The wrong road taken

0
98
  • An unnecessarily overzealous NAB doing irreparable damage to the economy

By: Khaled Ahmed

Fake News One: After hearing that Amazon, which is valued at nearly $800 billion, had paid nothing in federal taxes even though it had almost doubled its North America profits from $5.6 billion to $11.2 billion between 2017 and 2018, the U.S. National Accountability Bureau arrested Amazon founder Jeff Bezos and denied him bail until such time as he proved himself Not Guilty, also disallowing his family and lawyers to meet him in prison.

Fake News Two: British-Pakistani businessman Zameer Choudrey, CEO of Bestway Group, which is the 10th largest privately owned business in the U.K., was appointed Commander of the Order of the British Empire (CBE) in 2016 for creating jobs and running a big charity. After rumors of fraud, however, the U.K. National Accountability Bureau arrested him and put him in prison on the pain of proving himself Not Guilty. The Queen took away his knighthood and recommended Class C prison for him until he submitted to a plea bargain, which is an admission of guilt and a deemed conviction.

There is a deep-seated resistance to looking objectively at what the state has done to projects in the public sector now withering on the political vine, with Prime Minister Imran Khan unwilling to privatize them and revive them in the private sector

We all know that Pakistan is deep in economic trouble. It has had to submit to doctor’s orders from the IMF to cure its financial maladies, to collect taxes which it didn’t because of the corruption it couldn’t uproot, to make itself attractive to foreign investors which it didn’t because of war and the rip-offs the state subjected investors to, and to cut the red-tape to make it easy for investors to work in an environment friendly to economic activity of any sort.

The problem of corruption has been hounding Pakistan for a long time. But it couldn’t be more perilous than what the investors faced trying to undertake permissible risk, borrow money, and set up industries needed to create employment, thus enabling the state to collect from a larger tax-paying base. But Pakistan read the signs. It created the Ehtesab Bureau in 1997 that morphed into a weaponized National Accountability Bureau (NAB) in 1999, armed with powers that militated against democratic governance and economic administration, exempting it from the requirement of proving the accused guilty by shifting this legal onus on to them.

NAB is hardly exempt from the moral turpitude rampant in society. Manned by minimally presentable officers, NAB seems unaware of the economic damage its pursuit of businessmen is doing to the economy. It is focused on the satisfaction of an uninformed public passion instead of responding to the subtle requirements of internal and external trust on which today’s capitalism depends.

Abdul Hafeez Shaikh, economic adviser to the Prime Minister, has already objected to what NAB is doing to investors saying they should not be hounded by the process of “accountability” unleashed in Pakistan. No distinction is made between the holders of public office under scrutiny doing their usual hanky-panky and men of business who have to suffer red-tape and consequent extortion while putting up new projects.

Shaikh must have taken account of the recent observation made by the Chief Justice of Pakistan that accountability was slipping into “political engineering” rather than providing justice. The ruling Pakistan Tehreek-e-Insaf (PTI) is also rumored to be working on an amendment of the NAB law to “protect businessmen.” The NAB chairman has announced that he would not go after businessmen on charges of tax evasion.

And yet, the most outrageous recent example of Pakistan’s economic myopia is the arrest on Sept. 4 of Iqbal Z. Ahmed of the Associated Group which was noted with concern in the national media. Ahmed’s company had set up in 2016 Pakistan’s second Liquefied National Gas (LNG) import terminal with foreign expertise and investment, substantially from Norway and China, totaling $500 million. According to the Ministry of Energy, the project yields annual foreign exchange savings of an estimated $1.5 billion through fuel substitution in electricity production.

People who continue to read alarmist reports about how big business was ripping off the nation hardly notice that Pakistan had been trying to set up an LNG terminal for decades without much success. The delay could have been caused by politicians wanting their “pound of flesh” through graft; but Ahmed managed to set up one LNG terminal, thus opening the door finally for global investment into Pakistan. He was arrested outside his office half an hour before his scheduled meeting with foreign investors to set up another LNG import terminal for gas-starved Pakistan.

NAB picked up Ahmed “for money-laundering of Rs. 112 billion” and, as usual, was not required to prove anything before it arrested him and treated him like a convict. His media trial continues, and his family has refrained from issuing any public statement. The campaign against him is ugly to anyone looking objectively at Pakistan’s process of justice.

Apart from the normal risk-taking for which capitalism rewards its entrepreneurs, Ahmed, in his mid-70s with four stents in his heart, has had to face persecution to satisfy the partisan lust of the rulers masquerading as champions of “accountability.” No one can visit him in his NAB prison, not even his lawyers, and NAB is taking its time framing the money-laundering charges derived from reading his company’s bank statements.

There is no bail provision in case NAB is revealed mishandling the case; and the infamous “remand” (keeping someone in jail without giving reason) can go on for 90 days and may be “renewable.” Ahmed can be incarcerated for years and can still come out un-sentenced—if he lives—without NAB being answerable for it. In Pakistan, a judge can rescind international contracts for which the state ends up coughing up billions of dollars as penalty without the judge being lynched for it.

The common enthusiast who wants to “uproot corruption” in quick time appears satisfied by the “emergency” measures taken by NAB. If you plead that the methodology of “uprooting” corruption without due process looked ugly, he in turn pleads that the “correct” process of proving the wrongdoer guilty had been forever damaged by corruption; and therefore leapfrogging due process was the only course left.

But deep down there is an almost medieval resistance to accepting the demands of modern economy and the place in it of the risk-taking business community. There is a deep-seated resistance to looking objectively at what the state has done to projects in the public sector now withering on the political vine, with Prime Minister Imran Khan unwilling to privatize them and revive them in the private sector.

After Ahmed was dramatically and suddenly arrested by NAB, Express Tribune noted: “Two top global LNG suppliers have stayed away from participating in the bid to procure 200 million cubic feet per day, following a case taken by NAB on LNG terminal and imports from Qatar.”

Ahmed had been appearing at international energy conferences abroad making the case for the economy, talking up the investment climate, and emphasizing that Pakistan is open for business. The foreign investors who were left waiting in his conference room in Lahore on the day of his arrest got to see just how inclement the business environment really is.