Panama Papers risks ‘political turmoil’, creates ‘policy uncertainty’, says WB report on Pakistan

Irshad Salim — The World Bank on Sunday warned that the Panama Papers issue has “enhanced political risks” in Pakistan and created “some policy uncertainty” — a view generally held by independent analysts and observers on Pakistani current affairs TV shows.

In its report titled “Pakistan Development Update” released on Saturday, the bank cautioned that the country was “exposed to natural disasters, political events and terrorism” on the domestic front, while the upcoming national elections may affect “reform momentum and macroeconomic policy orientation.”

Prime Minister Nawaz Shairf in a conversation with brother and Punjab Chief Minister Shehbaz Sharif. PHOTO: REUTERS

Published twice a year, the report sets out “recent developments across the economy and identifies risks and opportunities in the near-term future before focusing on a handful of key development challenges.”

The bank is not the first international financial institution to warn that Panama Papers issue may have consequences for Pakistan’s growth and political stability.

Last year, the International Monetary Fund President Christine Lagarde had noted that the perception of corruption in Pakistan would hurt private investment and impede efforts to promote sustainable and inclusive growth.

Increasing transparency, making people accountable, and removing red tape could help address the issue of perception of corruption in Pakistan, she had advised.

The bank notes that Pakistan’s economic growth is expected to climb to 5.2 per cent during the fiscal year ending in June, which is the highest in nine years.

However, there are significant downside risks to the projected outlook, and the country remains vulnerable to domestic and external shocks, the report said.

In a related note, Pakistani lawyers on Saturday gave a seven-day deadline to Sharif to resign on the Panama Papers scandal otherwise they will launch a nationwide movement against him.

The Supreme Court Bar Association (SCBA) and the Lahore High Court Bar Association (LHCBA) announced the joint stance at a countrywide lawyers convention in Lahore, capital of Punjab — Pakistan’s largest province and Sharif brothers’ bastion of power. Shahbaz Sharif, PM Nawaz Sharif’s younger brother is the provincial head for the last 8 years.

Opposition believes that Sharif will have to resign in the wake of the brewing lawyers movement.

But National Assembly Speaker Ayaz Sadiq said come what may Sharif will not resign and he will remain the prime minister till May 31, 2018.

Nawaz narrowly survived in three-two judgement in his favor in allegations of corruption in the Panama Papers case on April 20. But the country’s apex court ordered investigation into the allegations by a joint civil-military team.

Commenting on the issue and the world bank report, a former economic adviser to the Ministry of Finance explained that the Panama Papers issue had raised political risks, since investors had already gone into “wait-and-see” mode. This, he said, was due to the uncertainty surrounding the issue.

“When political risks increase, economic growth falls,” Dr Ashfaque Hassan Khan said.

Since the Supreme Court’s decision to form a joint investigation team to probe the assets of Prime Minister Nawaz Sharif and his family, experts are divided over whether this would yield concrete results or whether it was a mere “eyewash” given the history of such joint probes in the past.

Any grey area that the Joint Investigation Team (JIT) may have so far felt in performing its tough duty will be cleared by the highest judicial forum which takes up its initial probe report on Monday.

It will also become clear whether or not the three-member special bench will make the preliminary JIT report public; whether or not the judges will receive it in their chambers or in the open court; and whether or not any discussion on it will be held.

The six-member JIT will bring to the notice of the court any difficulties or handicaps it may have encountered in carrying out the investigations to seek guidance. It is mandated to proceed strictly in accordance with the April 20 judgment and submit final report in 60 days — an “uphill task given the lack of capability, capacity and polarization in performing such high-stake investigations in the country,” said one senior lawyer who choose to remain anonymous given the sensitivity of the case.

According to Mr. Waris Husain, professor of law in Washington D.C. and a writer on legal and U.S.-Pakistan issues, “The Panama-gate controversy highlights many of the interrelated issues that are at the center of Pakistan’s political and legal evolution as it enters its third consecutive term of democratic rule. This case impacts civilian-military relations, judicial-executive relations, the rule of law and corruption, as well as the power of the judiciary. Some have claimed that the Court has merely kicked these accusations further down the road without making any actual decision,” commented Mr. Husain in his article in The Diplomat.

The JIT has not yet officially issued a single word on its marathon deliberations spanning a dozen sittings over the past two weeks. But a plethora of reports have consistently emerged about its discussions, quoting unnamed sources in the JIT. The team has not repudiated or clarified any of these stories.

The JIT has refrained from formally releasing anything about its sessions.

JIT’s letter delivered to Qatari prince

Pakistan Embassy in Qatar has delivered to Qatari Prince Hamad Bin Jassim a sealed envelope, possibly bearing a questionnaire from the Joint Investigation Team [JIT] probing the Sharif family’s offshore properties in the light of the Supreme Court’s April 20 verdict in the Panamagate case, reported The Express Tribune.

Forwarded through the Foreign Office, the JIT sent the envelope to Prince Jassim as during the Panamagate case hearing, Prime Minister Nawaz Sharif’s legal team had presented two letters from the prince in a bid to establish the money trail of the London properties owned by the Sharifs.

According to sources quoted by the paper, the envelope was delivered to the prince despite interference from Saifur Rehman, a close aide of the Sharif family and the chairman of the defunct Ehtesab Bureau, who first pressured the embassy officials to unseal the envelope and later urged them not to deliver it to the prince at all.

However, Pakistan’s Ambassador to Qatar Shahzad Ahmad refused to act on Rehman’s wishes and delivered the sealed envelop to the prince on Thursday, said the sources quoted ET.

Saifur Rehman is stationed in Qatar, reportedly tasked with helping the Sharif family with regard to the JIT’s ongoing investigation.

The Sharifs have also engaged their trusted legal aide and former attorney general of Pakistan [AGP] Salman Aslam Butt to manage the affairs related to the involvement of the Qatari prince in the case.

Meanwhile, the Sharif family did not challenge the Panamagate judgment as a 30-day time limit for filing a review petition ended on Saturday.

1 thought on “Panama Papers risks ‘political turmoil’, creates ‘policy uncertainty’, says WB report on Pakistan”

  1. If there is a timely delay in development activities in Pakistan dur to a Panama papers, it’s worth suffering. It’s high time matters of corruption are sorted out transparently. The future of any country lies in eliminating corruption other wise conditions in Pakistan can get similar to Somalia,Zambia, Congo.

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