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How is politics funded in Pakistan?
THE promised poll of Feb 8 is two months away. It is around this time that the collection and spending of funds by election candidates and political parties hits its highest level. A political party spends many times more during an election year than at other times. So, it is natural for parties to tap into many more sources of funds closer to the poll date.
A popular source of funds is the application fee charged from those who seek party tickets. The PML-N has fixed Rs200,000 and Rs100,000 as the non-refundable application fee for party tickets for the National Assembly and provincial assemblies, respectively, for the coming election.
It is anticipated that the fee will form a substantial part of the kitty of at least the three largest political parties, ie, PML-N, PTI and PPP. Earlier, income earned through the ticket application fee formed a substantial part of political parties’ income, as analyses of political parties’ statements of accounts, made public by the ECP every year, bear out.
The PTI, for example, earned about Rs478 million through the application fee during the 2018 polls and subsequent by-elections. This amount was about 45 per cent of the PTI’s total income in financial years 2017-18 and 2018-19. Although the PML-N’s Rs140m was much less than the PTI’s collection under this head, the party apparently depended more on the application fee, as it was the source of over 95pc of its total income during election year 2017-18. The PPP and PPP-P together could collect only about Rs95m, but it constituted around 89pc of their income during 2017-18.
Even from a long-term perspective, the application fee is a significant part of the funds collected by political parties. Over the past 13 years, the share of this fee in the parties’ total income constituted about 19pc, 33pc and 64pc for the PTI, PML-N and PPP.
The PML-N was able to collect Rs596m through application fees at the time of the 2013 election, compared to about Rs124m earned by the PTI. This equation was reversed in the 2018 general election, when the PTI received Rs335m compared to only Rs125m by the PML-N, indicating that the PTI election ticket was much more in demand than the PML-N’s during the 2018 election, whereas the situation had been just the opposite in 2013. The figures are based on what was officially reported by political parties to the ECP.
The information indicates that political parties and their leaders receive far larger sums from the candidates as unaccounted for ‘donations’, also for awarding tickets. This may explain why the number of rich and super-rich candidates has been increasing in almost all parties.
The dependence on the ticket application fee by political parties may also explain the disproportionately small number of young candidates. Young people, unless they come from the rich land-owning or industrial class, are in a relatively weaker position to make large donations to parties. Although young (35 years and below) registered voters constitute about 45pc of the total number of registered voters, their overall representation in candidates fielded by the top 10 political parties was merely 19pc.
The PTI, which is generally perceived to be a party of the youth, fielded only 129, or a little over 16pc, young candidates in the past election. PPP chairman Bilawal Bhutto-Zardari, who has been criticising the ‘aged’ leadership of various political parties and demanding that the youth be given a chance to replace it, could offer only 122 — less than 17pc — young candidates out of a total of 727 in 2018. The PML-N’s performance was even more dismal, as it fielded only 86, or just 13pc, young candidates out of 646 in 2018.
Political parties’ dependence on the party membership fee is almost negligible. The PTI has reported that its membership fee over the past 13 years amounted to Rs21m, or a miniscule 0.6pc of its total income, compared to the PML-N, which showed Rs11m, or 0.9pc, of its total income, and the PPP doing slightly better by collecting Rs41m or 9pc of its total income.
Donations from non-members, however, seem to be another significant source of income for political parties. The PTI topped the list by receiving donations worth Rs2.5 billion in the past 13 years, while the PML-N and PPP collected Rs641m or 33pc of the total income and Rs18m or 4pc, respectively.
Although Article 17(3) of the Constitution requires political parties to account for their sources of funding, the statements of accounts submitted by political parties generally do not disclose the identity of donors and refer to them as ‘donors’ or ‘contributors’.
Surprisingly, the PPP earned an interest of about Rs24m on its bank deposits, which translates to over 90pc of its total income during 2013-14. The total bank interest over 13 years also amounts to a decent Rs106m, or 23pc of its total income. Both the PTI and PML-N earn far less under this head, as their statements show 0.49pc and 1.33pc of their total income from this source over the past 13 years.
Funding of politics is considered a very sensitive subject in almost all developed societies. Politicians and political parties compile and submit political finance documents very carefully and watchdog agencies, like the ECP in Pakistan, scrutinise these documents equally seriously. In the past, the ECP had neither the capacity nor perhaps the will to undertake this responsibility seriously.
In the last two years, however, it seems to have reorganised, staffed and equipped its political finance wing and established links to institutions such as the FBR. It remains to be seen what level of scrutiny political finance will face in election year 2024.
The writer is president of the Pakistan Institute of Legislative Development And Transparency.
president@pildat.org
X: @ABMPildat
YouTube: @abmpildat
Published in Dawn, December 4th, 2023
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