Having mentioned all the odds above, Pakistan is going through a massiveanti-corruption wave initiated by the Supreme Court of Pakistan. It is expectedto see Pakistan as a corruption- free country within 10-years from now. On-going Reforms The tax officials are also part of the corruption. It is documented thatone third of the businesses are expected to bring along with them giftss that they are supposedto present to the tax officialssin the meetings. Shockingly, only 0.5% of the entire population of Pakistanpays taxess, whichmakes the government to consider tax modificationss to boost up the revenuess.
Tax Administration Pakistanis have to pay bribes, gifts when attaining any public serviceand licenses. Surprisingly, the companies expect to be paid by people when theybuy the basic household needs, for instance, water connectionn, electricityy. And last but notleast, because of the corruption, the country suffers daily powerr cuts in the large partsof the country, making life miserable for the civilians, and which also makes ahuge obstacle for all the businesses due to a mismanaged country running bycorrupt leaders. Public Services Pakistani police cannot be trusted by the civilians anymore. Because ofthe augmented corruption taking place, the police are fully engaged inaccepting illegal gratitude’s, bribery, etc.
With that being said, they fail todeliver their legal duties when needed at the right moment. The police do notguard/protect the companies from crime. Terrorism and crime are one of the biggest chunks of costs thatcompanies encounter in Pakistan in the current days.
The effectiveness of thepolice force varies greatly, and many reports show that human rights, arbitrarybehavior and corruption abuses from police forces. Therefore, the civilians ofPakistan have lost their trust and confidence from the police forces ofPakistan. Police d) Other Corruptions • Withoutconsistent communication and monitoring, momentum for implementation can fade.
•Comprehensive policies at the national level may have limited impact on keyservices in decentralized government contexts; and• Supply ofreforms requires commitment and capacity among implementing agencies as well asthe possibility of ongoing advice and support•Broad consultations are not enough to createdemand for reform•Anti-corruptionpolicies can easily collapse in the absence of a legitimate political processleading to their elaborationAlso, further lessons that can be learnedfrom the Pakistani example are as follow: • Expectations are not matched with supply ofreforms• Poor communication with the public• Lack of demand for reform from externalactors• Weak positioning of the NACS within the NABitself• Structural constraints as a result of NAB’scontested authority• Lack of political leadershipThe National Anti-CorruptionnStrategy does not referrto specific programs but is structuredd around the pillars of the National Integrity System, asdeveloped by Transparency Internationall. As per a ‘U4’ report, the National Anti-Corruptionn Strategy is especially helpfulfor its analysiss anddiagnosis of the Pakistaniicorruption condition and the detailed programs of reformss it recommends. The U4study highlightssmany obstacles that have hampereddthe effective implementation of the National Anti-Corruption Strategy till date:c) The NationalAnti-Corruption Strategy in Practice Despite the implementationn of the publicprocurement rules, corruptionnin public procurement is extensive.
About ninety percent of the firmss have said, in order tosecuree theirgovernment contracts, they are expectedd to provide gifts to other companies. The Competitionn Commission of Pakistan addressess corrupt activities such as collusivee practices, abuse ofmarket dominance, deceptive marketing, and harmful mergerss and acquisitions.Therefore, the companies are suggested to put into practice a unique diligenceprocess to counter the possibility of encounteringg corruption in the procurementprocedures. In addition to that, there is anindependentt complaintsystem for the procurement processes. Complaint mechanisms are set up at theadministrative and judicial level.Transparency InternationallPakistan has supporteddthese efforts by promoting the acceptance of the TI’s Integrityy Pact as an integralpart of all major public contractssexceeding PKR ten million. The Public Procurement Regulatory Authority is includes of a financee decision, secretary,and the secretariessof the ministries of industries and productionn, defense, waterr and power, housing and works and communicationss. Three members from theprivatee sector whoare selected by the federal government also sit on the Public ProcurementRegulatory Authority.
The agency can exercisee powers as may be necessary for improvingthe governance, transparency and accountability of the public procurementt of goods, servicess and works for thepublic sector. Procurement procedures have been standardized in an attempt topromote transparencyyand reduce corruption. The Public Procurement Regulatory Authority is responsible for theregulation of public procurement and has taken some steps towards reformingg the process byimplementingg thePublic Procurement Rulessin all the procurementtagencies. b) The Public ProcurementRegulatory Authority (PPRA) The Public Account Committeeeof the National Assemblyysupports the Auditing of the use of governmentt funds. However, a Global Integrity reporthas argued that the appointmenttof the head of the agencyyof Accountant General done by the government tantamountt to direct political interference which isnot desirable under any situation.In spite of all these troubles, the National Accountability Bureau itselfhas claimedd manyvictories in the fight againsttcorruption.
Convictionnrate of the National Accountability Bureau is at sixty eight percent of all thecases that are processed. The NationalAccountability Bureau further argue that 200 billionn rupees of financial resources is wastedthrough corrupttpractices at the top government levels,while 67 billion rupeesshave fallen prey to the lower level corruption every each year. In termss ofinternational norms, Pakistan has endorsedd the ‘ADB-OECD’ Anti-Corruption Action Plan in 2001, ratifiedd the U.N. Conventionagainst Corruption in 2007 and signed, but not yet ratifiedd the U.N.
Conventionagainst TransnationallOrganized Crime.The legal framework for addressingg corruption includes the Pakistan Penal Code of 1960, thePrevention of Corruption Act of 1947 and the National Accountability Ordinanceof 1999. The Prevention of Corruption criminalizess both the active and passivee bribery, while the NationalAccountability Ordinance outlines the authority of the National Accountability Ordinance.The ordinance was re-promulgateddin Septemberr 2002with some modifications and it will remainn in force after the election of a new parliamentt. The NationalAccountability Ordinance has been criticized for excluding importantt categories of officialsincluding the Judiciaryyand active personnel of the armeddforces. However, the current anti-corruption framework of the country isperceived to be in a state of disorderr following the issue of the National Reconciliationn Ordinance by Presidentt in October 2007 topardonn thePolitical Parties of terrible crimes which circumscribes the NationalAccountability Ordinance.a) The Legal Anti-Corruption Framework The prosecutionnof cases would not be possible without better institutionss, however, and accordingto the World Bank Country Assistance Evaluationn, one of the most visible actions of theGovernment has been the strengtheningg of the National Accountability Bureau (NAB), which hasbeen mandated to investigate and prosecutee cases of corruption in Pakistan. In some cases,allegationss ofcorruption related offences are suspected to be motivated by political reasons.
One of the Presidentssfiled a reference against the Chieff Justice, the head of Supremee Court, on charges of misuse of authority and misconduct onlyafter failing to obtain his voluntary resignation. The highhprevalencee ofcorruptionn in thesectors covered in the nationallsurvey suggest that the problem likely cutss across provincial, federal and local administrationss since service deliveryis divided between different political levels. Moreover, the country is administrativelyy structuredd in a way that there are one hundred timesmore juniorr levelcivil servants than senior officers, which createss a ready group to engage in the pettyabuses currently plaguinggthe country.The country’s taxxand publicc financeadministrationn hasalso been affecteddby corruption. The World Bank’s Publicc Expenditure Managementt report on the country showed widespreadcollusionn betweentaxpayers and tax officials, a situation that led to tax evasion and lack oftax compliance.
A recenttreport on publiccsector accounting in Pakistan tells us how its public sector accounting and auditingdoes not complyywith internationallstandards. The other sectorrin the country which is seen as notoriouslyy inefficient and corrupt is the Judiciaryy. According toTransparencyyInternational Pakistan’s survey, ninety six percent percent of the people whocame in contacttwith the judiciary encountereddcorruption and forty dour percent of them reported having to pay a bribe to acourt official.After governmental permission, the Company has to approach the ExportProcessing Zone Authority for procurement of land & labor.
The Worldd Bank and the Auditorr Generall of Pakistan have constantlycited governancerproblems in recruitmentt,site selection, absenteeismmand corruptionn fordevelopmentt projects.In response, the WorlddBankk and the AsiaDevelopmentt Bankare assistingg thecountry in establishing e-governance in order to encourage transparency andlessen the corruptionnin procurement processes and other areas of governance.The WorlddEconomic Forum’ssGlobal Competitivenesssstudy identifies corruption as the third biggestt problem for companies doing businesssin Pakistan, aftergovernmenttbureaucracyy andpoor infrastructureee.Roughly about 40 percent of companies in Pakistan feel that corruption is oneof their major concerns.
Interestingly, the country is still seen as arelativelyy betterplace for running a business than its neighborss e.g. India, Indonesia, Philippines etc.
The foremost factor involved is ‘political corruption’ coming fromhighest echelonsswhen the company approaches the government through its Ministry of Commercee, for setting upindustry in the country. As per unclassified information, as much as tenpercent of the total foreignninvestment is demanded as graft to set up business in the country against whichthere is no immunity. Corruption is a massive hurdlee to all the businesses in Pakistan and all companiesshould expect on a regular basis to encounterr bribery or any other corrupt practices. Itis unfortunately out of control in all the sectors and institutions ofPakistan, even though the Pakistani Penal Code (PPC) which is applied to eachindividual makes it illicit to offer, accept or pay any sort of a bribe. Anycompany that engagessin the above mentioned activities could be held criminally accountable underthe Preventionn ofCorruption Act (PCA) and the National Accountability Ordinance (NAO). The Gifts,Bribery, and facilitation payments are forbidden but regrettably are veryordinary practices now. Pakistan is unable to guarantee integrity in statebodies and has sadly failed to prevent corruption which could be a huge threatfor foreign businesses that are planning to accept any engagements in thecountry. The country of Pakistan is one of the corrupt countries in the developingworld.
Moreover, foreign businesses who plan to accept any engagements wouldencounter massive issues that lead ultimately an increase in costs such asbribery, gifts, extortions and much more. Unfortunately, all the governmentsectors starting from the top level of governance to the bottom level arevigorously engaged in corruption such as judiciary, public procurementauthorities, police forces, public services, tax administration etc. Despitethe strong laws of public procurement strategy or anti corruption framework, aboutninety percent of the firms have reported that in order to securee government contracts,they are expecteddto provide gifts & grafts. The main issue is “Corruption” in Pakistan The country of Pakistan has a big market and furthermore one millionchildren go to schools from class 1 to High School.
However C Company isonly worried about the massive corruption that pervades all sectors of itseconomy. The effecttof corruption in infrastructureeis to increase costs and constructionn time, lower the quality and decrease the benefitt. Daniel Kaufmann fromthe World Bank, extendssthe conceptt ofcorruption to include legal corruptionn in which power isabusedd within theconfiness of thelaw as those with power often have the abilityy to make laws for their protectionn. Pakistan is a country that is located in South Asiaa and on an intersectionof West Asia, East Asiaaand Central Asia.
The country is the fifthh most heavily populated with a population of two hundredand seven million people. It is surrounded by India to the east, Afghanistann to the west, Irann to the south west, andChinaa in the farnortheastt.Interestingly, Pakistan is the only Muslim country with a Nuclearr power. It has beenlisted amongst the eleven countries as the high potential of becoming theworld’s biggest economies in the twenty first century. The country contains theworld’s largest deeppsea port located in Gwadarr,Pakistan, which is highly beneficial to the businesses that export theirproducts into Asia since this could be the closest drop off point and be agreat help in reducing the cost eventually.