With the Memogate dud finally fizzling out and the hearing on contempt charges against the PM not set until next week, it promised to be a slow news week. Right on cue, the old reliable story of corruption is back in the headlines again, at least at one media group. The latest headlines, though, are almost comical and may do more to harm than good the cause of exposing corruption.
The latest series of stories began last weekend when Ansar Abbasi reported for The News that “Pakistan has lost…more than Rs8,500 billion…during the last four years”. Abbasi’s source, for once with a name, is none other than Transparency International Pakistan (TIP) Advisor Syed Adil Gilani giving the claim some credibility. But the numbers quoted, rather than giving a clear view of corruption, actually provide a confusing and convoluted picture of the so-called “corruption”.
After several paragraphs of condemning statements, Abbasi finally gets to some hard numbers. But what readers are presented with are not cases of government officials pocketing money or steering it to their cronies. Instead, we are told that “circular debt is Rs190 million”, “state-owned enterprises like PSO, PIA, Pakistan Steel, Railways, SSGC, SNGC are eating away Rs150-300 billion per annum”, and “tax to GDP ratio in 2008 was 11%, which in 2011 has reduced to 9.1% instead of being increased”.
Economists can debate the proper level of circular debt and whether the government should own enterprises like airlines, railways, etc. But this is not corruption. Neither is the tax-to-GDP ratio. According to Abbasi, “this the drop of 1.9% in the tax GDP means annual loss of US$ 3.3 billion”. Even if his maths are correct, does he honestly expect us to believe that the PM has personally evaded US $3.3 billion in taxes? Again, this is a cultural problem – not official corruption.
Abbasi’s article takes a turn for the truly bizarre, however, when he attempts the following mathematical misdirection:
The TIP adviser added that India’s tax-GDP ratio is 18%, and at that rate, Pakistan’s tax evasion/corruption in FBR is 9% of $175 billion, which is US$15.5 billion per year, i.e. Rs1,400 billion per year.
Did you see what he did there? He’s not even comparing apples to oranges. Rather, he is suggesting that we pretend that the apples are oranges so that we can get an even higher number!
Believing he had discovered a magic formula for attacking the government, Ansar Abbasi continued his assault on mathematics a few days later when he claimed that he was mistaken on Sunday. The present government has not cost the nation Rs8.5 trillion – but Rs20 trillion!.
Where did Abbasi find an additional Rs9.5 trillion? After his article appeared on Sunday, he apparently received a phone call from his friend Dr Shahid Siddiqi who suggested some additional “corruption” that he could add to his equation. Now, in addition to counting spending for public enterprises like transport and steel, Ansar Abbasi is including national security spending as “corruption”.
Quoting the State Bank of Pakistan figures, Siddiqi said the cost of war on terror to country’s economy from April 1, 2008 till January 31, 2012 stands at Rs4400 billion ($50 billion).
And not only is he adding military spending, he is also adding in trade deficits and monetary devaluation!
The trade deficit of these years has been $47 billion where as the Pak rupee fell from Rs68.16 per dollar in June 2008 to Rs90.50 in February 2012. The rupee fell by Rs22.3 per dollar during these years. A total of $30 billion has been transferred out of Pakistan during the first three financial years of the Gilani regime.
At this point the question must be asked if there is anything Ansar Abbasi and his sources believe is not corruption?
It should be noted that Dr Shahid Siddiqi appears to be a ‘go-to’ economist for Ansar Abbasi’s economic hit pieces. In October 2011, Ansar Abbasi quoted Dr Siddiqi extensively terming the government as “lying” about economics and bleeding the country through corruption. Ansar Abbasi quoted Dr Siddiqi again in December 2011 as saying “the overall economic situation of Pakistan under the present regime is the worst in the 64-year history of Pakistan”.
Mr Adil Gilani, too, may have a grudge to bear against the present government as he has found himself summoned before Federal Investigation Agency (FIA) Lahore over questions about his relationship with National insurance Company Ltd board member Qasim Amin Dada. Previously, it was reported, Mr Adil Gilani’s son resigned from his position as board member of Pakistan National Shipping Corporation (PNSC) after questions were raised about his appointment.
We do not question that corruption is a legitimate and serious problem in society. But stirring up a cloud of dust and calling it smoke does not make a fire. Hit pieces based on formulas that inflate numbers do not help expose and eliminate corruption, it only serves to distract from those who are legitimately trying to shine a light on serious issues of corruption and governance. If we are going to reduce and eliminate corruption, we need serious journalists to do the honest work of reviewing data and separating what is and is not legitimate use of taxpayer funds.