White Rupee vs. Black Rupee

Pakistan has a large number of ineffective anti-corruption organizations and agencies, some with overlapping functions and some without adequate powers to detect, investigate and prosecute the corrupt.

By M. Abbas Raza | March 2023

The Transparency International’s Corruption Perceptions Index (CPI) offers an annual snapshot of the relative degree of corruption by ranking countries and territories from all over the globe. The indices for 2022 reveal that Pakistan is at 140 least corrupt nations owing to lack of «rule of law» and «state capture.” The organization ranks the countries based on surveys and interviews conducted in various departments susceptible to corruption. To what extent these organizations provide data to the Transparency International is not known. However, the significance of such indices raises questions about the situation of the “level of governance and corruption,” and «rule of law» in a country. Moreover, the index would remain just a mere number unless correlated and read with the economic indicators and general well-being of the public at large.

Late Dr. Mahboob-ul-Haq, as Finance Minister, observed that in Pakistan’s economy each white Rupee is backed by two black Rupees. Economists are of the view that the ratio has now been doubled i.e., each white Rupee being backed by four black Rupees. In other words, the current declared Gross Domestic Product (GDP) of about US$325 billion is in fact about US$ 1300 billion, whereas fiscal budget and trade policy targets are based on officially declared GDP of US$325 billion. This fact is neither reflected in the economic surveys / budget estimates, nor has any organization has taken cognizance of the fact. Likewise, the budget speech for 2022-23 reveals that trade deficit is about US$ 34.70 B, whereas seventy percent of the imports are taxable and are in fact under invoiced by at least 60% of their actual value. The actual imports are no less than US$ 100 billion. As such deficit is not US$ 34.70 but US$ 63.33 billion. Thus, the foreign exchange requirement, estimated by the State Bank of Pakistan (SBP), is not for US$ 34.70 billion but in fact for the annual imports of US$ 100.00 billion.

It is alarming to note that with the advancement of political awakening in the country, the individuals in command of authority have grossly misused their powers. They have enjoyed freedom of action for misdeeds largely because of ineffective accountability and poor enforcement of law. A number of them do not seem to be amenable to any discipline. The maxim that power corrupteth a man and absolute power corrupteth absolutely has often been mentioned to describe this situation.

Not only have individuals, with the exceptions of a few misused power for their own personal ends, but political parties and groups have exercised in this country in complete disregard of all norms of equity and in violation of rules with impunity, with the result that larger sections of the people have suffered and remained materially and otherwise more or less at the stage where they were at the beginning of the history of this country.

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