The first day of a recent meeting of the “Partnership Against Corruption Initiative” (PACI) of the Geneva-based World Economic Forum (WEF) discussed among other subjects, “Communicating the Anti-corruption Message,” “High Priority Compliance Challenges” and “Collective Action”, and on the next day, “Global Threats and Trends” and “National and Regional Perspectives on Anti-Corruption” (my contribution as one of the speakers).
A clear distinction must be made between the vast majority of corrupt (about 95%) who comprise the “needy” and the relatively small percentage who make up the “greedy” (less than 5%). Unfortunately it was duly noted that the greedy siphon off more than 95% of the illegal money. Forced by economic circumstances into corruption, the needy struggle to put food on the table for their families, pay their rent, electric, water and children’s school fees, medical bills, rickshaw and bus fares, etc, the only silver lining is that almost 100% of their illegally acquired money goes back into the country’s economy. There is no limit to the appetite of the greedy for robbing the country, most of their money is stashed abroad, shoring up the economy of a first world economy. Where would real estate prices in London around Hyde Park be without massive Pakistani “investment” in luxury apartments? Within the country, other than the essentials, the amount the greedy spend on luxury items (e.g. “Berkin” ladies handbags range from US$15000 to US$ 50000 each) are mostly imported. Any lady without a Berkin in Pakistan’s elite society is a “nobody”, that has spawned a thriving fake “Berkin’s” market!
Notwithstanding the necessity for controlling corruption in the third world, the actual problem lies in the first world failing to implement the laws of their land. Most illegal money travels to US and EU countries, considerable sums flow to newly emerging countries in Asia, quite sizable amounts go to China. Despite a definite commitment to put in measures to eliminate corruption and their capacity to eliminate money-laundering, the west seems to waiver more frequently than not, fairly to practice what they preach. Criminals require official documentation to legitimize their illegal money, drug dealers use all sorts of mechanisms to make their illegal money look like emanating from legal means. Money-laundering is intended to create that impression about dirty money. Small scale schemes are impractical when illicit earnings run into billions of US dollars, generating a paper trail of receipts, legitimate businesses make an excellent camouflage as a conduit for such money. Their ability of faking transactions make them the targets of acquisition by the corrupt.
In the forefront in the fight to eliminate money-laundering, UK’s commitment is undercut by lax corporate rules making it an attractive destination for global organized crime, as many as 19 UK-based front companies are currently under suspicion of money-laundering. The entitlement of company directors to secrecy under UK law hinders attempts to identify the really big criminals. To quote Jim Armitage, Deputy Business Editor “Independent”, “front companies in the UK are at the heart of an investigation into one of Europe’s biggest money-laundering operations, allegedly forming part of a conspiracy to make $20bn (£12.5bn) of dirty money look legitimate. These funds come from major criminals and corrupt officials around the world wanting to make their ill-gotten cash appear “clean”, so they can spend it without suspicion.”
With political parties surfing the anti-elite anger sweeping the developing world. Imran Khan and Maulana Tahirul Qadri’s prime accountability message has set off a populist surge in Pakistan. Given freedom of action for some time, Gen Musharraf’s National Accountability Bureau (NAB) gave the country substantial anti-corruption dividend. Germany’s Commando Extraordinary Col Otto Von Skorzeny correctly opined “politics is the soldier’s curse”, within 2 years the trappings and “percs” of office got to our “commando”, getting the urge for “democratic legitimacy” Musharraf compromised on accountability (21 members of Prime Minister Zafarullah Khan Jamali’s “democratic Cabinet” in 2002 were under National Accountability Bureau indictment for corruption) and his own credibility. The stated objective of every military regime is to eradicate corruption, they soon become part of the system they came to eliminate. Thailand’s recent coup leader Gen Prayuth Chan-ocha has run into problems in the military’s planned campaign against corruption, cronyism and money politics. Backed by many of the very people such measures would target, could alienate some of the core support of the Thai military junta.
A weekly review by NAB of possible anti-corruption cases must give maximum weightage to targetting the “greedy” ones on priority basis with no holds barred. The needy ones should be dealt with by the Provincial Anti-Corruption Departments, etc (within a similar mechanism for the Federal employees), a NAB Committee must regularly monitor the progress of the cases. NAB will thus get time to pursue the “greedy” ones.
Interacting with acknowledged professionals in the anti-corruption and compliance field, the well organised and well-crafted PACI event in Geneva was very educative. “Chatham House” Rules restrict me from naming or quoting the experts. Confident about the blueprint in the first world about how to tackle corruption, they are on less sure ground on how to tackle corruption at its origin in the third world. Continuing inter-action with experienced capacity on the ground is required.
The manner and method of the accountability notwithstanding, corruption is corruption, whether by the “needy” or “greedy”. The masses of the developing world desperately require accountability to be an ongoing process.
The writer is a Pakistan-based defense and political analyst. He can be contacted at firstname.lastname@example.org