Perhaps one of the worst attributes of modern Pakistani political discourse is virtually an absolute lack of a sense of proportion and a cavalier attitude towards accuracy — and plausibility — of numbers. One of the most outrageous numbers being thrown around these days is that the Pakistani elite has somehow stashed $200 billion in illicit money in private banks in Switzerland. This is the sort of outlandish theory that would have made the Russian Tsar’s secret police proud.
Let us put this number in context. Pakistan’s GDP last year — the total value of all goods and services produced in Pakistan in that year — was $231 billion. The total amount of tax collection last year was roughly $20 billion. How believable is it that the total amount of ill-gotten wealth stashed in Switzerland alone is nearly equal to the entirety of Pakistan’s economic production and ten times that of its tax collection? Does this at all sound logical?
The Swiss ambassador to Pakistan has politely expressed his puzzlement as to where this number comes from, because the Swiss government is certainly not aware of its origins. The Swiss central bank publishes numbers every year that list how much money in its banking system is owned by foreign citizens and it breaks down the numbers by citizenship. The latest available number for Pakistan is roughly equal to $1.3 billion. How much of that is legal or illegal wealth is not known, but that number does not sound like a lot. To put it in context, that number would not even cover six months of electricity subsidies in Pakistan.
What disturbs us much more than the lunacy of the number is the thinking behind it: that somehow Pakistan’s economic problems can magically vanish if we could just manage to procure an obscenely large sum of money from abroad. This kind of thinking ignores that kind of sclerotic institutions that make wealth generation from within the country so difficult. Pakistan is not poor because rich countries have not given it more aid or because our elite have stashed all the money in Swiss banks. We are poor because we stifle creativity, opportunity and economic freedom through poorly designed institutions. If we can fix those, we will not miss any money that has been siphoned away in banks abroad, no matter how big or small.
Published in The Express Tribune, August 28th, 2014.
COMMENTS (5)
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Its not just about cash no more, they invest. The own billions of illicit property, industries & companies, which is what they actually refer to when they point to the $200 billion dollars. Which is way above $200 billion.
"The Swiss central bank publishes numbers every year that list how much money in its banking system is owned by foreign citizens and it breaks down the numbers by citizenship. The latest available number for Pakistan is roughly equal to $1.3 billion."
Great data point! Some simple research is all took in this case to rubbish Dar's pathetic attempt to divert attention from his government's political woes. Dar used to be an accountant; it hardly reflects well on him that he's this careless with numbers.
In case readers missed it, this appears to be an oblique reference to the Protocols of the Elders of Zion, an antisemitic calumny forged by the Tsar's secret police in the 19th century which still lives on today and has even been enshrined in charters of anti-Jewish terrorist groups like Hamas. Because when your enemy has committed no heinous crimes then the easy thing to do (if you lack conscience) is to make some up to justify your enmity to others.
This amount was mentioned by Dar, Finance Minister. What he wants to achieve by quoting this outlanding theory to distract people from the turmoil country is facing and divert it to old Zardari bashing habits of MLN and Chaudry Iftikhar. I do not think that will help. I agree the amount of $200 billion is nothing but a joke.
One of the sane voices but looks like nobody is reading or commenting. We lie and listen to lies so much that it becomes the truth. We believe in everything that is not right and when the truth is presented we refused to hear it and condemn it without any logic. 200 Billion $ in just one country, if you add all other banks like UK, Mideast, Caribbean and north American then this amount should be in $ trillions. If all the wealth of Pakistan's history is accumulated it is still not going to be that much. The funny thing is Gen Ayub, CJ and Gen Zia;s families became billionaire while they were on salary all their lives but nobody discusses that anymore. It is only men without the uniform that can be discussed and rumored about.