A FEW years ago, in an earlier column, I had described Pakistan’s putative democracy as a system of spoils where the governance framework and rules are rigged so that the “winner takes all”. All the money, that is. With the institutional checks and balances so thoroughly short-circuited and compromised, it was just a matter of time before Pakistan’s elected kleptocrats would make Jayalalitha and Laloo Prasad look like rank amateurs, and take their true place next to the likes of Robert Mugabe.

When politicians band together and sing a chorus of “save the system”, they are euphemistically referring to the ecosystem of pelf, power and patronage that throws up around Rs1,500 billion a year in ill-gotten gains for a handful of corrupt and connected insiders.

Despite the fact that stories of mega corruption have been swirling thicker and faster each year since 2008 — with some large financial scams hangovers of the Musharraf era, predating our tryst with democratic destiny — and have inured and de-sensitised us collectively, the scale of the corruption being reported, especially out of Sindh, is staggering.

Our moral compass is so lost that we can even loot poor Hajis on their sacred journey, like modern-day versions of marauding brigands of old, or walk off with the Turkish first lady’s necklace, donated for victims of the devastating floods. We can deprive Tharis of food and water, and claim the deaths of their children due to our corruption and mis-governance as an “act of God”. The list of our misdeeds in a short span of time is so long that one has forgotten many of the headlines that had riveted us just a short few years ago — ephedrine, ‘Safe City’, NIC, NLC, Harris Steel etc.

What we have been witnessing here is a level of corruption once equated with the worst African despots.

To this list of infamy, I have little doubt we will one day be adding the LNG and coal power projects of this government, among ‘minor’ acts of commission such as the Metro and Orange line rapid transit projects. (On a lighter note, a friend has renamed the Planning Commission ‘Planning for Commissions’!)

The bottom-line is that whereas corruption has been a feature of all governments in Pakistan, civilian or non-civilian, the scale has never been as large or its dimensions so dangerous. I had previously estimated that corruption amounting to 5-7pc of GDP occurs each year in Pakistan. On current evidence, it appears I may have under-estimated recent levels by a big margin.

What we have now been witnessing is the level of corruption that was once equated with the worst African despots in the 1970s and 1980s — one that undermined the development of these countries for decades and kept more than one generation of citizens trapped in abject, inhuman poverty. This scale and level of corruption creates dysfunctional governments, leading to the eventual destabilisation of the state itself. It is not mere coincidence that African countries mired in the worst corruption are ones that are the richest in mineral resources, and have all spiralled into a deadly vortex of civil war.

That is the darker and dangerous dimension of the issue in Pakistan’s case. The tentacles have spread from financial corruption to organised crime, to terrorism and to Pakistan’s regional enemies. (For a couple of consecutive recent years, I have been asked at the National Defence University whether I subscribed to the notion of ‘economic hitmen’ being unleashed on countries. Till a few years ago, I felt the notion was far-fetched and conspiratorial. With what has emerged out of Karachi in the past few weeks, I am now convinced I was wrong.)

None of what is being revealed should be surprising. Many of us have been consistently pointing out the weak state of institutions in Pakistan and how that is undermining the country’s economic performance as well as long-run development. The world’s leading economic agencies and think tanks have been doing the same. Here is an extract from the World Economic Forum’s most recent Global Competitiveness Report: “The country [Pakistan] obtains low marks in the most critical and basic areas of competitiveness. Its public institutions (125th) are constrained by red tape, corruption, patronage, and lack of property rights protection.”

In the latest Worldwide Governance Indicators produced by the World Bank (for 2013), Pakistan’s percentile rank in “control of corruption” is 18th — meaning that it is worse off than 82pc of the countries in the world on this measure. It is six ranks below Bangladesh and three notches lower than Sierra Leone. Under ‘rule of law’, Pakistan is in the 21st percentile globally, one rank behind Sierra Leone, two behind Mozambique, and four behind Bangladesh. In overall ‘government effectiveness’, Pakistan comes in at the 23rd percentile, one rank lower than the West Bank and Gaza.

A seriously weak institutional framework has grave economic as well as social consequences — ones that have become so very visible in our case. At its most pernicious, mega corruption undermines the state, eventually paving the way for non-state actors to gain control incrementally. Equally pernicious is that it consigns a large part of the population to an unending, and callous, cycle of poverty and misery.

This is why the army ‘clean-up’ in Sindh, especially in Karachi, should be lauded and fully supported. However, our ultimate road to victory lies in making sure we never get to this point again. It should be obvious that such widespread and pervasive rent-seeking can only thrive in the absence of strong institutions. It is not surprising, therefore, that the ecosystem of weak and atrophying institutions serves the interests of Pakistan’s rapacious elites very well.

Our response, not just to the current phase in Karachi, has to be institutionalised. That would entail sacrificing sacred cows across the spectrum in establishing the rule of law — be it within the armed forces or the judiciary.

The writer is a former economic adviser to government, and currently heads a macroeconomic consultancy based in Islamabad.

Published in Dawn, June 26th, 2015

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