The caretaker governments are now operating freely at both federal and provincial level. Their priority, of course, is to ensure timely, free and fair elections but that does not mean that they remain aloof from the governance problems faced by the country.

In fact they should have set the standards for the democratic governments to follow. The way they are governing the country is not different from their predecessors. They may be neutral, but they certainly are not competent. They may be honest but they lack the will to stop malpractices. The country is bleeding as profusely as ever that has accelerated instead of declining in the past two weeks. The load shedding has reached its peak in the history of the country in the month of April. One wonders what would happen in the next three summer months. Will the interim government hand over to the next elected government a more inefficient power sector? Is there no room to reform it in two months time? Should the things be allowed to drift towards a destructive path?

The Supreme Court and not the Sindh government is trying to control the law and order and eliminate "no go" areas in Karachi. Does the neutral caretaker government lack the political will to take steps that everyone knows would restore the confidence of the masses? Does the extortion mafia still control the strings of the Sindh caretaker government? It would be tragic if the Supreme Court is forced to issue an order against the caretaker government that is similar to one that it announced against the Raisani government in Balochistan. The court acting on the orders of the superior court it should be taken to task by the caretakers in Sindh.

The federal caretaker government is not acting neutrally as it changed the most competent Chief Secretary of the Punjab and replaced him with another bureaucrat. However, it withdrew orders of the former Punjab Chief Secretary about his posting on the same post in Sindh. While the bureaucracy in all the provinces is being reshuffled on the request of the Election Commission there is no widespread change in the bureaucratic set up of Sindh.

Meanwhile the scrutiny of papers of the candidates is proving a hard nut for them. However the returning officers who are well versed with basic principles of Islam limit their question to the candidates on Islam only. The main question is that whether the candidate is honest and tax compliant. Having no experience in financial affairs the returning officers are adopting a lax attitude on loan defaults, loans reschedules, or has the candidate defaulted for a year or two before applying for rescheduling of a loan a few months before the election. The honesty and the character of a candidate is most important in containing the corruption in the government to come. Bankers and legal experts have pointed out flaws in the Central Bank's regulatory system that facilitate defaulters in dodging the system and delay in declaring them defaulters and facilitates them to contest the May 11 elections.

A senior banker said some defaulters in view of the forthcoming election have entered into re-scheduling arrangement with banks/financial institutions entailing write-offs / waivers that would be passed after the settlement period. (For example, a defaulter entered into a settlement with a bank for payment of the defaulted amount within next two years on installment basis. Resultantly the bank will convert the status from "Default" to "Re-scheduled" that means he/she is regular now. And ultimate financial relief will be passed on him/her after two years i.e. after the upcoming election).

He said some of the banks / financial institutes may not report to the SBP few write-offs/waivers for variety of reasons e.g. intentionally or unintentionally a delay in passing write-offs / waivers entry in the books of account where after the same will be reported to the SBP / eCIB. Moreover, he added, corporate eCIB Formats don't show individual particulars of directors that may mislead the Election Commission officials. He said another flaw in the system is that the write-offs / waivers availed during the year 2000 will not reflect in their eCIB. The eCIB record is only available for the last 10 years.

A corporate lawyer said candidates may not disclose their present or past stakes in 'Business Entities' that availed write-offs / waivers to the Election Commission officials. He said some of the defaulters have very smartly disengaged themselves from the Board of Directors of the defaulted companies prior to elections.

He said a number of the defaulters have taken refuge in the loopholes of the legal system to frustrate the recovery initiative of financial institutions. For example, 'Stay' granted to the defaulters on petty issues, long adjournments are given in the courts, some appeals are not being heard even after 2 or 3 years, as courts are over-burdened. Moreover he added judges well-versed in banking matters are limited in number, with frequent transfer of judges of banking courts during process of the recovery suits. He said beneficiaries of these flaws in banking laws are on both sides of the political divide.

Another legal expert said that legally the Sharif brothers are not defaulters. He said they owed the banks over Rs. 4 billion in 1999. He said they handed over their property allegedly of equivalent assets to the court and the banks who owed the money agreed to the arrangement. He said the courts were to auction that property and pay off the banks. "When the auction process was in progress one of the cousins of Sharifs filed an objection to the arrangement" he said, adding that the auction process got delayed. He said when decision on that objection was about to be announced some other relative of their family filed another objection.

He said that the litigations in this regard have dragged on till now. He said now the property handed over to the courts in 1999 is worth over Rs. 14 billion. He said if the property is auctioned today the banks would be entitled to the defaulted amount and maximum cost of the fund (this is the average profit the banks pay to their depositors which ranges from 3-4.5 per cent) "This would enable them to pocket an addition of Rs. 1-1.5 billion while the balance would have to be paid back to the original owners" he said adding that the delay in this instance might not have been intentional, but there is a flaw in the law that facilitates defaulters to delay the disposal of mortgaged properties. Meanwhile, there are cases of write offs pertaining to 2000 to 2008 of some well known political families. These names are documented as the commercial banks under Central Bank regulations are bound to give details about any loan write off in their annual reports. These details are given in annexure C of the annual reports of all banks in each of their annual reports. The cases of these write offs are pending in the Supreme Court of Pakistan. But the names include some renowned politicians including a former prime minister, former deputy prime minister, former speaker of the national assembly and many others.

http://www.weeklycuttingedge.com/