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Lowering the boom

US President Bill Clinton barely escaped conviction by the US Senate after he was impeached by the US House of Representatives over the Monica Lewinsky affair. Before leaving office, Clinton entered into a plea-bargain with the Special US Prosecutor confirming he had committed perjury, accepting being barred as a result from practicing as an Attorney for five years. This compromise was to avoid further prosecution (and persecution) at the hands of his zealous detractors after he left office, or so he hoped. Unfortunately he did not do his cause any good in the last days of his Presidency by, viz (1) seeming to take more gifts and furniture from the White House than was his by right and (2) the pardoning of fugitive US commodity trader Marc Rich. Gifts and furniture are a matter of simple accounting, anything in excess can be returned or the US Government will be reimbursed accordingly, the Marc Rich pardon is more of a problem. Outgoing US Presidents have the prerogative to pardon a short list of those who seem not to have been fairly treated by the law or have served enough time in prison to justify early release. The underlying premise is that there should not be any “quid pro quo”, the pardon should not seem to have been “sold”. Marc Rich’s ex-wife Denise donated US $ 1.3 million since 1993 to the Democratic Party and US$ 450000 to the proposed “President Bill Clinton Library” in Arkansas. Clinton has shown enough resilience in the past to be nicknamed “the Comeback Kid”, but faces a bipartisan lowering of the boom by those who hate him, joined this time by some of his friends and allies aghast at what seems to be virtually a “bribe”. “Baywatch” may have run its natural course on TV, the “Clinton Years” show no sign of abating and may outlive “OJ Simpson” yet.

President Rafiq Tarar of Pakistan granted a pardon to former Pakistan PM Mian Nawaz Sharif, sending him and his close family members into royal exile in Saudi Arabia recently. While the legal grounds for a Presidential pardon for ex-PMs charged with corruption is shaky at best, the Sharif exile was done at the intersession of the Kingdom of Saudi Arabia and with all due respects we owe the Saudis much more both in word and deed than a million Sharifs put together. Will the same analogy also apply for Ms Benazir Bhutto and Asif Zardari? Which brings us to the matter of varying standards of accountability to suit different people, something that will haunt us long after Musharraf and his colleagues have ridden off into the sunset. Lowering of the boom without discrimination on all those liable is the essence of accountability. One cannot (and should not) plea-bargain with those who are clearly guilty of corruption, this will open a Pandora’s Box of problems. Those who have looted the public must have all their property confiscated, why should they be allowed to live in luxurious comfort on the proceeds of their ill-gotten gains? President Clinton was the most powerful man in the world till Jan 20, 2001. The moment President George W Bush was sworn in as President, Mr Clinton lost his Presidential immunity and became just another US citizen in the eyes of US law, fully accountable for personal misdemeanours. Such knowledge keeps rulers honest.

Governments seldom take office with evil intention, yet by the time they leave office the normal public perception is that they have helped themselves and their near and dear ones to public money, or money acquired due to the influence of public office. A majority of those involved in governance may be honest, it takes only a few adventurers with a taste for women and gold to muddy the image. The astounding part is the general public is taken to be not only naive and gullible but stupid. Such crooks would have us believe, even as they are looting the public treasures and treasuries, that nobody holier than they deserve to be on the pedestal of governance. Full control of the electronic media allows the dissemination of this message, singing their praises night and day in the same manner they sang shamelessly for their predecessors and before those predecessors, their predecessors. Using the same unscrupulous rascal as the message-maker is a bonus, his “experience” and knowledge, lack of conscience and integrity will be invaluable.

Indeed why do good intentions fail? When those who have power but no money see how easily influence can convert that power into liquid cash and assets, they succumb to temptation. This same greed afflicts those with money who acquire power, to sustain that power they have a necessity to build up their money capital. Overwhelming wealth does matter, why else would the Marcoses, the Bhuttos, the Abachas, the Noriegas, the Estradas, etc want more and more? And wait, why should a person no less than that of the President of the US risk his reputation by pardoning such a dubious character knowing him (and the act) to be controversial when hundreds and thousands much more deserving stand in line ahead of the likes of Marc Rich?

Marc Rich of Marc Rich & Co is not unknown to Pakistani business circles, mainly a commodity trader (rice, cotton, sugar, etc) he has commercial interests all over the world. The 70s and the 80s were the heyday of barter trade and countertrade, Marc Rich was active in the full spectrum. Whereas for Third World countries like Pakistan, barter and countertrade were (and still can be) effective as trading mechanisms, in fact they were misused for large-scale looting of the country’s wealth by means of exporting in kind in lieu and then skimming off in hard cash badly needed foreign exchange that should have come to the national treasury. Very briefly, Pakistan had barter arrangements with some Scandinavian and Socialist countries wherein we would sell goods and commodities to them in exchange of goods and commodities from them. However, this was not equitable, Pakistan had to give sometimes more than 20% discount on its good and commodities, without reciprocation from our “barter” partners. This discount is known in commercial circles are “disagio” and is meant to promote the sales of non-traditional goods and commodities. The “basket” from Pakistan would consist of traditional and non-traditional items. The labelling of these “non-traditional” items was done by the Ministry of Commerce’s bureaucrat gnomes who not only callously designated our cash items as non-traditional, eg mollasses, naphtha, etc. but would arbitrarily increase the percentage of traditional items in the basket, such as rice, cotton, etc to suit our “partners”. The barter countries worked through public sector commercial trading arms who in turn employed local agents in Pakistan to facilitate this trade. Sweden had the “Sukab” Barter, Finland “Kemira Oy”, Poland the Polish Barter, Czechoslovakia the Czech Barter, Romania the Romanian Barter, etc, barring the solitary exception of China, all looted Pakistan at will. Multinational trading companies of the west such as Andre & Cie (Lausanne), Marc Rich & Co (Geneva), Sucden (Paris), Ris at Denrees (Paris), Bunge & Co (Brussels), etc got into this act on a tri-lateral basis, based on their off-take from other barters eg. sugar from Cuba was sold in Pakistan in hard cash. Multinational Countertrade Companies all prospered at the expense of Third World countries like Pakistan. Their agents in Pakistan also prospered correspondingly and being cash-rich they have moved into “legitimate” business very much like the mafia. What is the difference from the mafia’s “olive oil” business and theirs? But Pakistan had to pay a very heavy price, our cash crops, rice and cotton, and commodities such as molasses and naphtha, etc were sold at discounted prices in direct competition to our own direct sales to the same destinations. The cash crops of our primarily agri-based economy thus remained under price pressure, on the average 13-18% lower in prices on the international market than what they would have got, i.e. a straight loss about US $ 350-400 million every year to the national exchequer. Not a meagre amount for a country that now looks forward even half that figure of US$ 150 million in tranches from the IMF and in return raises the price of gas, electricity, etc to the detriment (mainly) of the already destitute common man and in extension, the economy.

Please do excuse me if I have no great sympathy for the likes of Marc Rich, or for that matter their surrogates living comfortably rich in Pakistan. Today they may be legitimate, they have done so at the expense of this country, driving more and more of the desperately poor way below the poverty line. Unfortunately they continue to thrive on friends made in high places on the strength of their money and affluence, wealth being a great camouflage of character and integrity. One day there will be someone who will talk less about lowering the boom on them but will actually do more, the boom being presently lowered rather selectively. That is Pakistan’s major problem, we tend to apply accountability whimsically based on who is a “friend” and who is considered a “foe”, not the way it should be carried out, across the board starting from the top and sparingly. One can only catch some of the people in a short time. Why not concentrate on casting the net only for the big fish?

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