An elite capture is a form of corruption where the public resources are biased to benefit a few individuals of higher social status. These individuals, because of their asset holdings, religious affiliations, political clout, and higher positions in the decision making bodies, utilize public funds, meant for the benefit of the masses, for their own interest and gain.
Dr Hamza Alvi in his analysis wrote Pakistan is an underdeveloped country with an overdeveloped state. He wrote that the elite capture of Pakistan depends on two historical legacies; the concentration of power of an overdeveloped state, and its elite.
According to a World Bank report, Pakistan’s economy is captured by four influential groups; the bureaucrats, the feudal lords, the industrialists and the military.
An independent report estimates the cost of elite capture at 860 Billion rupees per year. UNDP reports the economic privileges given to the elite groups were around 17.4 billion dollars, 6 percent of the total economy of Pakistan, More than its health and education budget combined!
Pakistan is ranked 154 out of 189 countries in the united nation’s development index which is measured by education, health, living standards, the nation’s carbon dioxide emissions, and material footprint. Sri Lanka is ranked 72. This shows the quality of life of the people of our country in comparison to the other regional countries.
George Stigler, who developed the theory of regulation or capture, says that interest groups will use the regulatory powers of government to shape laws and regulations beneficial to them.
Italian social scientists Pareto and Mosca argue that all societies regardless of the form of government are governed by one or more political elites.
Raymond Baker in his book, ‘Capitalism’s Achilles Heel’, wrote that directly contributing to the economic disparity is the dirty money whose origin, movement, or use, violates the law. Baker estimates that 11 trillion dollars which are equivalent to the American GDP are stashed in tax havens across the world.
An excellent example of state capture is the PPP government in Sindh and the PML-N government in Punjab where every state institution, be it bureaucracy, judiciary, media, or police, were controlled by them.
Razzak Dawood, a special advisor to the Prime minister, was awarded the construction of Mohmand Dam worth 309 billion rupees on a single bid basis by the present PTI government. Mian Mansha was given the MCB Bank at a peanut price by the Nawaz Sharif government.
A bench headed by Chief Justice Saqib Nisar was informed that 518 billion rupees were waived during the tenure of ex-prime ministers of Pakistan from Nawaz Sharif to Benazir Bhutto to Shaukat Aziz. The Chaudhary’s of Gujarat have waived 120 billion rupees.
Tax amnesty schemes were awarded only to the rich and powerful to make their wealth legal. The first tax amnesty scheme was awarded in 1958 by President Ayub Khan’s regime. Since then every government has been announcing this scheme to protect the interest of the elite.
Subsidies given to the elite of our country is another example of elite capture. 147 billion rupees were given during 2017-2018 as a subsidy to different sectors and all of them who got subsidies belonged to the elite class.
The Panama and the Pandora papers exposed the elite capture of a country’s resources and how the money is being siphoned out of the country, deposited in the offshore accounts and properties being purchased overseas.
The Pandora papers revealed the financial secrets of 35 former and present world leaders, 330 politicians and public figures in 91 countries. There are seven hundred names of Pakistanis in the Pandora papers which includes familiar names like Shaukat Tareen, Faisal Vawda, Moonis Elahi, Sharjeel Memon and a long list of elitist families, both with civilian and military backgrounds.
It looks like this elite belongs to all the four provinces and different ethnicities but their class interests are the same and they protect each other’s interests.
The appointment of the chairman NAB in which the government and the opposition leader have their input is a good example of protecting the class interest.
The working of NAB is really strange. It gives the impression that if you plunder the country big time you can plea bargain, give 10-20 percent of the loot to NAB, pay hefty cheques to your lawyers and with the remaining money you can live a comfortable life either in the country or abroad. Rupees1.29 billion was approved as a plea bargain for one of the directors of Pakistan State Oil who did the plunder of nearly 23 billion rupees. And if you are a petty thief you will go to jail.
Pakistanis are the third-largest investor in Dubai Real Estate and the fourth largest in the UK though the general masses in Pakistan are going from flour crisis, sugar crisis, and shortage of gas and petrol.
Elite capture is a universal phenomenon. In India, Ambani’s benefitting from the Rafael deal got a waiver of 143.7 million euros after the deal was announced.
Current Lebanon Prime minister Najib Mikati bought a house in Monaco worth 10 million dollars through an offshore company registered in Panama. Czech Republic Prime minister Andrej Babis is accused of moving 22 million dollars through an offshore company to buy real estate on the French Riviera.
Another term being coined is the Deep State Capture, where most of the state institutions are at the mercy of self-centred special interest groups. It guides the policy through internal leaks. It can operate against the agenda of the elected officials. This term surfaced quite a lot during the recent American election.
Whenever national resources are exploited and controlled by a select few, the majority of the people of that country suffer. Sad thing is that our ruling elite still behaves like our past colonial masters.