Last year Nawaz Sharif made a triumphant return to Pakistan when he was re-elected as Prime

Minister for a third (non-consecutive) term. He rode to success on a wave of frustration directed
at the previous establishment, which had been dogged by accusations of corruption and abuse
of office. In line with his campaign promises, Sharif has said, on the government of Pakistans
homepage, that curbing corruption ranks very high on the agenda. But new figures on tax
evasion released last month show that Sharif, nine-months into the job, still has a long way to go
to make good on his pledge to clean up Pakistans politics.
Last year, Transparency International, in their annual survey of corruption across the globe,
ranked Pakistan 127 of out 177 countries, a slight improvement on 2012 when the country
languished at 139. Transparency Internationals Corruption Perceptions Index covers abuse of
power, secret dealings and bribery. On a scale from 0 (highly corrupt) to 100 (very clean)
Pakistan scored 28 the same as Russia, Mali and Lebanon. Compared to its South Asian
neighbors, Pakistan sits beneath both India (ranked 97/177) and Nepal (ranked 116/177), and
scored only one point more than Bangladesh. The only country in the region that Pakistan
bested was Afghanistan, which, with a score of 8/100 on transparency, is ranked 175/177 (jointly
with Somalia and North Korea) as one of the worlds most corrupt states.
Though imperfect, the Transparency International ranking points to the scale of the problem.
The World Bank, in its global governance index, finds that across four categories government
effectiveness, regulatory quality, the rule of law and the control of corruption Pakistan has
been on a downward trend since 2007. These lamentable findings are reflected in surveys of
public opinion. In a 2011 Gallup Poll, 81 percent of Pakistanis felt that government corruption
was widespread.
Figures uncovered last month by Pakistans Center for Investigative Reporting (CIR), an
independent research group, shed fresh light on the complexities of corruption. The data was
drawn from Pakistans Election Commission, an independent body that compiles the financial
declarations and tax statements of political candidates. According to the CIR, almost 50 per cent
of Pakistani lawmakers pay no tax at all, and more than 1 in 10 have never registered with tax
authorities. Those that do pay contribute negligible amounts. 2010 figures from the Institute of
Legislative Development and Transparency estimate that legislators in Pakistan have a net
worth, on average, of $800,000. And yet, according to the CIRs report, many pay less than
$100 in tax, with some contributions as low as $17.
According to Reuters, less than one per cent of Pakistani citizens file tax returns, giving the
country a 9 percent tax-to-GDP ratio one of the lowest in the world. The Express Tribune
reports that the cost of corruption to Pakistans economy amounts to $133 million per day, $66
million of which is evaded taxes. This endemic tax evasion has encouraged a race to the

bottom. As Umar Cheema, the author of the CIR report complains, if politicians dont pay taxes
themselves, they [lose] the moral authority to impose taxes on others.
Rampant corruption threatens to undermine the flow of billions of dollars of investment and aid
into the country. Combatting corruption is one of the conditions of a $6.7 billion IMF aid
programme, and there are reports that major donors, such as the UK, are reconsidering their aid
commitments in light of the countrys persistent failure to combat corruption. Pakistans energy
sector has had funds leeched out of it, resulting in an energy crisis that is stunting the countrys
economic growth. Deep distrust of Pakistans policy elite and concerns over security have
further eroded investor confidence. With an ailing economy, Pakistans government can ill afford
to allow these streams of finance to dry up.
Most of the key players in Pakistani politics have been hounded by allegations of corruption.
2013, however, marked a comprehensive changing of the guard: Sharifs fted return was the
countrys first ever civilian transfer of power, and the anointment of more moderate figures to
head the countrys military and judiciary are changes that many hope mark the end of a period
of apathy on the issue of corruption. Fingers have been pointed at Sharif in the past over claims
of financial impropriety, but he is sending all the right signals now. Again on the homepage of
the government of Pakistans website he writes, The menace of corruption has thwarted all
efforts aimed at institution building and improving public service delivery. He is aware of the
problem. Let us see what, if anything, he does about it.