A Matter of Social Conscience
Profit generation is the essence of any commercial enterprise, the actual percentage varies greatly from business to business. The minimum return expected is 15%, around 25% profit is considered to be a very healthy return. A return on investment of more than 40% per annum is exorbitant, in Islam there are specific injunctions against usury and profiteering. However, that is the way of the modern world of commerce and enterprise, the making of exorbitant profit is now the done thing to survive as successful business entities.
Commencing a year or so after the 1977 Martial Law, there have been three distinct periods when the general public have been fleeced of their hard earned savings by the temptation of receiving a guaranteed high interest. This exploitation has been possible by the unscrupulous because of a number of reasons, not the least among them the enormous black money in kickbacks in the hands of government servants, the repatriated funds of our expatriates and the commuted pension of our ex-servicemen and other pensioners on retirement. This has been further bedevilled by the wide gap between the lifestyles of these aforementioned categories in the villages, towns and cities in Pakistan and their less fortunate neighbours, leading the neighbours to aspire for quick returns to keep up with the Joneses next door.
This aspiration of the general public for quick profit was a heaven-sent opportunity to the God-less, looking to exploit ignorance and greed to their unholy benefit. The tactics used did not require any great genius, more shocking has been the knowledge that the nouveau riche, the middle class and pensioners are so gullible (and so greedy). The sponsors of the finance companies had no intention of doing honest business, they very well knew that in this day and age, a constant generation of interest as high as 40% (or more) was impossible.
This “pyramid” game has been played with only one deadly purpose, to defraud the unsuspecting and the innocent, it being taken for granted that the clever and the cunning would not be that foolish. As such, the victims have been relatively harmless people who find themselves twice bitten, sustaining injury due to losses of their capital and embarrassed in looking like dumb clucks.
The fact that the perpetrators of this fraud had premeditated mala fide intentions is an important consideration when deciding upon their punishment. This scam has now happened thrice and at least twice has been the subject of investigation. One must wonder why no one was ever brought to book, leading to the conclusion that the culprits were quite rightly confident that they were immune to any enquiry or prosecution. There was substantial blatant evidence on record, there being so many victims that it would have taken blind men not to notice the malfeasance. One can only conclude that the “catchers” were paid to ensure that the enquiries remained inconclusive. Before attempting another enquiry unto the latest round of financial scandal, one must investigate which of the investigators were involved in earlier enquiries and ensure that they are not in a position to influence future enquiries, the catchers must first be put into the rye.
Various newspapers and magazines have recently come out with fantastic figures of loans obtained by senior political personages of the present Government from the defaulting cooperative finance companies. One must caution here that the taking of loans from the cooperative finance companies does not necessarily constitute a crime by itself but on the other hand these cooperative finance companies have certainly committed a crime by acting as a lending institution in clear violation of the Banking Laws. As such there is prima-facie evidence of misdemeanour against them. Next, we must establish is whether the cooperative finance companies gave the loans on a fixed interest-basis to the recipient of the loans, this would be contrary to Islamic Laws, usury being taken as an unacceptable crime in Islam. In the last stage, an internal audit can disclose whether the interest being given to the depositors was in excess of the interest being obtained from the loanees. If so it would mean that a favour was being done to the recipients of the loan as a barter for some government consideration, it would be a “smoking gun” pointing to fraud on the part of the finance company, mala fide intentions and misuse of government authority on the part of the recipients of the loans.
While any enquiry must be a due process of the law, the state of disappointment, mental anguish and frustration among the affected has led to social disorder of sorts. A large number of people who put their money into these deposits are ex-servicemen and civilian pensioners, almost 90% of them are of the junior-most cadre. Tempted by the dangling of publicised disclosures of regular high profit gains in front of them by motivated (and even innocent) persons in each village, town and city locality, people rushed to deposit their life-savings to take advantage of this largesse from heaven. While this scam was going on, the intelligence agencies surely must have fed information up the ladder to the highest reaches in the land. It had become common knowledge that a major fraud was in progress and their silence seems increasingly like abetment. For those in power this is the third time that lightning has struck while they have been in positions of power.
The question arises, why was nothing being done to stop this great scandal? Those who are the guardians of the law have a special responsibility to society, that some of them may have become entangled in this morass, whether advertently or inadvertently, is inexcusable and raises another question, that of the level of morality in the exercise of administrative responsibility. Unfortunately, the fingers point to culpability on one or more issues and erosion of confidence in their credibility to deliver justice according to the laws of the land.
To compound all this, instead of bringing the errant companies to task, there are rumours of an attempt being made to bail out these fraudulent finance companies by massive infusion of funds from the nationalised and newly “privatised” banks directly and indirectly. This is not only throwing of good money after bad, it is denuding the entire banking system in Pakistan of liquidity at a crucial period in our economic life. It is not being done in the public good but in the individual good to save individual financial empires and individual positions of authority in the Government. One must repeat here the taking of loans for commercial or industrial use is not a crime by itself but the cover-up of what has become common knowledge is raising questions about the propriety of how such loans were disbursed, on what considerations and the way they have been utilised.
The Constitution is a much maligned document, what happens in the Assemblies only gives credence to this fact. One must go back to the basic laws of the jungle, might is right and survival is of the fittest. But is our society so degenerated that we have resorted to a hapless state where we give loyalty to a document while every clause in that document is subverted at will by those entrusted to preserve it? The lawless have an uncanny ability to subject neighbours in their locality to their will through their “enforcers”, the penchant of law enforcement agencies not to take cognisance of the financial fraud makes them the equivalent of those “enforcers”. Today, crime is endemic through the organs of the State, the people who matter do not show any hint of contrition, where and when will they ever show any mores of social conscience?
It is easy to hold forth about moral platitudes but it is difficult to apply the same standards to the ethics of good government. The cooperative finance scandal has been made a political issue when really it is inherently a social happening that has devastated almost 2% of the population directly and 10-12% indirectly. While it is the responsibility of politicians to exercise their prerogative of check and balance to enforce the law, politicking for partisan benefit where the law is discriminatory is being unfair to the electorate. This major socio-economic problem needs to be handled with care so that the losses of the victims are minimised. Maturity in political thought is necessary to ensure that a bipartisan committee of politicians examine the wider implications and devise means to come to the succour of the affected.
Three years ago, we were apprehensive about the advent of the Medellin Syndrome in Pakistan, justice in Colombia had been so subverted that the lawless almost became the law of the land. The law enforcement agencies had been bought over, uncooperative city officials were murdered, even two justice ministers were assassinated. Through it all, the Army remained comparatively untainted. Because of their on-going war against communists guerillas, they even glossed over wrongdoing by the drug warlords because of the aid given by them to the Army. Yet it was the Army that ultimately formed the backbone in the fight against the “Unextradibles”, as the all-powerful drug warlords became known. The war has been barely won in Columbia at great human and material cost, such a situation is very much now a possibility in Pakistan, not only due to drug dealing and the collaboration of those in position to interdict this awful trade but also because of financial shenanigans. White-collar crime is now of great concern to the people of Pakistan. Knowing that most of the victims of the scam were brother ex-servicemen must be agonising to those in uniform, ultimately they will be faced with the choice of whether to go the route of their conscience or the wording of the Constitution. One hopes that better sense will prevail before such a crossroads leads to an eventuality that becomes a point of no return.
The Finance Minister of Pakistan, Mr. Sartaj Aziz, needs no certificate as to his honesty and integrity. That he is the finest incumbent of the office is now a stated fact. The present scandal is going to test his social conscience as it is his responsibility to the nation to bring the recalcitrants to book or as befits any man of morality, he would certainly have to consider the final option of (Japanese Finance Minister-like) resigning his responsibility if he cannot solve this problem, either because of fear from the oppressors or the lack of ability to do favour to the oppressed.
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