News Analysis |
World Bank has categorically denied the reports floating in media regarding “world Bank’s Remittances and Migration Report of 2016, which focus on the money laundering allegations against the deposed former PM Nawaz Sharif.
According to a NAB press release, the chairman of the bureau has taken notice of the media reports. Media reports claimed that Nawaz laundered $4.9 billion to the Finance Ministry of India, after which Indian foreign exchange reserves witnessed an increase while Pakistan suffered the consequences. The hastily given orders of the National Accountability Bureau (NAB’s) chairman, to investigate the media reports pertaining the allegation of money laundering of $4.9 billion, have become an embarrassment for the anti-graft watchdog. The highly publicized reports which circulated in media all day on Tuesday and NAB’s subsequent decision to start an inquiry on them has questioned the credibility of the institution.
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In response to the media frenzy on the issue, World Bank Pakistan released a statement which clarified that “the report does not include any mention of money laundering nor does it name any individuals.” Moreover, the World Bank further gave credibility to their released statement by referring to a report from the State Bank of Pakistan, which stated “State Bank of Pakistan (SBP) rejects estimates of US$4.9 billion remittances from Pakistan to India on September 21, 2016, refuting the $4.9 billion remittances number and providing an explanation of the methodology used in the World Bank report and the official remittances numbers”.
It raises serious questions regarding the credibility of the institution which has been making headlines in the country in the last year or so. It effectively means that NAB was not aware of the factual position of SBP rejecting the media reports of $4.9 billion remittances to India.
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In a press release issued on September 21, 2016, SBP stated that ‘The numbers given in Migration and Remittances Factbook 2016 are prepared by the Global Knowledge Partnership on Migration and Development (KNOMAD). The Factbook data on bilateral remittance flows are estimates (not the actual flows), which are based on a number of assumptions about the migrant stock, per worker income, etc.” Therefore, the methodology used by the authors to estimate the remittance numbers is flawed and has serious issues which are acknowledged by the authors themselves – Ratha, Dilip, and William Shaw, in their Working Paper South-South migration and remittances. No. 102. World Bank Publications, 2007. In their report, on page number 41, the authors stated that “Interpreting the meaning of migrant stocks also presents some difficulties. Pakistanis in India and Russians in Ukraine became migrants following the partition of the original country.” The SBP rejected these estimates because of apparent flaws as the migrants at the time of Indo-Pak partition in 1947 had become citizens of Pakistan.
For NAB to be unaware of these facts and releasing a press statement without any in-house investigations is a gross-negligence. It is a blow to the institution, which is trying to revive under a determined new chairman, Justice (retd) Javed Iqbal after a period of prolonged slumber under Qamar Zaman. Apparently, Javed Iqbal has unleashed a new life into this soul-less institution, but this mismanagement will give credence to the Nawaz’s narrative of the witch-hunt. Since, the disqualification from the premiership, Nawaz, and his allies have questioned the NAB’s activism against the house of Sharif and its aides.
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Therefore, it was of no surprised that seizing the opportunity, Maryam Nawaz tweeted, “I think $5 billion dollars were sent to India, tied to the wings of pigeons and NAB must have arrested all the Pigeons and they will be presented in accountability court as witnesses”. The ruling PML-N had even attempted to introduce amendments in NAB 1999 ordinance in a desperate move to kill the NAB activism.
In addition, the bilateral Balance of Payment data shows that outflow of workers’ remittances from Pakistan to India was US $116 thousand in the Financial Year 16 and the inflows from India to Pakistan was the US $329 thousand. Similarly, in FY15 and FY14, there was a negligible inflow and outflow of the workers’ remittances. The media of both the countries highlighted the WB’s report in 2015 and 2016 and created a stir. However, SBP has clarified the position using actual numbers.
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Nawaz is already under scrutiny in accountability court and is issuing statements against the whole judicial process. Under these circumstances, the government is facing an unprecedented situation and feels helpless to such remarkable turnaround in its fortunes. NAB should have acted more carefully given the extraordinary scrutiny of the ruling PML-N. The extraordinary haste has been a source of embarrassment for the institution as Nawaz camp will try to cash this apparently erroneous and surprisingly ill-prepared action by NAB. NAB is already facing the allegations of pre-poll rigging and keeping a soft-hand against PPP in Sindh.