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Editorial

Exploring the ethical and moral dimension of establishing offshore companies in Panama

Editorial

The International Consortium of Investigative Journalists has exposed the offshore finance industry in what have come to be known as Panama Papers or Panama Leaks. They reveal about 11 million leaked documents about “heads of states, criminals and celebrities using secret hideaways in tax havens”.

There are reports of many more leaks to be made public in May this year. But what has come out in the open has raised enough hue and cry, particularly about the politicians in power. These leaders have been put in the dock by the electorate as well as the media, asking them to explain their position, preferably after resigning from their positions.

A few resignations have already come about and at least one prime minister, of Britain, has done a lot of explanation and promised reform but not without losing his popularity ratings.

The heat of Panama Leaks has been felt close to home as well and, not unsurprisingly, the brunt is borne solely by the prime minister whose children’s names are a part of the glorious list of those holding offshore companies. At the time of writing these lines, by some strange quirk of fate or coincidence, both the prime minister and the leader who is supposed to grill him most have ended up in the UK, ostensibly to conduct some business that is not connected with this scandal.

But is it even okay to call this a scandal? Well, everybody is agreed that the act of doing business in this manner may not be exactly illegal. But it certainly has an ethical and moral dimension, with reference to the possibility of tax evasion and money transfers. That is precisely why the politicians or heads of state whose names have appeared seem to be in a bigger mess than others.

In the context of Pakistan, it has exposed the fragility of the political system on so many different levels. There is a sense of insecurity about the civilian political system per se and what might come to replace it. Some have argued how this is a reflection of weak political parties which consistently rely on moneyed people and distort the system. But it looks like this scandal will further weaken the political parties (at least one major political party is still reeling under the weight of allegations of corruption and lost an election because of them).

Yet, the broader concern everywhere is that something must be done about this systemic corruption that is responsible for extreme inequalities and sharper class divisions. Unfortunately, the weakened political system does not allow for people to get together and stand up for their rights except, in our case, from the platform of religious political parties or religious groups.

The media has had an important role in bringing the Panama Papers to light in the first place and, hopefully, will continue to play that role in bringing about long term reform in a country like Pakistan. Rulers who try to evade taxes lose all moral authority to ask or expect people to pay taxes. They inevitably rely on international donors to keep the economy rolling like they have done in Pakistan’s case.

Our Special Report today is an attempt to improve understanding on this issue and look at its repercussions.

Editor

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