Looted billions back after dry-cleaning...???

[canadian]

Looted billions back after dry-cleaning

November 9, 2011 — koolblue Mehtab Haider

ISLAMABAD: Who says the billions looted by our corrupt rulers are not coming back into the country? Ironically they are, but only after being cleansed and sanitised by being brought back through official legal avenues while a clueless State Bank looks on helplessly.
An investigation by The News revealed that a substantial portion of the foreign remittances of $23.8 billion, during the almost four-year rule of the PPP led govt, is actually a major source of re-routing of dirty money earned through corruption and tax evasion by the political mafia and its business associates. To cite one instance, while there have been no mentionable increases in salaries or the number of Pakistani ex-pats working in the UAE, there are instances where the remittances have surged three-fold from Abu Dhabi, a favourite fund parking choice of our dirty elite.
The foreign remittances stood at $6.4 billion in 2007-08 and went up to $7.6 billion in 2008-09. The remittances witnessed another jump and touched $8.6 in 2009-10 and surged to $11.2 billion in the last financial year ending on June 30, 2011. This rising trend continued in the first quarter (July-Sept) period of the current fiscal year as it stood at $3.297 billion during this period. The figures of the Bureau of Immigration showed that the number of employed workers in the Gulf region did not witness any unprecedented increase but the received remittances jumped up three times in the case of Abu Dhabi, Saudi Arabia, the European Union and maintained the same level from the USA despite the fact that the developed economies such as the USA and EU were facing an acute financial and debt crisis.
The economists describe this funds-movement phenomenon as money laundering, pure and simple, and the easiest method of turning black illegal wealth into legal white money. No questions asked, no taxes paid. And the method is one of the cheapest money laundering tools as well. The entire exercise of taking dirty funds out illegally and bringing them back clean and legal costs a mere 2 percent of the cost of the entire value of the involved sums.
As put by one economic crime investigator, “This is what we call the Dutch disease that needs to be investigated because if it evaporated it could cause us to plunge into a default on our external account.” This is not a baseless apprehension as proven in the wake of emerging realities. Workers’ remittances showed a declining trend by a massive 32% to $890 million in September 2011 compared to $1,310 million in August 2011.
“One should not see development on the remittances front for the first quarter as it is a worrisome indicator if closely reviewed by the economic managers. In terms of remittances, Pakistan can be compared with the Philippines as its growth is almost flat with authorities expecting a 4.5 percent jump keeping in view the economic outlook of major economies such as the USA, United Kingdom, European countries and the Gulf region. But there is a complete mismatch in the case of Pakistan as the country is witnessing a phenomenal increase by 25 percent without having any economic justifications,” a top officer of the government’s economic team told The News here on Saturday.
Former economic advisor to the government of Pakistan, Dr Ashfaque Hassan Khan who is currently serving as Dean NUST Business School (NBS) opined that there was a mysterious growth in remittances which was not consistent with the level of economic activities in countries from where the bulk of expatriate Pakistanis were sending their money. For example, he said, the US has been the single largest source of remittances and its economy is near to recession as millions of people have lost their jobs. He asked how Pakistanis are still maintaining the same level of remittances as had been the case during the good times in the USA.
He said that another major source of remittances was the European countries, which had been suffering a severe debt crisis for the last two years and economic growth there was almost flat. How one can justify that Pakistanis can afford to continue sending money despite experiencing a standstill economic growth in the EU countries, he asked.
Dr Ashfaque said that another major source is the Middle East and remittances from there witnessed a three-fold increase in recent years. Neither the wages nor the number of overseas employees increased in this period so there is no justification for the sudden jump, he said, arguing, “What is happening on remittances is an unknown phenomenon,” and lamented that so far no credible response had come from the SBP.– (http://koolblue.wordpress.com/)

 

[canadian]

[h=1]Robbing the people[/h]Asad Kharal December 23, 2011

Despite a lapse of several years and despite the country’s apex court having taken several suo motu notices (of various cases), corruption as well as cheating the public at large continues.
Also, by and large, several cases are pending with the National Accountability Bureau (NAB) and the Federal Investigation Agency (FIA) and there seems to be little progress on them. Ordinary citizens expect NAB and the FIA to do their jobs and ensure that those involved in such cases are convicted and that at least some of the money embezzled from the national exchequer is duly returned.
The major cases of alleged corruption that are unaddressed include the National Insurance Company Limited (NICL), the Hajj scandal, the rental power issue, Pakistan Steel, Pakistan Railways, Harris Steel Mills and some others.
Through these scandals the accused, with the connivance of officials of these institutions and influential personalities, have allegedly caused the loss of billions of rupees to the national exchequer by way of misappropriation of funds, dubious deals, and misuse of authority. There are also other cases, of swindlers depriving ordinary Pakistanis of billions of rupees by running parallel banking systems, or offering dubious investment schemes, and in one case selling cars at prices much lower than in the market.
NAB conducted investigations into some of these cases, such as the one known as the ‘Double Shah’ scandal, featuring a man who would offer an investor double his amount in a very short period of time, and two other cases involving the sale of cars in Sial Suzuki Motors and Canal Motors. However, not much became of these and the public has yet to be informed of the status of these, and other, investigations.
In three cases of cheating and fraud alone, it is estimated that a total of Rs12 billion was swindled from some 40,000 people who were lured into investing their hard-earned money into schemes that provided quick and high returns. Of course, it can be argued that people are also partly to blame since such a quick return should have been an indication that the scheme is perhaps dubious and will not last long. However, they have been long pending with the FIA and NAB. The government has not succeeded in even getting a fourth of the money back from the accused. This makes one wonder what the actual use of these organisations is given that they boast large budgets, man-power and many other resources.
This makes one wonder, where is the law of the state? Who will return the billions that have been robbed from these people (in many cases it was their life savings)? Your guess is as good as mind.

 

[canadian]

Piercing the veil of presidential immunity
Posted By Waris Husain On December 22, 2011

The Supreme Court of Pakistan has received a considerable amount of criticism based on its fast-track hearings on Memogate, despite the announcement that the Parliament would be taking action on the matter. There are certainly procedural misgivings in the Court’s acts considering Chief Justice Chaudry is ignoring the constitutional limits on the power of the courts. However, the defense of sovereign immunity lodged by Zardari’s administration is just as legally unfounded and ambiguous. Though presidential immunity may be guaranteed under Pakistan’s Constitution, its implementation cannot subvert the other provisions and ideals of the Constitution.
The legal doctrine of sovereign immunity was created to foster a more efficient presidency; a leader freed from the concern of being sued for every official action will act more deliberately. Theoretically, if leaders are not exposed to prosecutions by the judiciary, they will act in the nation’s best interest rather than their own legal benefit. Further, the head of a nation is exempt from revealing internal documents so that he or she can receive a free flow of information from their advisors without interference from the courts.
Unlike many other constitutional democracies, Pakistan and India both grant absolute immunity to their head of state as part of their Constitution. However, in the Memogate case, the Court has substantiated its potential prosecution of President Zardari through the US Supreme Court case of US v. Nixon. Barrister Zafarullah Khan, who is one of the petitioners in the case, aptly stated that such a legal standard cannot apply in Pakistan because, “in the US constitution, the president does not enjoy immunity as opposed to our Constitution.”
Khan is technically correct as the US Constitution does not explicitly guarantee sovereign immunity in the same way Article 248 does in Pakistan. However, the US Supreme Court has time and time again honored the presidential immunity as a basic foundation of American democracy. In Nixon v. Fitzgerald, the Supreme Court gave the president “absolute immunity from damages liability predicated on his official acts” and allowed the President immunity so long as he acted in “good faith.”
In US v. Nixon, though the Court rejected an unconditional immunity for the president, they stated:
“Certain powers and privileges flow from the nature of enumerated powers, the protection of the confidentiality of Presidential communications has similar constitutional underpinnings… The President’s need for complete candor and objectivity from advisers calls for great deference from the courts.”
US v. Nixon concerned a subpoena served to the then sitting-president Nixon, where the Court required him to disclose recorded conversations between himself and his advisors. The case was not a prosecution of President Nixon himself, but was part of a criminal prosecution of other individuals suspected of breaking into the Watergate.
Amongst many defenses, Nixon raised a Zardari-esque claim of unconditional sovereign immunity from prosecution or disclosure of confidential files before the Court. However, the Supreme Court rejected a claim of absolute immunity stating that the judges must “weigh the importance of the general privilege of confidentiality of presidential communications in performance of the president’s responsibilities against the inroads of such a privilege on the fair administration of criminal justice.”
Indeed, it is this balancing act that must be examined in Pakistan, where the executive has faced a barrage of allegations of corruption. An imbalance of immunity disfavoring the president will lead to the executive branch being controlled by the will of the unelected courts rather than the people who voted for them. On the other hand, an excess of immunity granted to the president where he or she is not subject to the rule of law, challenges “the very integrity of the judicial system and public confidence in the system depend on full disclosure of all the facts.”
For the justices in Nixon v. US, they weighed the president’s generalised claim of immunity against a direct need for evidence to be produced in a criminal case under the Constitutional rights guaranteeing fair trial. The Court found that the president’s immunity could be breached if it would sacrifice the right to fair trial.
Interestingly enough, while there is a constitutional provision allowing for sovereign immunity in Pakistan, Article 8 of the Constitution nullifies any law that violates fundamental rights enumerated in the Constitution. Article 10, which is a fundamental right, states that, “a person shall be entitled to a fair trial and due process.” Therefore, the Pakistani Supreme Court could argue that by not offering evidence in the NRO decision and the current Memogate controversy, the usage of Article 248 immunity by Zardari is invalid as it violates Articles 8 and 10 of the Constitution.
However, there is a very grave caveat that the Supreme Court should heed as it escalates its adversarial relationship with the president. Unlike the Parliament and the president, the Courts must act with great skill to assert themselves in the legal manner while avoiding politicised attacks on individuals. Under the Separation of Powers Doctrine, the Court should give deference to the president and Parliament in making political decisions unless there is an obvious and direct violation of the Constitution.
This is because, unlike the judges who are appointed, the Parliament and president are selected by the will of the people, and they are entrusted with greater responsibilities. Though Pakistan’s lawyers and judges helped bring down Musharaff’s dictatorial regime, they cannot become political creatures. Such a move would not only establish a dangerous precedent for future Supreme Courts, but could also alienate the elected branches to the point of revolt.
Despite the attempt to demonize either the president or the Court over the recent spate, one should consider the legal ramifications of this power-wrangling. Though the Constitution allows for immunity of a sitting head of state, the Court may want to reexamine this practice by looking to how this immunity violates other constitutional protections. However, the Court should defer to the elected branches and temper its activism to instances where the most fundamental constitutional rights are at risk.
The writer holds a Juris Doctorate in the US and is a researcher on comparative law and international law issues.

 

[canadian]

Corruption undermines fundamental rights


Jamil Nasir
Saturday, December 24, 2011




http://www.siasat.pk/forum/#http://www.siasat.pk/forum/#





Every year Transparency International compiles the ranking of countries in order of their corruptness. The more corrupt the country, the lower it descends the ranking. Transparency International (TI) relies for the ranking of the countries on data, impressions of its correspondents and most importantly on the perceptions of the people of a country about the level of pervasiveness of corruption.

The methodology for ranking the countries is undeniably not perfect and fool-proof. It can be contested just on the basis that corrupt acts are generally clandestine in nature, and lack direct evidence. Corrupt acts become visible only if the attempt of the perpetrators fails. Thus the ranking of countries on the basis of perceptions and not direct evidence lacks objectivity. It is also argued that the quality of reports from the TI correspondents may vary based on factors like professional experience and their familiarity with the local environment and culture. Hence, the elements of bias and error in the compilation of these corruption perception index rankings cannot be ruled out altogether.

But at the same time, it is also a fact that TI’s reports are the only comprehensive one we regularly have on corruption issue. The 2010 Transparency International Report, issued a couple of weeks ago, is similar with earlier reports in the sense that the rankings show a consistent pattern. Rich countries like Sweden, Denmark etc are at the top of the list in terms of the corruption perceptions index (ie have lesser corruption levels).On the contrary, the poor and less developed countries are placed at the tail of the ranking. This pattern has persisted over the years with slight variations. It points towards the deep nexus between poverty and corruption.

Corruption exacerbates poverty in several ways. For example, corruption negatively impacts the economic growth. It sharpens inequalities between various strata of the society as it falls heavily on the poor and disadvantaged segments of society. It breeds poverty by perpetuating tax evasion. I had discussed these mechanisms in detail in earlier articles with the titles “corruption and economic development” and “more corruption, more poverty”. So I will not dive into the details from this perspective.

Corruption has devastating effects on the society from human rights perspective as well. It is an infringement of fundamental human rights. This years TI report mentions some incidents which prove the point. For example, the protection of property is a fundamental right which the state is obligated to protect. However, this right is violated very often and with impunity in a corruption-ridden society. The report mentions how the grabbing of land by the corrupt mafia in Karachi has violated this very basic human right.

“Land grabbing by the so-called land mafia is reportedly prolific in Pakistan, particularly in and around Islamabad, Lahore and Karachi. In some cases, housing authorities have allegedly colluded with property developers, who employ private militias to secure the land”, the TI report says.

The report further described an incident of land grabbing by a builder with the connivance of a local politician which was purchased by a Karachi-based family in a government-run auction. When they visited the allotted land, they were greeted by a wall constructed around their plot which had been erected by the land grabbers.

Another story mentioned in the report is from Zimbabwe. The story mentions how corruption is derogatory to human dignity. The story goes that in a local public hospital, nurses charged US$5 every time a mother screamed while giving birth to a baby. This amount was charged as a penalty for raising alarm. The mothers who were unable to pay the delivery fee were detained at the hospital unless they settled the debt. Thus they became captive of the corruption prevalent in the local hospital.

These two incidents mentioned in this TI report are just the tip of the iceberg. The problem is more complex and deep-rooted. Fundamental human rights are always under serious threat in a corruption-ridden society. When corruption is rampant, people do not have access to justice. ‘Right to fair trial’ will be badly trampled in a corrupt judicial and police set-up system as police and court officials will concentrate more on bribes than law. Thus, corruption violates the principles of equality and non-discrimination enshrined in the constitution.

Another basic human right is ‘right to health’. In a corrupt environment, doctors in public hospitals will not pay proper attention to the patients as is the case in our country, because they will prefer the treatment of patients in their private clinics, where they can charge private fee. However, reports have emerged from time to time in the press about the use of adulterated and spurious medicine, the phenomenon symptomatic of a corrupt environment. And above all, the state’s allocations for the health sector is extremely low and that too will be spent on hospital infrastructures and sophisticated medical equipment due to high potential of kickbacks and commissions. In this way corruption undermines the fundamental rights of the people to access to health facilities.

Similarly, low income and poor families cannot have access to social security programmes because these programmes are corrupt or designed to support a corrupt patronage network. Schools do not offer quality education to students because a meagre amount of funds is allocated to the education sector; teachers are recruited without adhering to the principle of meritocracy, and infrastructure is insufficient and poor as the allotted money is used elsewhere.

The ‘right to development’ has increasingly been emphasised, where it is stated that the environment should be conducive to the overall social, political and economic development of the people. A corruption-free society is thus sine qua non for the realisation of the collective rights of development. Corruption hinders economic development, reduces social services both in quality and quantity, and misallocates resources besides dampening economic growth. The impact of corruption on the right to development is devastating especially, if corruption has permeated the top echelons of decision-making. When public money is plundered and finds place in the safe havens outside the country, how can the right to development be enforced.

But the key question is: how can we control corruption in a low trust society like ours. It may be kept in view that corruption is a multi-dimensional issue and has essentially got economic dimensions. When we talk of economic dimensions, it does not mean that improving the salary/remuneration structure will suffice. A common perception prevails and it does so rightly that levels of corruption have not gone down in the departments of revenue, judiciary and police where salary structures have improved in the last couple of years.

The results should not surprise us as empirical evidence (I recall a paper published by the IMF in 1990s) suggests that an increase of 9-10 times in salary (which is prohibitively high due to budget constraints) has some impact on corruption reduction. Incremental increases in salaries of the public officials generally do not translate into reduction of corruption. However, it does not mean that the incentives for the civil servants should not be redesigned.

The point is that corruption problem is multidimensional in nature and essentially requires reduction in regulation, enhancement of accountability and transparency and enactment of whistle-blowing legislation. What is needed first of all is the recognition that corruption is a problem that is curable and a corruption-free society is the most fundamental right we are entitled to as a nation.



The writer is a graduate from Columbia University with a degree in Economic Policy Management. Email:[email protected]