pave the way and drag the army further into the political quagmire.

But it needs no elaboration that the army’s ascendency and involvement in politics always lands the political systems in graver problems than what it normally comes in to solve. Army’s disruption of the political process and its involvement in it, as a matter of fact, is one of the biggest problems – and not a solution to those problems. It won’t be wrong to say that we may have been where India is today – in terms of political development – had the democratic system not subverted by military dictators time and again.

But then how can we get rid of the corrupt, money-loving, unscrupulous lot that has been taking us for a ride for a long time now – if we don’t want the army to intervene; and if we don’t want politicians to go into their protective mode to resist all such efforts? Because as Cyril Almeida put it in ‘DAWN’ two days ago, ‘When the boys [army] say corruption, they may well mean only corruption – but when the civilians hear corruption, they think regime change and ouster’. And not only politicians but also the people and most of the political scientists hear that, too.

So, a middle ground must be found so that not only the system is not derailed once again but also that the agenda remains narrow and focused on the eradication of corruption while remaining within the democratic system.

One way could be that a grand reconciliation is agreed upon in which the past sins and crimes of all kind are forgotten and forgiven. This may help and prompt politicians, judges, generals, businessmen and bureaucrats, who have lots of skeletons in their cupboards, to get out of their fear and help each other and this nation to have some direction. But it must be accompanied by strict adherence in future to the rule of law and the strictest possible punishment for breaking the law and the minutest form of corruption. That can be a peaceful way to get out of the morass – provided the nation agrees to it.

Or the other way is obvious; a violent overthrow of the present system and bloodshed on the streets with most of the ruling elite bearing the brunt equally. That may not be bad to see the blood-suckers meeting their fate at long last. But the unfortunate part will be when we make a complete circle and find ourselves back to square one after all that mayhem is over. And the farce of groping in the dark in search of some elusive justice and quick-fix solution starts once again.

We must try to avoid that. Cosmetic action won’t do.  We must think of  some better alternatives.

Saleem A Sethi is a freelance columnist and political analyst associated with a Pashto TV news channel. He can be reached at:[email protected].