Western banks are flourishing on the money looted by developing countries' corrupt politicians, bureaucrats and businessman


May 10 - 16, 2004





Addressing the concluding session of the 3-day International Conference on the United Nations Convention against corruption (UNCAC) in Islamabad last week, President General Musharraf called for an international legislation to help restore the looted wealth of developing nations, which had been hoarded abroad in banks of rich countries by corrupt leaders, politician and businessman. "This is the biggest relief the developed world can give to the developing countries," he added.

The conference which was attended by a number of experts representing different countries was hosted by the National Accountability Bureau of Pakistan. It was inaugurated by the Prime Minister Mir Zafarullah Khan Jamali. A number of officials and experts from various countries and agencies made their presentation and participated in the workshops with the focus largely on the UN Convention that Pakistan has to ratify. Intensive discussions were held including (i) role of society (ii) preventive, anti-corruption & practices and (iii) strong implementation on case study of Pakistan.

Foreign experts who participated in the conference described corruption in Pakistan as a complex issue, which needed more deep and dedicated efforts to eradicate the menace. They were appreciative of the role played by the NAB in curbing corruption in Pakistan and assured full support, of their countries and agencies in Pakistan's vigorous pursuit of curbing corruption.

President Musharraf, in fact voiced the common public complaints when he said that western banks are flourishing on the money looted by developing countries' corrupt politicians, bureaucrats and businessman. He urged the developed countries to "stop this loot money laundering in western banks through legislation and UN resolutions." Describing the practice as the "main source of corruption in the developing countries, he demanded: "Give billions of dollars back to us. No one should be allowed to take billions of dollars away. That is the biggest relief that the developed world can give to the developing countries." Indeed over the years, as regularly reported by the Western media, many of the Third World leaders, most infamous among them being the Philippines, Morcos and the Congolese dictator Mobutu, have been stealing billions out of the public money to stash it away in secret bank accounts abroad while majority of their peoples lived in abject poverty and deprivation. There can be no justification why such stolen money should not be returned to its rightful owners.

Unfortunately, the western countries have, so far, been refusing to comply with requests from countries like Pakistan to track down and repatriate ill-gotten money, citing legal hindrances. Hence, the President's call for international legislation to help the developing countries to have their looted wealth returned to them. As a matter of fact, for several years now, after the laundering of drug related money became a big issue in the developed countries, they enacted laws that prevented their banks from laundering drug money. Encouraged by the idea, some time back, Pakistan had proposed to OECD countries that the same law may be extended to cover the ill-gotten wealth that many corrupt leaders from Third World countries kept in Western banks. But the plea did not move the conscience of any of the European governments. Once again, when the issue of terrorists' funding surfaced in the western countries, they moved quickly to put in place stringent legislation and practical measures to freeze the accounts of all individuals as well as organizations suspected of providing financial support to those believed to have terrorist links. Help was also sought from and given by Muslim countries, including Pakistan, in plugging the informal channels that were traditionally used by their nationals living abroad for money transmissions.



It is obvious from these examples that when it comes to their own interests the western countries not only resort to necessary legislation, they also force other to change their practices. Besides, they have been regularly bemoaning the prevalence of corruption in the Third World countries. Yet in refusing to do the needful regarding their own banks' handling of corrupt money, the developed nations have actually been encouraging the very corruption they seem to find abhorrent.

The suggestion given by President Musharraf deserves the support of the world for passing an effective resolution at the UN through which the curse of money laundering can be curbed. Tough international legislation and its implementation will provide developing countries with relief in overcoming their social and economic problems. This is the need of the hour. The international legislation and specially those selfish and rich countries which benefit from political, administrative and business corruption must seriously consider this demand and eschew their selfishness and return the looted funds to help the poor countries.

Prime Minister Mir Zafarullah Khan Jamali in his inaugural speech asserted that arbitration itself is part of corruption. He further stated that the process of "plea-bargaining" has led to the eruption of a new facet of corruption in the country, which should be nipped in the bud before it spreads and escalates corruption, which is already so rampant in the country.

In contradiction, the Chairman NAB Lt. Gen. Munir Hafeez supported arbitration and called it a legal process. He asserted that without plea bargaining there could be no transparent accountability in the country and opined that for a consistent and honest NAB and accountability, the process of plea-bargaining was vital. He observed that plea-bargaining is prevalent everywhere in the world, even with courts of law. The actual and final decision is taken by the courts of law. He suggested that if the prime minister desired the abolishment of plea-bargaining, he has the prerogative of having the law amended.

The NAB Chairman argued that if NAB does not abide by the decisions of plea-bargaining, it will not be able to proceed forward and the settling of cases by NAB would become tedious. As arbitration is a way of settlement outside the court, with the actual judgment in the hands of the court, plea bargaining is untenable as it allows the guilty party to evade the actual chastisement by paying a part of the huge amount looted. This encourages others to take the way of these swindlers, taking 'legal' cover of plea-bargaining and actually retaining a major part of the pillage by only paying way 21 percent or less than one-fourth of the billions of rupees siphoned in tax evasion, deception or fraud, and starting out afresh with a clean slate at any government or non-government level and even at times entering the portals of power to become ministers. These elite cons are allowed to pay the required amount back in easy long-term installments, facilitating them. And further those let off on bail jump the country without making any substantial payments. It seems that plea-bargaining absolves these looters from the stigma of conviction and they can go away as free men.

The visible clash of opinion between the Prime Minister and NAB Chairman needs to be looked into. The NAB ordinance 1999 must be minutely scrutinized by experts for possible loopholes, doing away with redundant and arbitrary clauses which can be twisted to provide offenders with reprieve. Reforms must streamline the process of accountability in the country, making it transparent, workable and legally just when applied to the motley crew of miscreants.

Having said this, every individual has the right to defend him or herself and if convicted has the provision of appeal. The fact is that the actual process of law trudges along and a case takes years before a judgment is reached, as there are no short cuts in law. The process of plea-bargaining quickens the slow pace and is able to achieve quicker results. However, the need for streamlining the process of arbitration is vital and is only possible when it is permanent and transparent.



While talking to newsmen on the sidelines of the conference, NAB chief Lt. Gen. Muneer Hafeez disclosed that NAB has created a record and recovered Rs. 175 billion ($3.172 billion) looted money in a short span of time. The achievement was also trumpeted, loud and clear by President General Pervez Musharraf who told the concluding session that it was a big achievement of the NAB. Anti-corruption initiatives were highlighted as a major governance theme with the coming into power of the present government in October 1999 and creation of the NAB as a specialized agency to eradicate the menace of corruption.

"We are much better in the recovery than many foreign countries", said Munir, adding:" The situation is improving in Pakistan".

The recovered money is helping the economy as it is being recycled in the country's development. It is reducing poverty level. The NAB had implemented good governance and transparency, which would help the investment climate, he said. "The rupee will not fly our of the country now", he added confidently. While referring to the corruption in Pakistan, the NAB Chairman, Lt. Gen. Munir Hafeez, told the opening session of the UNCAC: "Foreign aid worth billions of dollars has failed to have a significant impact on end beneficiaries, state institutions have lost their faith in the system to provide justice is very low. In 1999 when the NAB was created the situation was at its lowest ebb. Despondency was at its worst." "For Pakistan, the negotiations of the UNCAC were an opportunity to allow its point of view to be heard," he told the conference, he added.