The Unholy Nexus-Economy, Corruption and National Security
A confidential informal note about Pakistan dated May 22, 1996 being circulated in the World Bank asserts that there will be, quote “a significant shortfall in government revenues this year of around Rs 13 billion (0.6% of GDP), and financing of the budget deficit has been far in excess of target (indicating a larger fiscal deficit than targeted under the (IMF) Stand-By Arrangement (SBA). Meanwhile, the level of official reserves has been kept from falling below $1.5 billion (7.4 weeks of imports compared to 13 weeks last June) by short-term borrowing and build up of foreign currency accounts, a sudden outflow could in turn result in serious problems in the banking sector. It is critical that the government move immediately to take the necessary revenue and expenditure measures to reduce the fiscal deficit and accelerate the pace of structural reforms in the context of 1996/97 budget” unquote, far removed from the rosy picture being painted by the likes of VA Jafarey and Qazi Alimullah.
People generally fail to comprehend the full co-relation between economy, corruption and national security, an unholy nexus that needs constant monitoring by responsible functionaries, concerned citizens and a free Press. Siphoning of funds from contracts, either in form of kickbacks or by lowering of the quality of work, commissioning white elephant projects at exorbitant prices, this is the domain of interests that have only greed as a motivation. Commission agents in the field of defence purchases are only exceeded in their disservice to the nation by the manipulations of “consultants” in league with corrupt individuals in the international finance institutions. The objective of foreign manufacturers is (1) to make a sale (2) at the highest price (3) to keep on selling more equipment and spares. To achieve their objectives foreign manufacturers employ local commission agents who help in making the sale by (a) using their influence with decision makers (b) ensuring the highest price and (c) acting as conduits for illegal gratification whenever necessary. An important chain in the link is the friendly banker who arranges the transfer of these illegal funds to safe havens without attracting attention. This money laundering role was previously supposedly the domain of the now defunct BCCI, supposedly facilitating the illegality of corrupt leaders and drug barons, visibly this role has been taken over by foreign banks in Pakistan, the lead being taken by one bank of US origin. The so-called consultants lobby against any indigenous production as this would terminate the gravy train of their recurring commissions. The amount of commission depending upon the volume of sales, local agents and their functionary collaborators actively work towards this objective. To acquire information about the requirements of their potential clients as well as their competitors, these agents also do intelligence work of sorts for their Principals, which can be very dangerous as this may come to the attention of those who may or may not be in love with Pakistan. Precious foreign exchange is diverted in sectors without as high a priority as others despite alternatives being available at much less cost. Project construction for every MW of electricity is roughly less than US$ 1 million. When privatising Kot Addu we are receiving about half that amount (US$ 800 million for 1600 MW) but why are we paying almost double the amount (US$ 1.8 billion for 1200 MW) for the Ebrahim Elawan-sponsored Hub River project, adding to the compound indebtedness of the people of Pakistan? The proposed purchase of Mirage 2000-5s can be taken as a real situation to explain the ramifications to readers.
