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HomeWorldCPI gets mauled by Panama Papers – The Express Tribune

CPI gets mauled by Panama Papers – The Express Tribune

This year’s result­s highli­ght the connec­tion betwee­n corrup­tion and inequa­lity

The writer served as Executive Editor of The Express Tribune from 2009 to 2014

The writer served as Executive Editor of The Express Tribune from 2009 to 2014

Revelations of tax-evasion and money-laundering networks on a global scale in the so-called Panama Papers helped make the world appear more corrupt last year, according to graft watchdog Transparency International. The Berlin-based organisation said there were more falling scores than rising ones on its 2016 Corruption Perception Index (CPI), published early this week. A lower score means a country is seen as more corrupt.

Declines were driven by “massive and pervasive” public-sector corruption, the watchdog said. The Panama Papers data-leak also prompted a wave of anger at wealthy individuals and companies using well-established methods of evasion. “It is still far too easy for the rich and powerful to exploit the opaqueness of the global financial system to enrich themselves at the expense of the public good.”Bottom of FormWhat to eat, drink, wear and drive – in real life and your dreams.You will now receive the Game Plan newsletter

The organisation’s president, Jose Ugaz, also pointed to countries with increasingly autocratic governments as places where the perception of corruption has been on the rise. Turkey, where President Recep Tayyip Erdogan has sought to tighten his grip on power, scored 41 points on the CPI scale of zero to 100, down from 50 three years earlier. Hungary, where Prime Minister Viktor Orban has been criticised for increasing authoritarianism, fell to 48 from 51 a year earlier.

“In countries with populist or autocratic leaders, we often see democracies in decline and a disturbing pattern of attempts to crack down on civil society, limit press freedom and weaken the independence of the judiciary,” Ugaz said.

The US dropped two points to 74. In its release about the 2016 index, Transparency didn’t mention the election of Donald Trump as president in November. But in a separate statement last week, it said Trump’s government appointments were “rife with potential conflicts of interest.”

Transparency called on governments to go beyond anti-corruption legislation to “deep-rooted systemic reforms,” including public registries to track corporate ownership and stiffer punishments for “professional enablers” of tax evasion and fraud.

This year’s results highlight the connection between corruption and inequality, which feed off each other to create a vicious circle between corruption, unequal distribution of power in society, and unequal distribution of wealth.

The interplay of corruption and inequality also feeds populism. When traditional politicians fail to tackle corruption, people grow cynical.

Increasingly, people are turning to populist leaders who promise to break the cycle of corruption and privilege. Yet this is likely to exacerbate – rather than resolve – the tensions that fed the populist surge in the first place.

The good news for Pakistanis is the country’s rank in the CPI has improved by nine spots, moving to 61 in the list of most corrupt countries among 176 countries in 2016, from 52 among 168 in 2015. For the first time since 1996 when the CPI was first published, Pakistan climbed up from the lowest one-third corrupt countries to the middle one-third countries.

But the not-so-good news is, Panama Papers have brought into focus the massive business interests of PM Nawaz Sharif’s family inside and outside the country giving rise to many questions of conflict of interests. These questions become all the more pertinent when raised in the context of lucrative trading relations that exist between Pakistan and several Gulf and Middle Eastern countries in which the PM’s family has had intimate business interests. Indeed, it is difficult to believe that private interests were not allowed to interfere with public interests while clinching official trade deals with these countries. And it is even more difficult to believe that public interests were not sacrificed at the altar of private interests while cutting business deals inside the country by the extended families of the Prime Minister and the Punjab Chief Minister Shahbaz Sharif. The questions now being raised in the US on the issues of conflict of interests since the election of President Trump also seem too relevant in the case of both Nawaz and Shahbaz.

There are others as well who are as politically powerful in Pakistan as the Sharifs. They also use money to buy political power and then make more money using this power. The so-called 22 families have disappeared. In their place have emerged, give and take, about100 officially favoured and pampered families. Look at the highly lucrative margins enjoyed by the captains of cement and steel sectors and the likes that thrive on cartelisation.

Published in The Express Tribune, January 28th, 2017.

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