White Rupee vs. Black Rupee

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.

Even the IMF, in the recent talks, had serious reservations and observations on the declaration of assets of the bureaucrats and others kept in and outside the country. The IMF also raised questions on the working of the National Accountability Bureau (NAB) and the Federal Investigation Agency (FIA) with emphasis on their overlapping functions and their role in eradication of corruption and corrupt practices.
Corruption has shattered all moral values and disbalanced all equilibriums of the economy and the society and has resulted in

• low economic growth,
• unmanageable soaring domestic and foreign debts,
• poor domestic revenue mobilization, currently about 9% of the declared GDP,
• depleting foreign exchange reserves and depreciating Pak Rupee,
• dwindling exports,
• slackness in industrialization,
• constricting direct foreign investment,
• increasing unemployment, and
• ruthless artificial hyperinflation, the killer of values, which is acquiring snowball effect.

No government has so far come up to formulate a fool proof strategy to take the country out of the morass. If governance is not improved with the enforcement of rule of law and corruption and mismanagement continues unleashed and unchecked in government departments the country would soon become an unmanageable state.

Somebody very rightly said that why does one not touch a live electric wire, because the punishment of violation is there and then on the spot. Lack of rule of law and effective accountability are the basic reasons for bringing the organizations to such a crippled state. 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. Instead of controlling corruption, these organizations have themselves become corrupt and are facilitating corruption.

One exclusive function which makes the NAB different from other anti-corruption organizations is the Section 33 of the NAB Ordinance 1999 which assigns the basic function of improving governance and implementation of the rule of law in the country. The Section requires the NAB to disseminate information on detrimental effects of corruption, examine the laws and rules and regulations in force relating to the practice and procedure of various ministries, departments of the federal and provincial governments, statutory or other public sector organizations and the conduct of the public office holders. Apart from one or two instance, NAB’s Annual Reports are silent on any contributions made to the system in terms of the Section 33.

God knows better; one can only, however, hazard an opinion that, after the advent of Islam, the rule of good caliphates and benign rulers in the Muslim world came to a rather early end because the rulers did not continue the system of administrative and public accountability, implementation of the rule of law and good governance. The lack of a well-organized and fool-proof system of accountability was also one of the reasons why the administrators of the Muslim world could not continue the Islamic way of life in its entirety.

Only a widespread improvement in governance and strict enforcement of the rule of law followed by an across- the-board system of accountability which covers all spheres of life, will apparently take this nation out of the morass.