Capture and corruption

Inclusive and participatory governance operating transparently is a prerequisite for the just and equitable progress of any nation. When everyone has a voice, policies and practices are more likely to reflect public needs and remain anchored in accountable oversight for the common good. Societies that count on and draw their collective strength and legitimacy from their people reap inclusive benefits for all citizens.

However, those that operate in defiance of, or under false façades of, legitimacy cultivate disproportionate and lopsided development, providing the powerful with an unbridled stake to affect policies and practices in a self-serving manner. This system of exclusion largely tames and empowers a narrow class of oligarchs who seize, retain, sustain, and regain all their stakes through deception, evil alliances, manipulation, misappropriation, or other facets of corruption. Pakistan, unfortunately, is rarely alien to this pattern.

The extractive and exclusive nature of our society has been evident throughout its history and is, lately, most starkly visible in the growing socio-economic stratification. Today, nearly half of the population grinds in poverty; 26 million children between the ages of 5 and 16 are out of school; millions are engaged in child labour or are malnourished. Moreover, the burgeoning population, accelerating human and capital flight, resurging criminality, lack of an investment-friendly environment, skyrocketing inflation and growing unemployment, all afflict the people almost with impunity. One might question: what sustains or adds to the poor's deplorable plight? The grim reading of resource capture is suggestive in this regard.

Oxfam, in its report "An Unequal Future: Asia's Struggle for Justice in a Warming, Wired World", states that the wealthiest 10% capture 60 to 77% of national income in the region, while the poorest are left with only 12 to 15%, and the top 1% hold nearly half of all resources. The report further notes that in Pakistan, the richest 12% hold 42% of the national income. The answer to the question of where this capture of wealth in the country is rooted lies in impunity, tolerance and a carefully cultivated, selective tolerance for corruption. According to the recent IMF diagnostic report, 5.3 billion siphoned off over the past two years has been recovered. This excludes amounts usurped through plea bargains, as well as 'permitted', immunised, and unreported corruption. The real cost of this corruption, as the IMF suggests, is the loss of 5 to 6.5% in potential economic growth.

The report identifies elite capture as an entrenched problem in Pakistan, where a small group of elites wield disproportionate and undue control over state institutions, shaping policies, regulations and resource distribution in their own interest. The incumbent government has gone much further than its predecessors in trying to sustain itself, regardless of the cost to the economy, polity and the people. For instance, institutions meant to check the misuse of power and the national exchequer have largely been neutralised or rendered complicit in this capture.

Accountability has largely been reduced to a political tool today: the judiciary has been completely captured in the aftermath of the 26th and 27th Amendments; the media has been silenced, dissent stifled, and transparency, merit and competence almost entirely overruled by corruption and connections. In this way, the system focuses on reinforcing elite capture and further entrenching its tentacles by subduing checks, independent voices and institutions.

In the midst of the ossified capture and corruption, the IMF's 15-point reform agenda on governance, fiscal management, anti-corruption, market regulation and investment, as well as rule of law and judicial reforms, offers a much-needed solution to malignant capture and corruption.

However, the incumbent hybrid dispensation, largely erected on by capture and sustained by corruption, is unlikely to dismantle its own interests and itself for the people. Would it?