Business Magazine

When Will Pakistan Say No to Corruption?

Posted on the 08 August 2011 by Center For International Private Enterprise @CIPEglobal
When will Pakistan say no to corruption?


In 2010, Transparency International (TI) ranked Pakistan as 34th most corrupt country in the world (143 amongst 178 countries surveyed). According to the TI report, the overall corruption trend in Pakistan is alarming. For example, in 2009, $2.3 billion were siphoned out, increasing to $2.63 billion in 2010. This latest report highlighted the government’s unwillingness to plug the holes in the management of various public agencies and state-owned enterprises to stop this pilferage. That led to a scuffle between TI and the ruling PPP (Pakistan Peoples Party) government, resulting in Transparency International Pakistan’s (TIP) inability to conduct a survey this year.

According to the 2010 National Corruption Perception Survey (NCPS), tendering has been among the most corrupt sectors which – as Syed Adil Gilani, Chairman TI Pakistan noted – “eats away at least 40 percent of Pakistan development budget.” One of the key causes of corruption is the appointment of corrupt people at the senior positions in government departments and in the public sector companies. Recently the Supreme Court has taken several suo moto notices (i.e. notices taken on the Court’s own initiative) exposing corruption in the public sector and a number of cases stemming from mismanagement and corruption involving questionable appointees are being heard at the Court. For example:

  • National Logistic Cell – improper investment of $0.05 billion of NLC’s money in Stock Exchange; NLC is the largest logistics and freight-handling company in Pakistan.
  • National Bank of Pakistan – financial mismanagement causing massive losses to the NBP (largest financial institution in the public sector) and national exchequer.
  • Evacuee Trust Property Board – This trust was created at the time of the Partition and still has property worth billion of rupees under its ownership, most of which is rented out. A recent scandal involved investment of $11.65 million of trust money in real estate business at a speculative profit rate of 34 percent, lacking the approval of Federal Government, State Bank and Securities & Exchange Commission, and violating rules for investment of public money; this action created a financial burden on the 45,000 poor tenants of the trust properties.
  • Oil & Gas Development Corporation Ltd – appointment of the managing director was cancelled by the Supreme Court based on his prior conviction in a corruption case; OGDC is Pakistan’s largest oil and gas producer.
  • National Insurance Corporation Ltd – illegal investment of $0.02 billion in real estate; NICL is a leading insurer of public properties.

Such a phenomenal increase in corruption in Pakistan has damaged the country’s reputation. The first step towards improving Pakistan’s credibility and reducing corruption at the highest level is to ensure that honest officers are appointed through proper merit procedures. That will start only by appointing credible persons to the federal and provincial public service commissions, which are agencies responsible for appointing civil servants, and empowering them to select and place qualified and credible staff at the state-owned organizations.

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