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CLASS:BBA 4 REG NO: 10282 ACKNOWLEDGEMENT
All the praises are for the almighty, Allah who bestowed me with the ability and potential to complete this report. Words are very few to express enormous humble obligations to my affectionate Parents for their prayers and strong determination to enabling me to achieve this job. I also thank Bahria University for giving me the opportunity to study business law as my subject.
.pg 5 Corruption in Pakistan………………………………….pg23 3 ..pg14 According to transparency international and corruption cases………………………………………pg15 PPP’s massive corruption…………………………………pg17 Impact of corruption………………………………………pg19 Government effort against corruption in Pakistan………pg20 NAC’s-Objectives.pg22 Conclusion…………………………………………………. recent political history…………………. Process and Recommendation………pg21 Strengthening of anti corruption agencies……………….pg11 Forms of corruption………………………………………pg13 Corruption prone institution in Pakistan………………...pg 6 Corruption trend in Pakistan over past 10 years………pg7 Levels of corruption……………………………………...pg8 Key sectors affected by corruption in Pakistan ……….pg10 Most corrupt sectors…………………………………….TABLE OF CONTENT • • • • • • • • • • • • • • • • Summary…………………………………………………pg 4 Introduction ..
However. Petty corruption in the form of bribery is prevalent in law enforcement. They are mainly directed against members of the political opposition and minor civil servants while leaving the conduct of military officials outside scrutiny. is endowed with comprehensive powers to investigate and prosecute cases. Various efforts over the past years have tried to develop institutional mechanisms to address these problems. The dismissal of members of the Supreme Court. procurement and the provision of public services. the National Accountability Bureau (NAB). shielding many public officials and members of the government from prosecution. which was developed in 2002. A National Anti-Corruption Strategy. coupled with the perceived co-option of the judiciary and the arbitrariness of many anti-corruption proceedings. the National Reconciliation Ordinance of October 2007 has granted blanket immunity for past corrupt actions. 4 . offers a comprehensive plan for tackling corruption. Moreover. The judiciary is not seen as independent and considered to be shielding corrupt political practices from prosecution. Anti-corruption proceedings have long been suspected of being skewed. including Chief Justice Chaudhry. a lack of political will. has led to violent civil unrest and further shaken the public’s trust in the judiciary to undertake anti-corruption prosecution.Summary Corruption remains a substantial obstacle for Pakistan where it is still perceived to be widespread and systemic. are major obstacles in the fight against corruption. The executing agency.
four different democratically-elected governments held power under the same two political leaders. Although parliamentary elections were to take place in 2007. During the military government. This era of democratic government ended in October 1999 following a military coup led by General Pervez Musharraf. Benazir Bhutto of the Pakistan People’s Party (PPP) first came to power in August 1990 but later was dismissed. The parties formed a coalition government in March 2008 with a new prime minister in power: Yusuf Raza Gilani. The supreme court justices that Musharraf had dismissed during the country’s state of emergency in 2007 were then restored. Her government was replaced by Nawaz Sharif and his Islamic Democratic Alliance (IJI) party in April 1993. Her government was again dismissed in November 1996. declaring a state of emergency and suspending the constitution within a month of taking office.marked by frequent regime changes and unrest. In March 2007. 5 . President Musharraf was defeated by the PPP and PML. Sharif returned as prime minister but this time representing the Pakistan Muslim League party (PML).Each administration was either dismissed or overturned. After declaring himself the chief executive. elections were held. In 2002 a parliamentary election returned civilian rule. When the elections finally took place in February 2008. the political situation in Pakistan deteriorated. yet the Musharraf presidency was extended for another five years. and an interim government. the Supreme Court validated Musharraf’s claim to the presidency in May 2000. further turbulence arose after the dismissal of Chief Justice Iftikhar Mohammed Chaudhry for alleged misuse of office.Introduction: Recent political history Political turbulence and insecurity have dominated Pakistan over the last 50 years. After the resignation of both the president and the prime minister. often as a result of corruption charges and allegations of power misuse. former Prime Minister Bhutto was indicted and convicted on corruption charges at home (in April 1999) and abroad (in Switzerland in July 2003). they were first postponed because of worries of instability and later as a result of the assassination of Benazir Bhutto in December 2007. Violence in the northern province of Waziristan and in the province of Balochistan in the south served another blow to national unity. which resulted in a second term for Bhutto and the PPP. A devastating earthquake in 2005 in the Pakistan-administered Kashmir region greatly strained the government. After a period of civil unrest. Against this backdrop. Musharraf was re-elected to the presidency in October 2007. Former Prime Minister Sharif was also tried and sentenced for acts of terrorism in April 2000 although he was eventually pardoned and went into exile. Between 1990 and 1999.
Failure to do so in a timely manner will continue to frustrate poor people and make them weary of the current democratic system and drive them to extremism. judiciary and elected representatives. NBP. KESC. EOBI. Though the 2009 Corruption Survey Report was an eye-opener. poverty. It is impossible for an ordinary person to done his work by following the proper procedure in many Public departments. PSO. CDA. PC and many other organisations. influence peddling. armed forces. and abuse of power. This commission should report only to parliament or judiciary and not to the ministry of law. OGDC. DP Division. There is a need for the government to make serious efforts to apply rules and regulations across the board to achieve the goal of reducing corruption but this is unlikely with the present set of corrupt and indifferent rulers. extortion. NIC. 6 .W. Pakistan has lost credibility and is facing serious economic threats. NHA. Due to lack of governance and massive corruption. PIA. rental power plants. The people of Pakistan and the international donors must rise to the occasion and start pressuring the Pakistan government to curtail corruption and to improve governance. Pakistan needs good governance and a transparent administration to counter corruption scams of billions of rupees in Pakistan Steel. inflation. help corruption.Corruption in Pakistan Every Pakistani is familiar with the word “Corruption”.F. But from last few years after the end of Army regime the corruptionperception has worsened especially the last year. The extreme poverty and lack of infrastructure and basic services in the rural areas of Sindh and Balochistan is in part fueled by bribery.P) beat all the provinces and has the highest rate of corruption in Pakistan. and it should look into corruption of all holders of public offices belonging to civil services. PEPCO. food and electricity shortages and increase in unemployment. but this year it was shocking Khyber Pakhtoon Khawa Province (former N. TCP. as stated by the latest Transparency International Corruption report 2010. DHAs. like formation of an independent accountability commission as required by the UN Convention against Corruption. Because they know there work can only be done in every department if they follow corruption. Many people in Pakistan believe that much of the development and a significant portion of the operations allocations are lost due to bribery and other related illegal and unethical activities. TDAP. The political will of the government to curb corruption is urgently required and it must also be seen by public and donor countries.
the general public views corruption to be a stumbling block for the country. only the Maldives has a higher score among countries in the Asia Pacific region. Interestingly. Sharif and Musharraf. with surveys to follow annually over the coming years.worldbank.org) has shown the country slipping two places to 76 out of 178 countries based on the latest results (June 2008). (Please see: http://www. While the Doing Business Survey of the World Bank. Since first being included in 1995. (Please see: http://info.org/policy_research/surveys_indices/cpi/2007). rule of law and government effectiveness. (Please see: http://transparency. governance actually seemed to improve slightly under the first military government (1999-2002) following Musharraf’s coup. corruption is viewed as being equally pervasive within federal. However. Apart from the private sector. Pakistan scored 2. The first phase of each government was rated as less corrupt than the second period that each leader was in power. Half of all those surveyed (52 percent) perceive government efforts to reform corruption as ineffective and nearly two-thirds (59 percent) think that corruption is likely to increase within the next three years. the country even performed slightly better in terms of controlling corruption. In 2003. More than 44 percent of respondents reported that they have paid a bribe to obtain a service.0 in 2007 compared to 5. Based on research done for this query and consultations with TI Pakistan.8 in 2003 and 11. provincial and local governments. According to the World Bank’s WGI. TI’s Global Corruption Barometer 2007 shows Pakistan to be one of the countries most affected by petty bribery. after government bureaucracy and poor infrastructure.doingbusiness. all the country’s indicators have since collapsed (based on 2007 results) except for those related to regulatory quality and voice and accountability. According to the 2007 CPI. The next NCPS is being conducted for 2008.4. systemic and deeply entrenched at all levels of society and government. Further surveys conducted in recent years confirm the finding that corruption in the country has worsened: The World Economic Forum's Global Competitiveness Report (2007-08) identifies corruption as the third greatest problem for companies doing business in Pakistan.org/governance/wgi2007/sc_chart. 7 . The Worldwide Governance Indicators (WGI) of the World Bank have also shown very little progress over time.11 in 1998. which have deteriorated rapidly since 1998: 1. Its National Corruption Perception Survey (NCPS). with corruption perceived as widespread. assessed perceptions of corruption under the previous governments of Bhutto.weforum. and is among the countries with the most perceived corruption each year.org/). Pakistan has consistently performed poorly on the Corruption Perception Index (CPI) of Transparency International. Roughly 40 percent of companies in Pakistan feel that corruption is one of their major concerns. with weak scores in most areas. conducted in 2002 and 2006. the country is seen as a relatively better place for running a business than its neighbours.asp).Corruption trends in Pakistan over the past 10 years Most governance indicators show an unchanging situation in Pakistan. (www. Most troubling has been the rapid decline in indicators for political stability.gcr.
site selection. The report lists the first two problems as government bureaucracy and poor infrastructure. various Taxation departments (Custom duties.org/reports/2006/PAKISTAN/index. This does not include subsequent costs of corruption in the implementation and maintenance stages of projects.org says that the World Bank and the Auditor General of Pakistan have complained about governance problems in recruitment. The instances where conflicts of interest due to personal loyalties and family connections exist are numerous.org/publications/media-anddevelopment/Article%20Forensic%20Accounting-Kashif%20Article. Power Sector. appointments in the police force are often based on political considerations. (http://www.pdf) reports the following percentages of respondents for having encountered corruption in key sectors in various South-Asian countries: Country Education Health Power Land Adm.jdhr. etc.oecd.The Organization for Economic Cooperation and Development (OECD) [Web Site: http://www. According to a report.LEVELS OF CORRUPTION It is a widely held view that corruption in Pakistan is widespread. certain other loans were withheld after irregularities were uncovered. and that it is entrenched at all levels of government. A survey of South Asian countries at http://www. Many complain that local landlords or urban groups with police support exploit poor people through extortion (bogus fines. A World Bank report containing an assessment of the Pakistan’s Infrastructure Capacity (PICA) dated February 2008 states that 15% of Pakistan’s Development budget for 2007-08 was lost in the procurement process alone due to corruption. The important business publications such as World Economic Forum’s Global Competitiveness Report (2007-08) says that corruption is the third greatest problem for companies for doing business in Pakistan. Tax Police Judiciary Bangladesh 40% 58% 32% 73% 19% 84% 75% India 34% 15% 30% 47% 15% 100% 100% Nepal 25% 18% 12% 17% 25% 48% 12% Pakistan 92% 96% 96% 100% 99% 100% 96% General perceptions and actual public surveys about corruption show that Police. Income Tax). This has resulted in cancellation or suspension of some of the World Bank’s projects such as the Balochistan Primary Education Project.cfm). Also.Judiciary. absenteeism and bribery. 8 . and irrigation departments are considered the most corruption prone departments in Pakistan.).globalintegrity. systematic.
An article in one of Pakistan’s major English newspaper Daily Times (http://www. The judiciary is not viewed as independent of the Executive side of the government but rather part of it. The reports of 193 billion rupee loan right off from 1999 to 2009. In Pakistan.000 registered bank loans cases of 217 billion rupees. 9 . A statement by Asian Human Rights Commission (AHRC) issued on December 8. 2009 says that “.com. The 2005 Karachi Stock Exchange Scam that cost 25. The World Bank’s 2004 Public Expenditure Management report says that there is a widespread collusion between taxpayers and tax officials leading to lack of tax compliance by businesses. accommodation. bureaucracy and military elite is enjoying in the form of free fuel. long periods of martial law have provided opportunities for the generals to loot the country. The media. .According to a 2006 survey. luxury cars.doingbusinesss. electricity.org).asp provides the following explicit and implicit examples of corruption in Pakistan: ”Perks are a type of corruption which country’s ruling politicians. army of servants. This is equitant to an annual average GDP growth rate over 4 years. military and civil bureaucracy. by siphoning public funds for their own personal gain. Another report says that the Pakistani judiciary takes an average of 880 days to settle a business dispute at a cost of 24 percent of the claim (www. 44 percent of them reported that they paid a bribe to a court official. State Bank of Pakistan and Securities and Exchange Commission looked the other way. There is no legal and/or moral justification for such perks.asp?page=story_9-1-2003_pg3_3 says that the cost of corruption by political leaders using public office for private gain in banking sector alone cost 10 to 15%.pk/default. 96 percent of the people said that they had encountered corruption inJudiciary.dailytimes.” A report accessible at http://pakobserver.pdf).org/dataoecd/63/31/36494011. became part of the loot of the generals’ corruption.000 families allegedly some 800 billion rupees while Islamabad.net/200912/28/Articles02.oecd. .” “It is opined that 30 percent of total corruption is in government departments and banks. Pakistan’s tax and public finance administration is also affected by corruption. judiciary. In 1997 Nawaz Sharif government appointed 30 judges to settle 48. (http://www. The same newspaper reports that the overall cost of corruption by political leaders in Pakistan is between 20% and 25% of the GDP.
3. 5. 7.KEY SECTORS AFFECTED BY CORRUPTION IN PAKISTAN 1. Police and law enforcement Judiciary and legal profession Power sector Tax and customs Health and education Land administration In addition. 6. 2. 4. Public Procurement seems to be a major concern across most sectors 10 .
The report titled the National Corruption Perception Survey 2010 showed a high rise incorruption from 195 billion rupees in the year 2009 to 223 billion rupees in the year 2010.1. 3. 11 . 2. Land administration departments were placed third in corrupt practices. Bureaucracy and Police had maintained their ranking as the two of the most corrupt departments in public sector in 2010.
414 rupees. 12 . Corruption in the judiciary. Syed Adil Gilani chairman of TIP said that about 70 % of people believed that the previous military regime of General Pervez Musharraf was less corrupt then the present Pakistan People’s Party (PPP) led coalition government. land administration was the most corrupt sector. In terms of bribery. KPK is highlighted to be the most corrupt of all the provinces. where average bribe paid in each incident was 46. 7. 5. 6.4. local government and education sectors has also increased as compared to the last year.
13 . The public procurement process in Pakistan is an example of where corruption can take place. the World Bank and the Asia Development Bank are assisting Pakistan in establishing e-governance in order to promote transparency and reduce corruption in procurement processes and other areas of governance.Forms of corruption Corruption manifests itself in various forms in Pakistan. were the lack of accountability. absenteeism and corruption for development projects. In response. information on government expenditures and decisions is not always made public. nearly every respondent (99 percent) had encountered corruption. nepotism. However. some of the World Bank’s projects were (partly) suspended or cancelled. Citizens commonly face demands for bribes in their dealings with government institutions to access basic public services. In addition. As a result. and misuse of power. while the rest had to rely on other forms of influence to obtain a connection. site selection. the disbursement of other loans was withheld after irregularities were uncovered. In terms of basic services. Both petty and grand corruption are prevalent in the country. 44 percent of the respondents were only able to access electricity by paying a bribe. low salaries and discretionary powers. aid and development projects. When it came to the country’s tax authorities. the three most corrupt government agencies were the police. corruption in procurement has affected poverty. The frequency of petty bribery is alarming and has shown little improvement over time. With Pakistan a major recipient of grants and loans from international donor agencies. as viewed by the respondents. The World Bank and the Auditor General of Pakistan have repeatedly cited governance problems in recruitment. (64 percent). public sector services — such as for power and utilities as well as infrastructure and public works are the most affected by corruption. power sector (11 percent) and judiciary (9 percent). Measures suggested for combating corruption included more adequate salaries and a speedier judicial process. A World Bank Country Assistance Evaluation of projects and programmes in Pakistan has confirmed the problem. as evident in the national corruption surveys conducted by TIPakistan in 2002 and 2006. Survey results for 2002 indicated that a remarkable 100 percent of the respondents who had any type of contact with the police over the previous year were confronted with corruption. In principle. As signalled by TI-Pakistan’s survey work. including widespread financial and political corruption. the law in Pakistan provides for open and competitive bidding in awarding government contracts. Public works kickbacks are estimated to constitute approximately 25 percent of the budget. According to respondents of the 2006 survey. The three main reasons for corruption. such as the Baluchistan Primary Education Project.
More attention needs to be paid to summary tables of outstanding public sector accounting and to good reporting and disclosure processes following audits. The report emphasised the urgent need to strengthen financial reporting. Unlawful police methods do not solely affect poor people. The judiciary is also viewed as lacking independence from the executive and contributing to a general culture of impunity. influential landlords decide the appointment of law enforcement officers in their area. These have arisen mainly from low institutional and staff capacity and uneven implementation of reform measures. The other sector in Pakistan which is seen as notoriously inefficient and corrupt is the judiciary. provincial and local administrations since service delivery is divided between different political levels. Police officers frequently have conflicts of interest due to personal loyalties and family connections. 96 percent of the people who came in contact with the judiciary encountered corruption and 44 percent of them reported having to pay a bribe to a court official. a situation that has led to tax evasion and lack of tax compliance. The country’s tax and public finance administration has also been affected by corruption. to institute adequate controls at all levels of government — especially at the provincial level and to maintain effective tracking of social spending. The high prevalence of corruption in the sectors covered in the national survey suggest that the problem likely cuts across federal. According to TI Pakistan’s 2006 survey. 14 . judges are exempt from oversight and investigations by Pakistan's national anticorruption agency. the National Accountability Bureau. According to the organisation Global Integrity.appointments in the police force are often based on political considerations. according to Global Integrity. creating a ready group to engage in the petty abuses currently plaguing Pakistan. A more recent report on public sector accounting in Pakistan further shows its public sector accounting and auditing does not comply with international standards. Despite these problems. and the settlement of disputes often involves paying bribes. major gaps and weaknesses remain in the accountability chain. Businesses also complain that they suffer from extortion by the police. although good progress had been achieved in public sector accountability. Moreover. for instance in the form of bogus traffic fines. a financial accountability assessment undertaken by the World Bank in 2003 showed that. Again. with police officers acting on their behalf. The business community generally lacks confidence in the capacity of the judiciary to enforce rules and laws. It is also well known that in Pakistan.In addition. the country is administratively structured in such a way that there are 100 times more junior-level civilservants than senior officers. the procedure for selecting judges at the national level is not transparent and selection procedures are often made in exchange for political favours.CORRUPTION PRONE INSTITUTION IN PAKISTAN The wide consensus across surveys points to the police as being one of the most corrupt institutions in Pakistan. The World Bank’s 2004 Public Expenditure Management report on the country showed widespread collusion between taxpayers and tax officials.
He claimed that under the Rental Power Projects.ACCORDING TO TRANSPARENCY INTERNATIONAL AND CORRUPTION CASES 2010 War-torn states are still seen as being the most corrupt in the world. Transparency said. he said the Rental Power Projects of the government. which measures the perception of corruption in the public sector. The 2009 report showed Pakistan climbing five numbers from the previous 47 to become the 42nd most corrupt country in the world. It’s an aggregate indicator that combines data from as many as 13 surveys and assessments from 10 independent institutions. On the eve of a new global report on corruption. According to the report. presently under the scrutiny of the Supreme Court of Pakistan. He said that the TIP had also written to the apex court on this case of massive corruption and irregularity. This year’s index. according to a new report from Transparency International. was on the top.The index has become a benchmark gauge of perceptions of a country’s corruption. The Transparency International is releasing its report on Tuesday at 2 pm amid indications that Pakistan is all set to hit further lows amongst the world’s most corrupt nations. corruption has increased in Pakistan as the country dropped to 34th from 42nd in the ranking of global corruption index. The News Chairman TIP Adil Gilani lamented that the government did not show any interest in probing these cases of corruption. the Public Accounts Committee of the National Assembly and the PPRA. Amongst the mega corruption cases. He. including country experts and business leaders. He explained that the TIP referred a number of corruption cases to the NAB but it did not proceed even in one single case. with 10 indicating the least corrupt. the Transparency International Pakistan has claimed that the TIP alone has identified corruption cases worth Rs 300 billion in different federal government departments during one year. He explained that generally the identified corruption cases involved violation of the Public Procurement Regulatory Authority (PPRA) Rules of 2004. causing a loss of over US$ 2 billion. said that it was only the Supreme Court of Pakistan. 15 . which took notice of some of these corruption cases. anassessment of risks for investors. the government awarded 14 contracts in violation of the PPRA rules as also stated in the ADB report. however. Gilani expressed his disappointment that there was no effective accountability apparatus presently operational in Pakistan due to which corruption was on the rise. showed that 132 of the 180 nations reviewed scored below five on a 0-to-10 scale.
He added that the Trading Corporation of Pakistan awarded contracts at exorbitant rates to cartels of Stevedores and Transporters in 2009. had taken been up by the Supreme Court of Pakistan.He said that the TIP also wrote to different authorities about corruption in Pakistan Steel. which might have caused a loss of at least Rs 40 billion to the national exchequer. Gilani also talked of the alleged violation of Pubic Procurement Rules 2004 by Pakistan Railways in the tender for procurement of 150 locomotives. Regarding the OGDCL. The project. causing loss of over Rs2 billion. This corruption case. whose sale policy and procurement had caused reported loss of Rs 22 billion. which made headlines in the recent past when Prime Minister Gilani appointed his jail mate and a convict who was not even a graduate as its managing director. 16 . he said. is presently on hold. though ignored by the government. wheat and fertiliser. Gilani said that the TI had also reported to the government authorities about the purchase of compressors for $30 million for Qadirpur Gas Field without inviting public tenders from M/s Valerus. which is a violation of the Public Procurement Rules 2004. only US made. He said the TIP also reported another violation of the Public Procurement Rules 2004 in tender for supply of rental drilling rigs costing the Government of Pakistan Rs 3 billion per year.
The federal cabinet comprising almost a century of ministers/advisors is a classical example of wasteful expenditures. and noted that the Auditor’s report contained 20 audit observations on government ministries and 19 audit observations on statutory boards. 1352. respectively. revenue losses in assessment/collection of taxes. The irregularities include non-transparent procurement. Pakistan International Airlines. 17 . the losses suffered in the public sector enterprises such as Pakistan Steel Mills.537 billion. simplicity adopted.206 million. in violation of section 73 of sales tax act 1990 cost the exchequer Rs 424. nonrecovery of arrears etc. Besides.054 billion in both the direct and indirect taxes at Rs54.PPP’s Massive corruption in public sector: PAC Public Accounts Committee in its latest report has pointed out grave irregularities and incompetencies of government sector. weak access controls in computer systems. The committee considered the government’s financial statements and the report of the Auditor-General of Pakistan.030 cases indicates unacceptable monitoring of withholding tax. especially in Federal Board of Revenue. circumvention of internal controls. expenditures on foreign visits made need-based. Non/Short realisation of sales tax. It revealed the government’s devastating failure in checking the financial irregularities and losses incurred in the public sector organisations and taking initiatives for optimum utilisation of scarce resources. Pakistan Railway and others also needs to be looked into.3 billion credit from the IMF with tough conditions attached to its standby credit. Surprisingly that huge loss of Rs22 billion suffered by the Pakistan Steel did not bother the government and the Supreme Court had to take suo motto notice of this huge loss. The question arises considering the statements of leakage of more then 500 billion rupees every year will it be fair expectation the government would coup the financial crunch. in its audit report2007-08 laid out monetary and bureaucratic irregularities in the Federal Board of Revenue to the tune of Rs 101. FBR officials earlier this year had exonerated one of their colleagues found involved in an inadmissible tax refund of Rs140 million to a private pay-phone company. A chosen sample of only 3. It is time that the expenses in the offices of high-ups and of the enterprises in public sector should be substantially curtailed. which is a watchdog institution.517 billion and Rs46. short levy and non-levy of taxes and penalties. The policy makers still pay no mind to the untaught expenditures of the government functionaries. keeping in the dark both the PM’s Secretariat and the committee. unfair payment practices and wrong information in the accounting system.989 million while the inadmissible input tax adjustments\credit. and lapses in governance structure and financial operations. It has also sought financial assistance from the Friends of Pakistan who pledged $5. additional tax and penalty denied Rs. inaccurate records of state land and buildings. And yet they enjoy free lunches out of taxpayers’ money and are exempted from taxation. the government in addition to imposition of VAT is also trying to secure foreign aid to reduce fiscal and balance of payments gaps it has secured $11. The AGP. While making efforts to raise tax revenues. deficiencies in land sales procedures and accounting controls. use of official vehicles rationalized and remuneration/perks reduced.513 billion in April 2009 but very little has been disbursed so far.
150 million on behalf or recovery of government dues. Peshawer. 20 billion. report revealed.79 million. 24 million.838 millions due to negligence of Collectorate of customs Lahore. In addition it also surfaced a fradualant drawl of tax refund of Rs. The Report says that a short realization of custom dues due to misclassification of imported goods was 6. Non enforcement of indemnity bonds\bank guarantees has cost Rs. 18 . It also highlighted the grant of inadmissible excess rewards worth more the Rs.Non-recovery of adjudicated government revenue worth Rs.893 million was also observed in addition to sales tax irregularities of more then Rs. 1213. 234. Rawalpindi. Tax Fraud by issuance of fake\flying invoices stands at Rs. 87. Multan and Karachi.283 million.
However. the adverse impacts tend to be marginal and do not jeopardize the welfare of its people. and no vehicles to transport patients to hospitals. Eventually. In developed countries where corruption is limited to a small number of projects and where common people do not encounter corruption on a daily basis. a poor country like Pakistan. Corruption exists in the almost all countries. Such private companies often do not trust or have confidence in the local labor and tend to bring labor from other provinces or focus only on projects in urban areas resulting in the continued suffering of people living in rural communities. The following are some examples of the damage that is caused by corruption: Defective or dangerous Infrastructure – poor roads. they will not have access to educational or health institutions. Inadequate Infrastructure – incomplete roads.Impact of Corruption To a varying degree. 19 . schools. In contrast. the budget planners and donor countries loose confidence in the ability of an organization to deliver improved infrastructure and become reluctant to provide further funding. the degree to which corruption adversely impacts common people’s lives and increases poverty is directly proportional to the level of corruption and how wide spread it is in the society. water projects. badly constructed college buildings. bridges or housing units. corruption has a significant impact. As people of rural areas are poor and cannot pay for any services. railway tracks. no medicine for patients. where each paisa must be spent to uplift people from poverty. Hospitals that have inadequate number of beds. Alternatively donor agencies force privatization of infrastructure building and delivery of services giving contracts to companies that specialize in urban areas. Technical and Engineering schools that lack laboratory facilities or library books. A country’s or province’s development depends on how much of that country’s resources are lost to corruption. hospital facilities. dams that cannot stop floods or buildings that do not meet original requirements. Poor education standards as Schools remain unoccupied due to absence by teachers or fewer teachers to effectively educate students. fewer classrooms in schools.
the NACS primarily targets politicians. Although the military regime itself has been perceived as relatively clean. which has preventive. According to the analysis presented in the NACS. the NACS process has been compromised by the perception that NACS could be motivated by political motivations. The National Anti-Corruption Bureau (NAB) Pakistan's main anti-corruption body is the NAB. The current chairman of the NAB. current anti-corruption efforts are not promising and there has been significant backsliding as of late. while ignoring military and security personnel. Judges and military officers as well as political allies of the government have been virtually immune from any investigations or being held accountable for their actions.) policy recommendations that have not been supported by a concrete plan of action. Mr Nawid Ahsan is not a ranking member of the military. Government anti-corruption initiatives intensified after 2002. as developed by Transparency International. Many immune or pardoned beneficiaries of the NRO were appointed to important ministries and included ministers or public officials.) political will that has not been sustained over the years and ii. According to TI Pakistan. starting with the design and implementation of the National Anti-corruption Strategy (NACS) by the National Accountability Bureau (NAB). enforcement and public awareness functions. As a result. this has been because of two major reasons: i. The NAB is widely perceived to target politicians and civil servants from preceding civilian governments. Traditionally its chairman has been appointed by the President from among senior military officials. the NACS is especially useful for its analysis and diagnosis of the Pakistani corruption situation and the detailed programme of reforms it recommends. The main problem has been the decision by President General Musharraf in 2007 to grant immunity to corrupt elements and bar legal action against ministers and parliamentarians (unless prior clearance has been given). These actions have been sanctioned under the National Reconciliation Ordinance (NRO). discrediting political opponents and junior government officials. the NAB has always been strongly influenced by the military. 20 . which amended in October 2007 the National Accountability Ordinance of 1999 that had guided the country’s corruption-related work. civil servants and business people. the process has been initiated by a military institution in a military-led country. The National Anti-Corruption Strategy in Practice The NACS does not refer to specific programmes but is structured around the pillars of the National Integrity System (NIS). Its mandate is to investigate and prosecute corruption cases and it publishes annual reports on its progress. According to a U4 report. going back to the early days of independence. the results have been limited. Although it is formally independent. However. However.Government’s Efforts against Corruption in Pakistan Pakistan has long made official commitments to fighting corruption. such as to ensure President Musharraf ‘s election in 2002.
o Legal system and judiciary. Each pillar will act as a watchdog on at least one other and will support each other in keeping the desired level of integrity. nature. This mix came in handy at places like Peshawar. support each other and will in turn help maintain high standards of national integrity and low levels of corruption. a concept borrowed from the Transparency International and adapted to local needs. Public Accounts Committee. cultures and traditions. and o Private sector 21 . The constitution of the NACS Project Team itself was an exercise in participation in that it consisted of government officers from a range of Ministries and Departments. Develop an integrated framework for tackling it with focus on prevention along with enforcement. and Recommendations Having traced historically the anti-corruption efforts and the need for a holistic approach to fight corruption. The purposes of the NACS were to: • • • Undertake a review and assessment of the causes. Quetta. o Civil society. not to undermine the contribution made by the international consultants that the project had the benefit of engaging. These pillars are: o Legislature and the political system. Kohat. and other remote areas. o Public accountability bodies: Auditor General. We will begin by describing the objectives of the NACS. The NACS is structured around the pillars of the National Integrity System. and Create an implementation action plan for containment of corruption. Constituting a team of indigenous officers was important since the consultation process envisaged had not only to have representation from different public sector organizations but had to have the cultural and lingual mix necessary to undertake it throughout a country with diverse languages. o Media. extent and impact of corruption in Pakistan. and the Ombudsman. which if operating with high standards of transparency.NACS — Objectives. however. This concept entails that a country’s national integrity system comprises of pillars or sectors. accountability and effectiveness. o Anti corruption agencies. we will now delve into the formulation of the National Anti Corruption Strategy (NACS) of Pakistan. the process followed for its formulation and the different phases it passed through till completion and formal approval by the Government for implementation. o Executive. This is. Process.
The Consultant’s Report on Policy. Operational Information and Intelligence Collation Systems o Developing indigenous Technical Support and Surveillance Capability o Instituting Physical. Electronic and Information Security Systems o Enhancement of Human Resource/budget for the NAB Most of the above recommendations have been implemented and have greatly improved the investigative. Organization and Structure Review of the NAB made a set of recommendations. A Small Scale Technical Assistance (SSTA) was provided jointly by ADB and DFID for restructuring/strengthening of the NAB. prosecutorial and management capabilities of the NAB 22 .Strengthening of Anti Corruption Agencies (ACAs) One of the recommendations of the NACS was to strengthen ACAs in general and the NAB in particular being the anti-corruption arm of the federal government. the most important of which are: o Revision of Policy and Operating principles o Formulation of table of Delegation of Powers o Defining job descriptions o Preparation of Manual of Operations and Standard Operating Procedures for all NAB functions o Conduct of training Needs Assessment and development of Training Modules o Instituting Management Information. This recommendation called for improvements through organizational restructuring and enhanced functional capacity of the NAB.
This success is threatened by the evil of corruption that must be stopped on urgently before it is too late. donor agencies and common people recognize the carnage that current levels of corruption can do to the heartlands of Pakistan. who until now have refused to fall in the trap of extremism. deteriorating economic conditions. civil society organizations. They must form a grand coalition to stop the menace before it is too late. private companies. government officials. It is imperative that all stakeholders including political parties.Conclusion The future of Pakistan and alleviation of poverty in rural areas of Pakistan is highly dependent on successful and completion of all development projects. and worsening living conditions are unnerving the people of rural Sindh and Balochistan. The religious extremism. 23 .
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