Daily Times

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 the corrupt (about 95 percent), who comprise the needy, and the relatively small percentage that makes up the greedy (less than five percent). Unfortunately, it was duly noted that the greedy siphon off more than 95 percent 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, electricity, water and children’s school fees, medical bills, rickshaw and bus fares, etc. The only silver lining is that almost 100 percent of their illegally acquired money goes back into the country’s economy. There is no limit to the appetite of the greedy in 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. the Birkin ladies handbags range from $ 15,000 to $ 50,000 each), mostly imported, is mind boggling. Any lady without a Birkin in Pakistan’s elite society is a nobody, spawning a thriving fake Birkin 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 the US and EU countries, considerable sums flow to newly emerging countries in Asia and quite sizeable 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 unable to practice what they preach. Criminals require official documentation to legitimise their illegal money and drug dealers use all sorts of mechanisms to make their illegal money look like it is 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 dollars. Generating a paper trail of receipts, legitimate businesses make an excellent camouflage as a conduit for such money. Their ability of faking transactions makes them the targets of acquisition by the corrupt.

In the forefront in the fight to eliminate money laundering, the UK’s commitment is undercut by lax corporate rules making it an attractive destination for global organised crime; as many as 19 UK-based front companies are currently under suspicion of money laundering. The entitlement of company directors to secrecy under the UK law hinders attempts to identify the really big criminals. To quote Jim Armitage, deputy business editor of The 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 $ 20 billion (£ 12.5 billion) 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’s and Maulana Tahirul Qadri’s prime accountability message has set off a populist surge in Pakistan. Given freedom of action for some time, General Musharraf’s National Accountability Bureau (NAB) gave the country a substantial anti-corruption dividend. Germany’s Commando Extraordinary Colonel Otto Von Skorzeny correctly opined: “Politics is the soldier’s curse.” Within two years the trappings and perks of office got to our ‘commando’; feeling the urge for “democratic legitimacy”, Musharraf compromised on accountability (21 members of then Prime Minister Zafarullah Khan Jamali’s democratic cabinet in 2002 were under NAB indictment for corruption) and his own credibility. The stated objective of every military regime is to eradicate corruption, but they soon become part of the system they came to eliminate. Thailand’s recent coup leader, General 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 target, it 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 targeting the greedy ones on a priority basis with no holds barred. The needy should be dealt with by provincial anti-corruption departments (within a similar mechanism for the federal employees) and a NAB committee must regularly monitor the progress of these 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 educational. Chatham House (a think tank) 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 interaction 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 in the developing world desperately require accountability to be an ongoing process.

The writer is a defence analyst and security expert