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Economy Editor Picks Politics

Creeping Coup In The Offing?

Muhammad Ziauddin in this article is trying to help PTI government trace the borrowed billions. They were utilised in expanding the GDP, fighting the war on terror, adding electricity to the national grid and, of course, keeping the currency artificially overvalued. But how did the COAS find a seat on the National Development Council, he wonders.

Prime Minister Imran Khan’s desire to continue governing from the container as he probably does not like the democratic obligations that go with governing from the PM secretariat seems to have come in direct clash with the establishment’s desire to see the ruling PTI graduate out of its opposition mode and get on with the job of governing. Therefore, the out of the blue agreement between the government and the opposition to conduct the budget debate in relative peace. The same agreement seems to have also resulted in the National Assembly Speaker issuing the production orders for Asif Ali Zardari and Khawaja Saad Rafique.

That it was all managed by the establishment is evidenced by the fact that no production orders were issued for Ali Wazir and Mohsin Dawar, the two MNAs from erstwhile fata region, who the establishment alleges are working for our external enemies. But so far the establishment has failed to get a verdict of its liking from a court of law against the two. And the continued foot dragging on the issue by the NA Speaker would certainly be seen as denial of the rights of thousands of the voters who voted for Ali and Mohsin to be heard in the NA on the crucial issue of national budget which has the potential to affect, one way or the other, the economy of the entire region belonging to these voters.

In his opposition mode the PM had virtually voted against his own government’s first full year federal budget by speaking at almost midnight on the same day that it was presented to the National Assembly, on everything under the sun except in defence of the just announced budgetary proposals.

Next, he has set up a commission as per his announcement during the speech, to investigate where have all the billions borrowed during the last ten years gone. And he has also set up a National Development Council (NDC) which would function under his own chairmanship with the Chief of Army Staff (COAS) General Qamar Javed Bajwa sitting in as one of the members.

Numbers Game

The opposition has already rejected the budget and declared that it would do the needful to have it rejected by parliament. However, on the face of it and on paper as well the government has the numbers to get the budget passed on the due date as even with BNP-M’s four votes going over to the opposition the PTI-led coalition government would be able to edge out the opposition by as many as 24 votes in case of a division.

The PM has doubly ensured that the seven votes of the MQM would be cast in favour of the budget by promising the Muttahida one more seat in the federal cabinet besides the two it already enjoys – one (Information technology) of which is with Khalid Maqbool Siddiqui and the other (Law) is being looked after by Farogh Nasim. The five votes of the PML-Q and the three of GDA have nowhere to go except with the government because the former is bitterly opposed to the PML-N in the Punjab and the latter is equally hostile towards the PPP in Sindh.

The one vote of All Pakistan Muslim League of Musharraf is guaranteed to be cast with the treasury members. This takes the final count to the winning number of 172. Therefore, even if the three votes of BAP go over to the opposition in a bargain to re-secure the Party’s Senate Chairmanship the government still gets the budget passed with a vote or two in spare.

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Tracing The Borrowed Billions

Now let us take up the issue of ‘where the borrowed billions have gone?’ Well, a part of these billions has certainly gone into servicing and amortising the past debts. This has been happening since the last days of General Zia. Remember when he died in an air-crash our kitty was totally empty? We had to pledge one of our cash crops in a foreign bank as collateral for an emergency loan and the then interim finance minister Dr Mehbubul Haq had to rush to the IMF for an emergency bail-out.

Next, according to Stockholm International Peace Research Institute (SIPRI) Pakistan ranks 10th in the global list of arms purchasers. And unfortunately since long we are also in a kind of arms race with India which tops the global ranking of weapon purchasers. A recent AFP report quoting SIPRI had also said that all nuclear weapon-possessing countries are modernising these arms, and China, India and Pakistan are also increasing the size of their arsenals.

Borrowed dollars were also spent indiscriminately to keep the exchange rate plugged to an artificially high value during the period when Ishrat Hussain was the governor of the state bank of Pakistan as well as when Ishaq Dar was the finance minister of the last PML-N government.

Part of these borrowed funds were also used in the wars that we fought over the last ten years – the war against the TTP and those that we fought against terrorism like Zarb-i-Azb and Raddul Fasaad.

And by the way, in the last ten years, Pakistan’s GDP has expanded to $300 billion from $171 billion in 2008, reflecting an extraordinary spell of investments during this period, obviously explaining where part of the borrowed billions has gone.

And there is no way one can get the right figures for the amount that was spent out of the borrowed dollars during the last five years to expand the power generating capacity in the country which is said to have added 11,000 MW of electricity to the national grid. Indeed, today we have more generating capacity than the actual demand. But because borrowed dollars were used to add to the generating capacity, the output is decidedly too expensive.

This is a rough list of the items on which the borrowed dollars were perhaps spent. It is not a complete list. But this is not to say no corruption took place in the last ten years or for that matter part of the borrowed dollars did not slip through the fingers into the private coffers of the handlers and implementers.

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Deadly Combination

Indeed, there is no way one can keep corruption out when one is dealing with the combination of free market economy and democracy. Of course, as they say democracy is the worst form of government, but all other forms are said to be even worse. Like-wise according to Milton Friedman’s Chicago School of thought there is no better economic system than the one facilitated by the free-market. In this system ‘greed is good’, ‘small (government) is beautiful’ and ‘it is not the business of the government to be in business’. This combination of democracy and the free market makes it almost impossible to keep corruption out. That is why inequality expands by leaps and bounds in such a politico-economic environment.

The only way one can keep corruption to the minimum in such a milieu is by strictly regulating the market using statutory bodies independent of the executive and on the other hand keeping a tight leash on democracy by using social regulators, such as a truly independent judiciary, a genuinely fearless press and a really strong parliament.

However, instead of looking at the menace of corruption from this angle and trying to combat it with the regulatory weapons that have already been tried and tested with great success in many countries at various times, the PTI-led coalition government has been giving the impression, since it came to power, of being a team of Boy Scouts on a treasure hunt after school hours!

Treasure Hunt

As it entered the power corridors, the ruling PTI actually believed that billions would start flowing into the official coffers immediately because of the reputation of the Kaptaan – being a man of highest integrity and credibility. When this did not happen, the government began counting on the NAB, hoping that all those being arrested by the Bureau would soon start coughing up the billions that they were alleged to have gobbled up from the government treasury. When this too did not yield the desired results the government set up what is called the Asset Recovery Cell and sending its chief Shahzad Akber, Special Assistant to PM on Accountability, to foreign lands looking for the laundered money and bringing it back.

But this too has not worked so far because it is not that easy to prove that such and such dollar or the property owned by a Pakistani abroad was actually tainted Pakistani wealth. And even if some of it was traced as having been made fraudulently in Pakistan and laundered out, it would take years proving it to be so in the courts of host countries. And even if we win some of these cases, it would take another decade or so to get the amount transferred to Pakistan as no host country willingly parts with the billions in its banks or assets on its soil just because of it being legally declared to be tainted.

When it was found that ARC is not bringing in the promised billions, an amnesty scheme was announced. But with only one week to go before its deadline expires only about a little over 500 persons are said to have sought to benefit from the scheme yielding so far no more than a billion dollars.

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NDC

The most intriguing part of the plethora of new policies announced by the government in the last ten months or so is the establishment the other day of the National Development Council (NDC) to be chaired by the PM with the COAS sitting in as member.

This kind of a national body has been formed for the first time in the country in which the army has been given representation.

Other members of the NDC include Foreign Minister Shah Mehmood Qureshi, Adviser to the Prime Minister on Finance Dr Hafeez Shaikh, Minister for Planning and Development Khusro Bakhtiyar, Adviser to the Prime Minister on Commerce Abdul Razak Dawood, all provincial chief ministers, AJK prime minister, Gilgit-Baltistan chief minister (to attend on invitation) any additional minister/head of strategic body, secretary to the prime minister, secretaries of foreign affairs, finance and planning division and additional secretary of the Prime Minister Office as secretary to the NDC.

According to the terms of reference (ToR), the NDC will formulate policies and strategies for development activities aimed at accelerating the economic growth, approve long-term planning for national and regional connectivity and provide guidelines for regional cooperation. Its terms of reference were not limited to the same mentioned in the official notification.

We already have a number of civilian bodies including the Planning Commission of Pakistan (PCP), the National Economic Council (NEC) as well as the Council of Common Interest (CCI), the Economic Committee of the Cabinet (ECC) etc. All of these are supposed to formulate policies and strategies aimed at accelerating the country’s economic growth and approve long-term planning. So, why do we have one more organisation doing the same job?

However, if approval of long-term planning for national and regional connectivity and providing guidelines for regional cooperation are also to be part of the NDC’s ToRs, then one can see the logic of establishing a new organisation for a specific purpose as well as the logic of the COAS sitting in as one of the members.

The specific purpose of the NDC appears to be setting up of one single window for processing all decisions, including the relevant security issues pertaining to China-Pakistan Economic Corridor (CPEC), issues related to establishing trade and economic links with the Central Asian Countries via Afghanistan as well as negotiating peaceful settlement of all issues with our Eastern neighbor and to establish mutually beneficial trade and economic relations with India.

Since the Army controls our defence and foreign policies, especially those that relate to India, Afghanistan, China and the US, it was but natural for the defence institute to be invited to sit in the NDC that is being touted as the highest decision making body concerning issues that matter to the Army.

One would, however, like to know whether the elected government invited the Army to join the NDC or was it the other way around. And if it was the Army that invited itself to join the NDC, then perhaps a creeping coup seems to be in the offing.

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Muhammad Ziauddin

The author is a senior journalist and editor.

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1 Comment

  1. Zia Hashmi June 22, 2019

    Excellent. I can’t believe someone is working so hard to put together so much relevant information, data and insights to present an outstanding overview of a given major national issue. I have no doubt this platform is soon to become the most sought after place where one can find the most comprehensive, qualitative and credible analysis. Bravo!

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