Pakistan PM Faces Corruption Probe
- Today’s 3-2 verdict by the Pakistan Supreme Court orders a Joint Investigation Team (JIT) to examine the offshore assets of Prime Minister Nawaz Sharif and his family.
- JIT will present its findings in 60 days.
- The Prime Minister and his ruling party celebrated the verdict while opposition parties called for his resignation.
- The investigations and subsequent ruling will play a key role as political parties gear up for Pakistani elections expected in 2018.
- Today’s court’s decision to not disqualify or remove the Prime Minister ensures that pro-investor and business policies will continue in Pakistan the near- to medium-term.
Leaked documents initiate a year-long accountability process
Calls for accountability of Prime Minister Nawaz Sharif and his family began in the wake of revelations made last year by the International Consortium of Investigative Journalists’ (ICIJ). In April 2016, the ICIJ released confidential documents on 214,488 offshore entities. These documents, which originated from Panamanian law firm Mossack Fonseca, included details on eight offshore companies linked to the family of the Prime Minister.
Ruling party celebrated while the opposition has called for the resignation of the Prime Minister.
Opposition parties, led by Pakistan Tehreek-e-Insaf (PTI) Chairman Imran Khan, called for an investigation into the matter. In October 2016, after twice rejecting demands of an inquiry, Pakistan’s Supreme Court formed a five-member bench to hear the petitions filed by multiple opposition parties. The petitions sought the disqualification of the Prime Minister under Articles 62 and 63 of the Constitution.
The hearings for what the press called “Panamagate” received worldwide media attention after beginning in November 2016.
A split 3-2 judgement in favor of the Prime Minister and comprising of over five hundred pages was unveiled on April 20, 2017, almost two months after the conclusion of the hearings. The ruling party celebrated the judgement, with Prime Minister Sharif’s daughter tweeting celebratory pictures of the Sharif family and friends.
Opposition leaders, including former president Asif Ali Zardari of the Pakistan People’s Party (PPP) and PTI chairman Imran Khan, called for the resignation of the Prime Minister, arguing that the JIT could not conduct an independent inquiry into the Sharif family’s offshore wealth while he ruled the country.
Supreme Court refuses to disqualify the PM, for now
The ruling party breathed a sigh of relief as the majority ruling neither disqualified the Prime Minister nor asked him to step down as the probe continues. The ruling, however, does not bring an end to investigations against the Prime Minister and his family. A six-member Joint Investigation Team (JIT) will be formed in the next seven days and will be approved by and report to the Supreme Court bench.
Comprised of officials from the Federal Investigation Agency, National Accountability Board, State Bank of Pakistan, ISI, and Military Intelligence, the JIT will conduct an investigation into the money trail of the Sharif family’s offshore assets and present its finding to the courts within sixty days.
The dissenting opinion in the judgement was scathing in its assessment, with Justice Asif Saeed Khosa, head of the five-member bench, saying that explanations offered by the Prime Minister and his family regarding their offshore assets “were quite likely to be untrue.”
The road ahead for the Prime Minister and his family is far from clear as the Supreme Court will issue yet another ruling following the conclusion of the JIT investigations. As Pakistan heads into election season, continued scrutiny about the offshore assets and wealth of the Sharif family could become a liability for the ruling Pakistan Muslim League (Nawaz).
Businesses react positively to the judgement
Since coming to power in 2013, Prime Minister Sharif has restored macroeconomic stability and business confidence in Pakistan and the country fully completed its first-ever IMF aid program. Large-scale infrastructure and power projects, coupled with a tremendous rise in Chinese investment under the China-Pakistan Economic Corridor (CPEC) has led to the highest levels of economic growth in the last decade.
Investors hailed the decision and the KSE-100 index rallied by 1,140 points following the announcement.
Pakistan’s benchmark Karachi Stock Exchange rallied by 1,140 points following the announcement of today’s ruling, a clear sign that investors in the country are keen to see the continuation of political and economic stability. Heavy investments in infrastructure and a tame inflation environment has led to a boom for cement, steel, and consumer durables and non-durables manufacturers.
Historically, the ruling party has been seen as business-friendly. The court’s decision to not disqualify or remove the Prime Minister ensures that pro-investor and business policies will continue in Pakistan the near- to medium-term.