Pakistan's NRO and Corrupt Democracies of South Asia
Indian and Pakistani democracies have a lot in common. Both systems of governance are a legacy of the British Raj; both have failed to deliver basic necessities, good governance, rule of law and speedy justice to the vast majority of their people; both have been marred by a close nexus between crime and politics; both have many criminals, including violent felons, as members of the legislature and the executive. But the big difference is in the top leadership; the Indian democracy is led by Dr. Manmohan Singh, also known as Mr. Clean; Pakistani democracy has Mr. Asif Ali Zardari, often labeled as Mr. Ten Percent, as its top leader.
The culture of rampant political corruption has come in sharp focus for Pakistanis with the recent release of the names of the beneficiaries of the National Reconciliation Ordinance (NRO), a euphemism for the 2007 US-sponsored amnesty decree by former President Musharraf. There are 34 prominent politicians, including President Asif Ali Zardari and his close associates, topping the NRO beneficiaries list of about 8000 people accused of corruption.
This is by no means a complete list of all the corrupt politicians in Pakistan; it's mainly a list of politicians and bureaucrats included in the "NRO" deal struck between President Musharraf and late Prime Minister Benazir Bhutto under pressure from Washington. The PML politicians have been explicitly excluded from the pardon under the deal. For example, it does not include the Sharif brothers, who have had serious charges of crime and corruption leveled against them, as recently brought out by the affidavits of the PML leader Ishaq Dar, that implicated both of the Sharif brothers in money laundering. The NRO list is probably just the tip of a much larger iceberg threatening Pakistan's national security, current stability and future prospects.
Of the 278 current Indian MPs for whom records are obtainable, 63 have criminal backgrounds. Of those, 11 have been charged with murder and two stand accused of dacoity (banditry). Other alleged misdemeanors range from fraud to kidnapping, according to data collected by National Election Watch, the campaign group that has put together the data. Fortunately for India, none of these criminal politicians occupy the top leadership positions in New Delhi. The honest leaders at the top, leaders like Dr. Manmohan Singh, set a good example of honest, selfless public service for the rest of Indian society.
Unfortunately, the criminal justice system in South Asia is incapable of speedy resolution when the rich and powerful are accused of crimes. “The speed of the Indian judicial system means it can take 30 years to complete a case – easily long enough to live out a full political career,” Mr Himanshu Jha, of India's National Social Watch Coalition, told the Times Online recently. If the NRO were to be allowed to lapse on November 28 as expected, the politicians in Pakistan can easily avoid accountability by filing appeals after appeals in a slow-moving justice system, where it's easy to pay the lawyers and the judges to push out the trial dates, or to make deals to get the charges dismissed altogether.
Predictably, the PML party members led by Nawaz Sharif, who are waiting in the wings to grab power, are playing up the PPP corruption issue for their own benefit. At the same time, many pro-PPP advocates for democracy in Pakistan are counseling patience in the interest of "national security" and "political stability".
The fact is that these “democratic" leaders are so thoroughly corrupt that they can be bought for a fistful of dollars by any body, including the sworn enemies of Pakistan. The kind of stability that will come from these people will only encourage more crime by politicians and growing cynicism among the suffering people of Pakistan, as born out by a recent British Council survey that shows 80% of Pakistani youth are pessimistic about their future.
Rampant corruption by the top leaders is highly corrosive for the entire society. Ignoring the crimes and corruption of top leaders will neither boost national security nor political stability. In fact, it will do just the opposite, by eating away at Pakistan's guts from within. It will make Pakistan more vulnerable to complete failure and ultimate collapse without help from of any external enemies.
To pave the way for a more responsive, better governed, and modern industrialized democracy, the model that is most likely to deliver what Pakistanis need now in terms of political stability and economic opportunity is the ASEAN model, adopted by Suharto of Indonesia, Mahathir of Malaysia and Lee Kuan Yu of Singapore. These three benevolent, relatively honest and competent dictators of ASEAN, who were repressive and ruthless at times, transformed their nations from poor and backward agrarian societies to powerful, industrialized and democratic Asian tigers.
Given its large size, the Indonesian development model under Suharto should be of particular interest to Pakistanis. During Suharto’s three decades in power, Indonesia’s economy grew an average of 7 percent annually, and living standards rose substantially for the bulk of the population. Education and mass literacy programs were used to promote the national language, Bahasa Indonesia, and to unify the country’s disparate ethnic groups and scattered islands. While Suharto used unfettered dictatorial powers and his own family benefited greatly from Indonesia's crony capitalism and its rapid economic growth, the nation reaped huge benefits as well, and eventually, the significantly enlarged, educated and prosperous Indonesian middle class asserted itself and brought democracy to Indonesia after forcing Suharto out in 1998.
Here is an interesting video clip of a Pakistani minister's frank admission of the PPP involvement in bribery. Listen to Mr. Abdul Qayyum Khan Jatoi, Federal Minister for Defense Production, proclaiming that it is the “political right” of every politician to do corruption: “yaar, karrapshun pay humara haq nahiN hai, aur unn ka hai!”:
Here's a video report about the arrest of the same PPP minister Abdul Qayyum Khan Jatoi in 2008 by Islamabad Police at a Islamabad brothel called Cat Club before he was sworn in as a Federal Minister in the current cabinet:
Related Links:
Musharraf's Legacy
ASEAN Model
Challenges For Indian Democracy
Zardari Corruption Probe
Pakistan's Feudal Democracy
Blackwater Bribing in Pakistan
The Politics of NRO
ASEAN Architect Suharto Passes On
Suharto's New Order
Money Laundering Charges Against Sharifs
The NRO Beneficiaries List
The culture of rampant political corruption has come in sharp focus for Pakistanis with the recent release of the names of the beneficiaries of the National Reconciliation Ordinance (NRO), a euphemism for the 2007 US-sponsored amnesty decree by former President Musharraf. There are 34 prominent politicians, including President Asif Ali Zardari and his close associates, topping the NRO beneficiaries list of about 8000 people accused of corruption.
This is by no means a complete list of all the corrupt politicians in Pakistan; it's mainly a list of politicians and bureaucrats included in the "NRO" deal struck between President Musharraf and late Prime Minister Benazir Bhutto under pressure from Washington. The PML politicians have been explicitly excluded from the pardon under the deal. For example, it does not include the Sharif brothers, who have had serious charges of crime and corruption leveled against them, as recently brought out by the affidavits of the PML leader Ishaq Dar, that implicated both of the Sharif brothers in money laundering. The NRO list is probably just the tip of a much larger iceberg threatening Pakistan's national security, current stability and future prospects.
Of the 278 current Indian MPs for whom records are obtainable, 63 have criminal backgrounds. Of those, 11 have been charged with murder and two stand accused of dacoity (banditry). Other alleged misdemeanors range from fraud to kidnapping, according to data collected by National Election Watch, the campaign group that has put together the data. Fortunately for India, none of these criminal politicians occupy the top leadership positions in New Delhi. The honest leaders at the top, leaders like Dr. Manmohan Singh, set a good example of honest, selfless public service for the rest of Indian society.
Unfortunately, the criminal justice system in South Asia is incapable of speedy resolution when the rich and powerful are accused of crimes. “The speed of the Indian judicial system means it can take 30 years to complete a case – easily long enough to live out a full political career,” Mr Himanshu Jha, of India's National Social Watch Coalition, told the Times Online recently. If the NRO were to be allowed to lapse on November 28 as expected, the politicians in Pakistan can easily avoid accountability by filing appeals after appeals in a slow-moving justice system, where it's easy to pay the lawyers and the judges to push out the trial dates, or to make deals to get the charges dismissed altogether.
Predictably, the PML party members led by Nawaz Sharif, who are waiting in the wings to grab power, are playing up the PPP corruption issue for their own benefit. At the same time, many pro-PPP advocates for democracy in Pakistan are counseling patience in the interest of "national security" and "political stability".
The fact is that these “democratic" leaders are so thoroughly corrupt that they can be bought for a fistful of dollars by any body, including the sworn enemies of Pakistan. The kind of stability that will come from these people will only encourage more crime by politicians and growing cynicism among the suffering people of Pakistan, as born out by a recent British Council survey that shows 80% of Pakistani youth are pessimistic about their future.
Rampant corruption by the top leaders is highly corrosive for the entire society. Ignoring the crimes and corruption of top leaders will neither boost national security nor political stability. In fact, it will do just the opposite, by eating away at Pakistan's guts from within. It will make Pakistan more vulnerable to complete failure and ultimate collapse without help from of any external enemies.
To pave the way for a more responsive, better governed, and modern industrialized democracy, the model that is most likely to deliver what Pakistanis need now in terms of political stability and economic opportunity is the ASEAN model, adopted by Suharto of Indonesia, Mahathir of Malaysia and Lee Kuan Yu of Singapore. These three benevolent, relatively honest and competent dictators of ASEAN, who were repressive and ruthless at times, transformed their nations from poor and backward agrarian societies to powerful, industrialized and democratic Asian tigers.
Given its large size, the Indonesian development model under Suharto should be of particular interest to Pakistanis. During Suharto’s three decades in power, Indonesia’s economy grew an average of 7 percent annually, and living standards rose substantially for the bulk of the population. Education and mass literacy programs were used to promote the national language, Bahasa Indonesia, and to unify the country’s disparate ethnic groups and scattered islands. While Suharto used unfettered dictatorial powers and his own family benefited greatly from Indonesia's crony capitalism and its rapid economic growth, the nation reaped huge benefits as well, and eventually, the significantly enlarged, educated and prosperous Indonesian middle class asserted itself and brought democracy to Indonesia after forcing Suharto out in 1998.
Here is an interesting video clip of a Pakistani minister's frank admission of the PPP involvement in bribery. Listen to Mr. Abdul Qayyum Khan Jatoi, Federal Minister for Defense Production, proclaiming that it is the “political right” of every politician to do corruption: “yaar, karrapshun pay humara haq nahiN hai, aur unn ka hai!”:
Here's a video report about the arrest of the same PPP minister Abdul Qayyum Khan Jatoi in 2008 by Islamabad Police at a Islamabad brothel called Cat Club before he was sworn in as a Federal Minister in the current cabinet:
Related Links:
Musharraf's Legacy
ASEAN Model
Challenges For Indian Democracy
Zardari Corruption Probe
Pakistan's Feudal Democracy
Blackwater Bribing in Pakistan
The Politics of NRO
ASEAN Architect Suharto Passes On
Suharto's New Order
Money Laundering Charges Against Sharifs
The NRO Beneficiaries List
Comments
Sincerely,
MediaMentions
http://ahraza.wordpress.com/2009/11/25/so-what-its-just-the-nro/
Benazir was a notably inept administrator. During her first 20-month-long premiership, she failed to pass a single piece of major legislation, and during her two periods in power she did almost nothing to help the liberal causes she espoused so enthusiastically to the Western media.
Instead, it was under her watch that Pakistan’s secret service, the Inter-Services Intelligence (ISI), helped install the Taliban in Pakistan, and she did nothing to rein in the agency’s disastrous policy of training up Islamist jihadis from the country’s madrasas to do the ISI’s dirty work in Kashmir and Afghanistan. As a young correspondent covering the conflict in Kashmir in the late 1980s and early 1990s, I saw how during her premiership, Pakistan sidelined the Kashmiris’ own secular resistance movement, the Jammu and Kashmir Liberation Front, and instead gave aid and training to the brutal Islamist outfits it created and controlled, such as Lashkar-e-Toiba and Harkat ul-Mujahedin. Benazir’s administration, in other words, helped train the very assassins who are most likely to have shot her.
Benazir was, above all, a feudal landowner, whose family owned great tracts of Sindh, and with the sense of entitlement this produced. Democracy has never thrived in Pakistan in part because landowning remains the base from which politicians emerge. In this sense, Pakistani democracy in Pakistan is really a form of “elective feudalism”: the Bhuttos’ feudal friends and allies were nominated for seats by Benazir, and these landowners made sure their peasants voted them in.
Behind Pakistan’s swings between military government and democracy lies a surprising continuity of elitist interests: to some extent, Pakistan’s industrial, military and landowning classes are all interrelated, and they look after each other. They do not, however, do much to look after the poor. The government education system barely functions in Pakistan, and for the poor, justice is almost impossible to come by. According to the political scientist Ayesha Siddiqa, “Both the military and the political parties have all failed to create an environment where the poor can get what they need from the state. So the poor have begun to look for alternatives. In the long term, these flaws in the system will create more room for the fundamentalists.”
Many right-wing commentators on the Islamic world tend to see political Islam as an anti-liberal and irrational form of “Islamo-fascism”. Yet much of the success of the Islamists in countries such as Pakistan comes from the Islamists’ ability to portray themselves as champions of social justice, fighting people like Benazir Bhutto from the corrupt Westernised elite that rules most of the Muslim world from Karachi to Riyadh, Ramallah and Algiers.
Benazir’s reputation for massive corruption was gold dust to these Islamic revolutionaries, just as the excesses of the Shah were to their counterparts in Iran 30 years earlier: during her government, Pakistan was declared one of the three most corrupt countries in the world, and Bhutto and her husband, Asif Zardari — widely known as “Mr 10%” — faced allegations of plundering the country; charges were filed in Pakistan, Spain, Switzerland, the United Kingdom and the United States to investigate their various bank accounts, and they stood accused of jointly looting no less than $1.4 billion from the state.
The recent spate of acquittals of alleged terrorists has brought into question the authorities’ capacity to investigate and try terrorism-related crimes.
Since April, at least 33 alleged terrorists have been released by anti-terrorism courts, mostly because of lack of evidence. They had been indicted and prosecuted for nine suicide attacks carried out in Islamabad and Rawalpindi in 2007 and 2008, killing more than 150 people.
The latest to be acquitted were six men charged with carrying out bomb blasts at the Islamabad district courts and Aabpara market in July 2007. Earlier on, those charged in four suicide attacks on military targets in Rawalpindi and two bomb attacks on Islamabad’s Marriott Hotel, as well as in an attack on the Kamra Aeronautical Complex in December 2007, had been acquitted. This spate of acquittals by the lower courts was preceded by the Lahore High Court’s overturning of the 2008 conviction of two men for their role in plotting an attack on the then president Pervez Musharraf in Rawalpindi in 2007.
Whether the acquitted were innocent and wrongfully charged, or guilty but acquitted due to lack of evidence, our failure to incapacitate terrorists is obvious. If the acquitted are guilty, it sends out an ominous sign that the state is not serious about bringing the militants to book. Enhanced security is not enough to foil attacks.
Proper investigations resulting in concrete evidence are important to locate the source of a particular terrorist attack. The ability to analyse such data can help prevent future attacks. If we want to make effective use of the criminal justice system to prevent terrorism, a more disciplined approach is needed so that the courts have the needed evidence for convictions. Only then can we hope to have a strong and effective justice system for the hundreds who fall victim to terror attacks each year.
A senior Pakistani diplomat has called for an inquiry into allegations that rich landowners diverted water into unprotected villages during the floods to save their own crops.
UN ambassador Abdullah Hussain Haroon said there was evidence that landowners had allowed embankments to burst.
This led to waters flowing away from their land, he said.
More than 1,600 people have died in the floods, which have affected about 17 million people.
"Over the years, one has seen with the lack of floods, those areas normally set aside for floods have come under irrigation of the powerful and rich," Mr Haroon told the BBC's HardTalk programme.
"It is suggested in some areas, those to be protected were allowed, had allowed, levies to be burst on opposite sides to take the water away. If that is happening the government should be enquiring."
At the height of the floods, it is estimated that one-fifth of the country - an area the size of Italy - was underwater.
The flood waters are beginning to drain away to the Arabian Sea but inundations continue in parts of Sindh province.
http://www.bbc.co.uk/news/world-south-asia-11160995
NEW DELHI: The Mumbai-headquartered Western Naval Command (WNC) has raised serious security concerns and sought action by the navy, army and government against a highrise apartment complex in Mumbai's Colaba area, in which senior military leaders, politicians and bureaucrats own apartments. Among those allotted houses in the 31-storeyed Adarsh Housing Society are two former army chiefs, several other generals and admirals, and political leaders and senior bureaucrats.
A recent letter to the navy chief from Vice-Admiral Sanjeev Bhasin, Flag Officer Commanding-in-Chief, WNC, and other documents with TOI reveal a conspiracy to appropriate, in the name of war widows and military veterans, a prime plot that was in the army's custody for years. In the process, the army even lied to the ministry of defence (MoD), which then misled Parliament, when a starred question regarding the ownership of the land came up in 2003.
Almost every army officer involved in misleading Parliament now owns a house in the complex. In his letter, Admiral Bhasin says that the housing society is now refusing to part with the list of its members and the Maharashtra government too does not have the details.
The building, immediately adjacent to a planned helipad and other military installations, has violated the CRZ ( coastal regulation zone) limit of a maximum height of 30 metres, and has now gone up to 100 metres, says Bhasin inhis letter dated July 5 of this year. The Western Naval Command chief has suggested that the army be asked to institute a formal inquiry to find out duplicity, if any, by serving/retired officers in reappropriation of the ecological park managed and occupied by HQ MG&G (headquarters, Maharashtra, Gujarat and Goa) Area since 1996. He also wants the MoD to take up the issue with the Maharashtra government and ensure that further construction is stopped and occupancy permission is not given.
The controversy fundamentally hinges around whether the plot of land belonged to the army or not and in this matter, several senior army officials were more than cooperative in declaring that it did not. Crucial documents that prove the army's possession of the land and the Maharashtra government's past commitment to give the plot to the army have gone missing from the records of the concerned army offices in Mumbai and Pune. TOI now has many of those documents. When we sent a detailed questionnaire based on these undisclosed facts to the army headquarters a few weeks ago, the only reply was, "We are looking into all aspects brought out by you."
Read more: Top generals, babus & netas in land-grab - The Times of India http://timesofindia.indiatimes.com/india/Top-generals-babus-netas-in-land-grab/articleshow/6805880.cms#ixzz13Np5thJI
India's TI reports only a fraction of the massive corruption among Indian politicians, bureaucrats and judges who are no better than their counterparts in Pakistan.
Last year, Indian Ambassador Mera Shankar wrote a letter to Delhi complaining that no action had been taken by Delhi against a number of corrupt Indian officials whose names were disclosed in guilty pleas by US companies convicted under Foreign Corrupt Practices Act by US courts.
KARACHI: Pakistan's decline continue in Corruption Perceptions Index (CPI) and now its Index Score is 2.3 against 2.4 in 2009, and out of 178 countries, its ranking as most corrupt country has slipped 7 ranks, from 42 in 2009 to 34 most corrupt country in 2010.
The 2010 CPI shows that nearly three quarters of the 178 countries in the index score below five, on a scale from 0 (perceived to be highly corrupt) to 10 (perceived to have low levels of corruption), indicating a serious corruption problem.
Syed Adil Gilani, Chairman TI Pakistan said in last two year there have been unprecedented cases of corruption involving tens of billions of rupees in public sector organization, which under the Rule of Law, should have been taken up by the National Accountability Bureau.
He said the political will of the government to fight corruption is lacking which has resulted in the Supreme Court of Pakistan to take suo moto action against mega corruption in NICL, Pakistan Steel, Rental Power Plants.
The CPI 2010 reveals that corruption in Pakistan is increasing, while in Bangladesh it is decreasing. Bangladesh was perceived to be the most corrupt country in 2001, 2002 and 2003 and its ranking in 2010 is 39 most corrupt country.
Reduced corruption has paid dividends to Bangladesh whose annual GDP growth last year was over 5%, while Pakistan's GDP growth last year was near 2.4 %. Delay in formation of An Independent Accountability Commission by the parliament may further aggravate the situation.
Chairman TI Pakistan said that the Supreme Court of Pakistan, which has a declared policy of Zero-Tolerance for Corruption on 22 March 2009, in its order of 12th October, 2010 in NICL Case No.18 of 2010 involving six procurements is considers the Violation of Public Procurement Rules 2004 as a criminal act. It is a landmark order, treating violation of Public Procurement Rules 2004 as a federal crime and it will help reduction in Corruption.
The direct impact of increased corruption is witnessed in the rise in the prices of food commodities which according to the latest official data of Federal Bureau of Statistics, have increased up to 120 percent in last one year viz. sugar from Rs 54 to Rs 80, pulses from Rs 50 to Rs 110, eggs from Rs 35 to Rs 60, and the Foreign Direct Investment for the fiscal year 2009-2010 dropped to US $ 2.21 billion from US$ 3.71 billion in FY 2008-2009, and in July-Sept 2010 it is further dropped to US $ 387.4 million ( 68% of last year).
Foreign debt on Pakistan increased from US $ 40 Billion in 1999 to US $ 46 billion in 2008, whereas in last two years it has increased to US $ 53.5 billion.
Across the board Application of Rule of Law, Merit based appointments and easy Access to Justice is the only solution to save Pakistan from corruption, which is responsible for poverty, inflation, terrorism, illiteracy, lack of electricity and hording of essential food commodities.
In the 2010 CPI, Denmark, New Zealand and Singapore tie for first place with scores of 9.3. Unstable governments, often with a legacy of conflict, continue to dominate the bottom rungs of the CPI. Afghanistan and Myanmar share second to last place with a score of 1.4, with Somalia coming in last with a score of 1.1.
....Some believe the court’s actions are part of a necessary, if messy, rebalancing in a country that has long been dominated by the army or seen chaotic periods of rule by corrupt politicians. Others view the court as just another unaccountable institution undermining the elected government.
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The army has been the principal point of contact for the U.S. in the decade since it resuscitated ties with Pakistan to help with the Afghan war. While the army remains the strongest Pakistani institution, recent events indicate it has ceded some of that power to the Supreme Court and the country’s civilian leaders.
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The Supreme Court’s activism was on full display Monday.
The court charged Pakistan’s prime minister with contempt for refusing to reopen an old corruption case against the president. Later, it ordered two military intelligence agencies to explain why they held seven suspected militants in allegedly harsh conditions for 18 months without charges.
Some government supporters have accused the court of acting on the army’s behalf to topple the country’s civilian leaders, especially in a case probing whether the government sent a memo to Washington last year asking for help in stopping a supposed military coup.
But no evidence has surfaced to support that allegation, and the court’s moves against the military seem to conflict with the theory. The judges have also taken up a case pending for 15 years in which the army’s powerful Inter-Services Intelligence agency, or ISI, is accused of funneling money to political parties to influence national elections.
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The court’s actions against the army are a significant turnaround. For much of Pakistan’s nearly 65-year history, the court has been pliant to the army’s demands and validated three coups carried out by the generals.
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The Pakistani media have largely applauded the court’s activism against the army, which has also had its power checked by a more active media and the demands of a bloody war against a domestic Taliban insurgency.
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“I think the Supreme Court is going too far,” said Pakistani political analyst Hasan-Askari Rizvi. “In the past, it was the army that would remove the civilian government, and now it’s the Supreme Court, another unelected institution trying to overwhelm elected leadership.”
Supreme Court justices are appointed by the president based on recommendations from a judicial commission working in conjunction with parliament. The judges can serve until the age of 65 and can be removed only by a judicial council.
The cases have distracted the government from dealing with pressing issues facing the country, including an ailing economy and its battle against the Pakistani Taliban.
Moeed Yusuf, an expert on Pakistan at the United States Institute of Peace, said the jockeying for power between the army, Supreme Court and civilian government was expected given the shifting political landscape and could be beneficial to the country in the long run.
“No country has managed to bypass several phases of such recalibration before they have arrived at a consensual, democratic and accountable system where institutions finally are able to synergize rather than compete endlessly,” Yusuf wrote in a column in Dawn.
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“No single group will totally dominate the system,” said Rizvi. “That will slow down decision making further in Pakistan because nobody can take full responsibility for making a decision.”
http://www.washingtonpost.com/world/asia-pacific/pakistans-assertive-supreme-court-signals-power-shift-in-vital-us-ally/2012/02/14/gIQAIZHODR_story.html
"Sugar is critical commodity in a country (Pakistan) where people consume vast amounts of sweet tea, soft drinks, and cakes, using about 4 million metric tons of sugar a year. .....Sugar is also very profitable. Pakistan is among the top five producers of sugar cane in the world, employing more than two million seasonable laborers at harvest time, and sugar refining is the second largest agribusiness after flour milling. According to National Accountability Bureau, a majority of country'd eighty-plus sugar mills are owned by political families, including Sharifs and Bhuttos, as well as members of parliament and several military-controlled enterprises."
"In Pakistan, the sugar industry is actually a political industry in which powerful politicians on all sides are involved", said a 2009 statement from the Sugar Mills Workers Federation that described how the big millers cheat mall growers through fake middlemen, then manipulate sugar prices by pressuring the government to stimulate or discourage exports depending on how much cane has been harvested."
"Throughout the 1990s, during two periods of rule by Sharifs and two by his archrial Benazir Bhutto, the privatization process became a game of grab and run. Investing of investing in solid projects, many business groups colluded with corrupt officials to make quick profits. They borrowed huge sums (from state-owned banks) without collateral, created and dissolved ghost factories, purchased state assets at token prices, avoided paying taxes, defaulted on shaky loans, or deferred paying them indefinitely....Major defaulters and beneficiaries of loan write-offs, granted by both the Bhuttos and Sharif governments, included some of Pakistan's wealthiest business families-- Manshas, Saigols, Hashwanis, Habibs, Bhuttos and Sharifs......using the National Accountability Bureau (NAB), the (Musharraf) regime (after year 2000) went to prosecute eighteen hundred cases of corruption to recover nearly $3.4 billion in assets."
https://books.google.com/books?id=Y-wU1aVyM9IC&pg=PA40&lpg=PA40&dq=pakistan+sugar+mafia+politician&source=bl&ots=W7LPxh8OQW&sig=9zTBvtFcwCSIXjs6Hxz-HdylcXg&hl=en&sa=X&ved=0ahUKEwiLvtLu-4vRAhVpqVQKHXBDCSQQ6AEISjAN#v=onepage&q=loan%20defaulters&f=false
https://www.dawn.com/news/1318333/khanani-group-launders-billions-of-dollars-us-report
In its section on Pakistan, the report notes: “The Altaf Khanani money laundering organisation (Khanani MLO) is based in Pakistan. The group, which was designated a transnational organised crime group by the United States in November 2015, facilitates illicit money movement between, among others, Pakistan, the United Arab Emirates (UAE), United States, UK, Canada, and Australia.”
The group “is responsible for laundering billions of dollars in organised crime proceeds annually. The Khanani MLO offers money laundering services to a diverse clientele, including Chinese, Colombian, and Mexican organised crime groups and individuals associated with designated terrorist organisations”, the report adds.
It describes Pakistan as strategically located country at the nexus of south, central and western Asia, with a coastline along the Arabian Sea. The report notes that Pakistan’s porous borders with Afghanistan, Iran and China facilitate the smuggling of narcotics and contraband to overseas markets.
“The country suffers from financial crimes associated with tax evasion, fraud, corruption, trade in counterfeit goods, contraband smuggling, narcotics trafficking, human smuggling/trafficking, terrorism and terrorist financing,” the report points out.
“There is a substantial demand for money laundering and illicit financial services due to the country’s black market economy and challenging security environment.”
The report notes that money laundering in Pakistan affects both the formal and informal financial systems. Pakistan does not have firm control of its borders, which facilitates the flow of illicit goods and monies into and out of Pakistan.
The report, however, acknowledges that most Pakistanis living abroad use legal channels for sending money home. From January to December 2016, the Pakistani diaspora remitted $19.7 billion back to Pakistan via the formal banking sector, up by 2.3 per cent from 2015.
The report notes that while it is illegal to operate a hawala without a licence in Pakistan, the practice remains prevalent because of poor ongoing supervision efforts and a lack of penalties levied against illegally operating businesses. “Unlicensed hawala/hundi operators are also common throughout the broader region and are widely used to transfer and launder illicit money through neighbouring countries,” the report adds.
Common methods for transferring illicit funds include fraudulent trade invoicing, unlicensed hundis and hawalas and bulk cash smuggling.
The report says that criminals exploit import/export firms, front businesses and the charitable sector to carry out their activities. Pakistan’s real estate sector is another common money laundering vehicle, since real estate transactions tend to be poorly documented and cash-based, it adds.
The report notes that in January 2015, Pakistan launched the National Action Plan (NAP), addressing primarily counter-terrorist financing. The government’s implementation of the NAP “has yielded mixed results, which is in part due to the lack of institutional capacity as well as political will,” the report adds.
“Unlicensed hawaladars continue to operate illegally throughout
Pakistan, particularly in Peshawar and Karachi, though under the NAP Pakistan has reportedly been pursuing illegal hawala/hundi dealers and exchange houses.”
The report says that Pakistan’s Federal Investigation Agency, which is responsible for investigating money laundering cases, lacks the capacity to pursue complicated financial investigations.