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Corruption: A main growth hurdle

Though belated, but growing concern on the part of all tiers of government to eradicate corruption through wide ranged campaign launched and equally participated by all public and semi public sector entities is a plausible initiative. However in this regard it is essential that all areas where corruption emanates like lack of monitoring and supervision at the time of election of national and provincial assemblies and also of local bodies, functioning of all ministries where finance matters and most importantly inefficiency and lack of accountability on the part of institutions that govern economic and social interaction are focused for implementation of sound policies and enforcement of regulations pertaining to each area of responsibility.

Corruption , which is correlated to governance deficit is the burning issue both in low income developing countries as well as emerging economies. According to Daniel Kaufman an economist at World Bank and pioneer in the field of research on corruption and governance estimates of bribery around the world hover around $ one trillion.

In fact absence of public institution with transparent track record and quest for power politics are factors for impeding long term developmental goals both in developed and developing economies.

In Pakistan’s scenario lack of good governance in all sectors is an outcome of lack of accountability and transparency particularly in money matters, promoting money laundering and terrorism both at individual and government level due to involvement of people holding public figure positions for private gains and also some segments of corporate sector having clandestine net work of political organizations and private individuals colluding to benefit from nation’ s wealth and resources through unjustified/manipulated policies in total disregard of welfare of public at large.

Consequently despite high growth targets set, envisaging possible improvement in all macroeconomic indicators, growth rate remains stagnant and resources are driven away or plundered by people doing money-laundering and involved in terrorist activities.

Due to lack of transparency in country’s election system incentive for self-serving behavior dominates in policy making both in public and private sector. Due to lack of operational transparency, institutions, which are meant for ensuring sustainable economic growth rate are found working in favor of high profile individuals by allowing frequent tax amnesties to corrupt segments of population habitual of tax and tariffs evasion, thus inflicting heavy revenue losses to the economy.

Corruption is rampant in public sector entities due to excessive bureaucracy for which it is imperative on the part of all tiers of government that red tape factor is reduced to minimum level by injecting concept of accountability as its adverse impact finally penetrates into private sector businesses and also other organizations of civil society. In fact it is the responsibility of government to reform functioning of public institutions with the purpose of combating possible trends of gaining personal benefits at the cost of long term developmental goals to be achieved.

Fiscal transparency and good governance can eradicate corrupt practices from public sector entities, but unfortunately all regulatory institutions are lacking in good governance as such country is faced with acute inefficiency of government institutions like NAB, NEPRA and FBR etc , which due to lose control on operational side often fail to achieve the set revenue targets and mobilization of resources as envisaged in country’s budget almost every year. Resultantly fiscal consolidation has become a distant dream for the government.

Cases of tax evasion from institutions and individuals when reported to National accountability Bureau (NAB) are not handled speedily and due to corrupt practices in vogue defaulting party is forgiven either through plea bargain or favor done by corrupt legislators who have hold on regulatory institutions and also lower levels of judiciary.

Interestingly this state of affairs of public sector regulatory authority is rather a improved status from first decade of present century when according to Transparency International corruption rank of Pakistan was 144 out of 175 countries and now it’s rank is 116 among the least corrupt nations at the close of the year 2016, but still things are highly disappointing. In this regard apart from transparency in financial matters pertaining to entire economy and social sector and political transparency in particular need to be focused on urgent basis.

During the process of election of members of all assemblies political financing should be strictly regulated. Weak monitoring and enforcement has failed to check financing of election process on individual basis. Candidates are found spending almost ten times of prescribed  financing limits and all corrupt activities in each constituency stems from this stage. Further there should be strict ban on discreet corporate contribution to election to favor political party of their choice.

Academic and professional performance and family background of each candidate should be thoroughly thrashed out. In this regard assets of all candidates to election and also of all bureaucrats, high officials of public sector corporations and above all of the people relating to judiciary should be checked properly along with their status regarding tax defaults/ tax evasion and this exercise must be undertaken every year during the tenure of their office/ political office holding so as to ascertain whether assets added to their total wealth every year match with their genuine/ legitimate earnings.

Political transparency if neglected all efforts to thwart corruption would be in vain. Because corruption apart from causing adverse repercussions on economy undermines outcomes in education, health care and public investments  and ultimately relating to human capital development and income equity as enumerated in IMF research findings.

Corruption in lower strata of judiciary and media of the country is another cause of concern. Judiciary and media in a way supposed to have a regulatory hold on all tiers of government, civil society and private sector therefore all initiatives need to be diverted towards having strong judiciary and media totally devoid of political and corporate influence.

Private sector involvement as an allay to improve governance and combat corruption is most needed. Chambers of commerce and industry and other trade bodies need to join campaign. They must support tougher anti-bribery initiatives from the side of government and must make honest efforts to ensure implementation of policies eliminating conflict of interest irrespective of the fact that policy concerned obliges certain private sector entities.

Apart from above discussed factors it is underground economy, being almost one half of formal sector is causing enormous loss to the economy and at the same time given impetus to corruption, tax evasion, smuggling and money laundering. It is said that now middle class is expanding in Pakistan, but it is mainly due to the fact that obscure real GDP is much higher than what is officially declared. As such informally per capita income is also high, which has increased purchasing power at the hands of people doing undocumented businesses and adopting all corrupt practices to remain out of tax net.

Government in a way is also responsible for providing cover to informal economy by issuing prize bonds and bearer foreign exchange certificates apparently to boost up savings in the country. Strict measures are need to be taken to reform monetary and fiscal policies by enhancing efforts for complete documentation of all economic activities in the country, which is the only short cut for eradication of corruption.

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