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Author : Sabina Babar

MPhil International relations Quad-e-Azam University


Phone number: 03317797790

Subject op-ed: Panama leaks reveal of flaws in governance structure

“When sorrows come, they come not single spies. But in battalions!” The maxim explains Pakistani
politics of last decade more than any situation of Elizabethan times as the Pakistani political
landscape, marred by internal political strife and numerous surfacing scandals, is constantly drifting
to uncertainty in its viability as a sustainable system. The latest and strongest of all the jolts to the
system are Panama Leaks that have challenged legitimacy of many ruling houses in Pakistan.
Nonetheless, no matter what happens to the fate of ruling Nawaz family, one of the main questions
behind the biggest leak of private documents seen on the Internet is whether we should care at all
about the existence of a global web of corruption, and whether something will be done about it. The
answer is positive on both counts. In a world of extreme inequality and massive social problems such
as ours, the economic, social, and political effects of tax avoidance due to the existence of tax havens
are enormous. Without taxes, societies will struggle to function as they will be unable to provide
essential public services. But while workers and small-to-medium-sized businesses are paying the
full tax rate, global corporations and the super-rich have been paying fewer and fewer taxes over the
years with the concomitant growth of the world economy and the spread of offshore tax
havens. Welcome to global capitalism, tax injustice, and the undermining of democracy. The
involvement of influential names in the leak, such as that of Russian leader Vladimir Putin and the
sitting presidents of Argentina and Ukraine, and the prime minister of Iceland and Pakistan, to name
just a few of world leaders implicated in the Mossack Fonseca scandal, will undoubtedly produce
global political shocks and may lead, one hopes, to a global spring on global governance.
The Panama Papers leak reveals that offshore companies such as Mossack Fonseca need to
come under very close scrutiny as they are not illegal in themselves but aim to conceal the identity of
the true company and fund owners. They prove beyond doubt that corruption and massive tax
avoidance are pervasive throughout the world, not confined merely to lands where only authoritarian
and oppressive regimes exist. The important aspect the Panama Papers leak reveals that, it is not just
the global tax system that is broken, but global governance itself. Panama Papers’ leakage have
opened up a new debate about ethics of governance as the papers carry information about how
specific class is manipulating our governance system for not paying taxes and transferring the ill-
gotten money through parallel banking systems to various tax heavens and later on layering of the
same money through off shore companies in buying expansive properties across the globe. The
process, on one hand is widening the economic divide within a society as the non-tax payer rich
getting richer at the expanse of the poor who pays his taxes but is deprived of his share of social
guarantees in return. Unfortunately, being part of the ruling elite or getting knotted to the power
corridors, this affluent class is not answerable or accountable to anyone. These documents have
resurrected classic concepts of philosophers like Plato, Joseph Ellul, Thomas Dye and Aristotle about
ethics of governance and formation of a just society.
Conferring to Aristotle, dynamics of governance are the concepts of oligarchy (egalitarianism and
tyranny) and aristocracy (polity). In today’s political structure Oligarchies are one presiding in the
governance system; it’s a group of well-heeled people, landlord, businessman, royalty or powerful
military persons, ruling for their own personal gains. Politicians are ethically certain to take decision
for the people they represent and their decisions are bound to result into a tangible outcome in the
form of betterment of their people. But Panama Papers reveal breach of this trust between ruled and
the ruler, as the latter is found manipulating and designing the system to allow riches to avoid taxes.
This process of personal gains results in change of important pillars of governance (constitution,
legislation). Through circumstantial breakdown of this subject, it gives us proper insight of flaws in
our ruling authorities and our power structure.
In Panama leaks, the prominent names of Pakistan’ business community and politicians are included.
These are people who belong to specific ruling class in Pakistan and are representative of majority of
Pakistan’s population living below the poverty line. This difference in ruling class and general public
is so high that it actually gives them space to rule according to their needs. Panama papers are
portraying the flaws in power dynamics of Pakistani society at certain levels. In contrast, when we
question why Americans’ have no single name in panama paper? The simple answer is that in US
executives there is proper scrutiny of those who are part of governance. Discerning the American
governance structure is somewhat portraying the optimistic side of America. US governing bodies
elect the participant on defined facets and even on presidential level respective person is accountable
for his assets during his retro of stay. Proponents of American of political structure have to show
their assets, sources, at every step they are examined by proper firms system. In Pakistan the case is
opposite, here business class is the ruling one though there isn’t issue with which class is governing
but concern is they have to work in interest of general public and not for their personal gains. Here
there is not comparison of US and Pakistani governance system its simple a process of check and
balance that is in applied form and visible in US but not in Pakistan.