Pakistan Plunges Into Political Turmoil After Prime Minister Ousted For Corruption

Tyler Durden's picture

Pakistan plunged into political turmoil when its Prime Minister Nawaz Sharif resigned shortly after the Supreme Court ousted him from office on Friday following an investigation into allegations of corruption centering on undeclared offshore assets.  As Reuters notes, The court disqualified Sharif for not being “honest”, a requirement for lawmakers under Pakistan’s constitution, something the US sorely needs to amend as well. The court also ordered a corruption trial against Mr. Sharif, whose family is accused of amassing wealth through corrupt means and purchasing expensive overseas properties with that money.

The case against Mr. Sharif centers on four upscale apartments in London, which the opposition party alleges were bought with money made from corruption. Details of the property, held in the name of Mr. Sharif’s children, were disclosed in the huge leak of documents from the Panamanian law firm Mosack Fonseca last year, known as the "Panama Papers", detailing the undisclosed offshore holdings of people around the world. The Prime Minister said the apartments belonged to his children, not him, and were acquired as part of a settlement of an old family business deal with a Qatari prince.

Nawaz becomes the second casualty of the "Panama Papers" after the Iceland prime minister resigned in April of 2016 under similar circumstances.

A statement from Sharif’s Pakistan Muslim League-N party said he had stepped down as prime minister immediately following the verdict but added that “constitutional and legal requirements for a fair trial were trampled over.” His party is now expected to name a new prime minister. As the WSJ adds, "aides to Mr. Sharif, who has denied the accusations and said he has done nothing improper, warned that stability and democracy in the nuclear-armed nation are threatened by political turmoil. Pakistan has been ruled for nearly half its existence by the military, while civilian governments have usually not completed their terms. Elections are due next year."

“This is a time when creating any kind of destabilization in Pakistan would be inviting trouble for ourselves. History will judge us over how we handled this phase,” said Ahsan Iqbal, minister for planning, on the eve of the court decision.

The ouster of Sharif, 67, who has now served as premier on three separate occasions, raises questions about Pakistan's fragile democracy. An interesting fact is that no prime minister has completed a full term in power since independence from British colonial rule in 1947. 

According to Reuters, the court verdict marks a major political victory for opposition leader Imran Khan, a former cricket star who last year threatened mass street protests unless Sharif's wealth was investigated. Khan had pounced on the leaking of the Panama Papers, which revealed Sharif's family had bought posh London apartments through offshore companies.

"Today the people of Pakistan got real justice, a new chapter has begun," Jehangir Khan Tareen, a member of Khan's opposition PTI party, said outside the court.

Ironically, Khan himself is also under Supreme Court investigation on allegations he failed to declare sources of income, a charge he denies.

Pakistan is crucial to US strategic interests in the region, and to ending the war in neighboring Afghanistan. The Trump administration’s review of Afghanistan policy is expected to see a role for Pakistan in bringing peace there, but Islamabad’s attention looks set to be sapped instead by a prolonged political crisis, the WSJ adds. The government of Mr. Sharif’s party, which has a majority in Parliament, can continue despite the court verdict.

* * *

The Supreme Court verdict was under close watch: hundreds of police and paramilitary troops were deployed to guard the Supreme Court complex Friday before the highly anticipated verdict in the case, which has been the top political issue in Pakistan since last year.

Pakistan’s constitution says its lawmakers have to be “honest” and “trustworthy.” That test was a central issue before the Supreme Court.

 

According to the opposition party led by Imran Khan, which brought the case against Mr. Sharif, holding politicians accountable, including for their personal wealth, would strengthen democracy in Pakistan and end its slimy traditional politics. Earlier this month, an investigation ordered by the court found that Mr. Sharif and his children weren’t “able to justify assets and the means of income.” The probe also alleged that the family had provided fraudulent documents to the court.

 

Last week, Mr. Sharif had denounced the findings of that investigation as slander. “This isn’t accountability, this is exploitation. I can guarantee no one in Pakistan is going to accept such accountability,” Mr. Sharif said in a speech.

Sharif claims that under his government Pakistan had stabilized, with a pickup in economic growth, the building of infrastructure and a reduction in terrorism. However, Pakistan hasn’t been able to break out of its perennial cycle of tension between civilian administrations and the military, experts quoted by the WSJ. Over the past decade, the Supreme Court has at times taken an activist role, a stance revived by the current case against the prime minister.

* * *

Finally, here are some analyst reactions to Pakistan's political overhaul:

Aberdeen Asset Managment (Edwin Gutierrez, London-based head of EM sovereign debt)

  • “Today’s development breeds political uncertainty and only adds to the reasons we haven’t liked the Pakistan story”
  • “The deteriorating BOP is one of our bigger concerns. There’s already been fiscal slippage because of the lack of IMF extension”
  • Gutierrez doesn’t own any bonds in Pakistan

Asia Frontier Capital (Ruchir Desai, senior investment analyst in Hong Kong)

  • This is a near term negative
  • Stock market sentiment will remain subdued in the short term and the currency could come under pressure
  • The longer term impact would depend on how strongly PML-N goes into next elections in 2018 as well as the outcome of elections
  • This is more or less in the price - the stock market is down ~15% from peak and is trading at a discount to most regional markets

Ashmore Group (Jan Dehn, London-based head of research)

  • “Well-informed investors will look upon this as a buying opportunity”
  • “Impact on the bond and currency markets will be lower than for stocks”

Exotix Capital (Hasnain Malik, global head of equities research in Dubai)

  • “Despite all of the negative reactions to this case, we see this as, on balance, a positive”
  • “We do not view the Prime Minister and his family as central to the improvements in security nor to the implementation of key initiatives such as the China-Pakistan Economic Corridor”
  • “Likelihood of a hung Parliament and coalition government after next year’s election now increases”

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silverer's picture

Another normal day in Pakistan.

Arnold's picture

Put out a reset button.
That was easy.

Soccer Star, Bus Driver, Hospitality Magnate,
Old fashion despot is out of favor.

Looney's picture

 

I wonder if the NSA provided the evidence in this case.

When will these people (in Brazil, South Korea, FIFA officials, et al) will learn that you cannot discuss your rackets on the phone/email/text?  ;-)

Looney

Theosebes Goodfellow's picture

A Paki gov official corrupt?!? Oh, say it ain't so!
Geeesh! A guy has a few rentals in London and POW!, now he's corrupt? What's a WOG to do?

SubjectivObject's picture

eesh, hyperbole much?  [standard yellow journalism fare]

it's not in turmoil

it's in flux

GUS100CORRINA's picture

Pakistan Plunges Into Political Turmoil After Prime Minister Ousted For Corruption

My response: MORE GOOD NEWS???? Fiscal year 2017 is shaping up to be full of fireworks and chaos. Doesn't Pakistan have NUCLEAR WEAPONS? All we need is another "NUCLEAR" player on the stage who is in political turmoil.

Now all we need is a FINANCIAL MARKET CRASH, A FEW POWERFUL GLOBAL EARTHQUAKES and the CHRISTIAN RAPTURE EVENT to set it all in motion to the end.

Arnold's picture

I blame the Swiss.
Under the thumb of not much pressure, once secure accounts are gone.

The Mountain Krauts should have invented block chains much earlier.

GunnerySgtHartman's picture

True, but at least the Pakistanis ran this corrupt guy out of office.

In the US, corrupt politicians get re-elected to Congress.

Got The Wrong No's picture

And the most corrupt run for President........Hillary

booboo's picture

One thing for sure, the alCIAda must stay very busy moving pallets of cash.

NMA's picture

Most of central london has been bought, one way or another by money from corruption..... this dumb bastard got caught..... 

Fiscal Smegma's picture

"The court disqualified Sharif for not being “honest”, a requirement for lawmakers under Pakistan’s constitution"

WTF Kind of Bull Shit LAW IS THAT?

we don't have that honesty crap here in our constitution.


Falconsixone's picture

They got a Prime Minister and courts?

I thought it was all pray stations and dusty old rifles with beads hanging on them.

The Iconoclast's picture

"The court disqualified Sharif for not being “honest”, a requirement for lawmakers under Pakistan’s constitution, something the US sorely needs to amend as well."

Sure, exactly what we need, some judge in Hawaii kicking elected officials out of office on his intuition of their honesty.  

observiate's picture

ummmm why was the prime minister of Pakistan a white dude? am i seeing things? are there fair skinned Pakistanis?  I know we love to troll here in the comments, but please note that this is a sincere question and I apologize for my geopolitical cultural ethnic ignorance.  Thank you in advance for educating me!

Everybodys All American's picture

Any connection to CIA/ISI and Awan brothers must be eliminated asap.

roadhazard's picture

That could be Trump one day.

Dilluminati's picture

I read this and think: "plunged" when "swirling" is more appropriate?

Pakistan is by almost any measure the most corrupt (certainly by business standards) nation's on the planet.

It isn't like a lightswitch was flipped and suddenly there is turmoil, in Pakistan turmoil is a fact of life.

Neptune's picture

All progress and development in Pakistan has only ever taken place when under military rule.

The civilians are desperately corrupt and keep on getting re-elected due to a serf-mentality amongst the voters. True story: a candidate for re-election of member of parliament in southern Punjab region, eminently qualified due to his focus on ending corruption and public works, lost the elections and when asked in a TV interview one of the voters commented that having spent a term as a member of parliament, he is still riding around in an old car and if he cannot help himself how can he help us.

Benazir Bhutto had a below average IQ and her husband  -Asif Zardari, was known as Mr. 10% during her first tenure of premiership but got upgraded to Mr. 50% during the second term. When Mr. Zardari became president himself it was Mr. 100%.

Like Beazir Bhutto, Nawaz Sharif is also man of mediocre intelligence, while PML-N, is undoubtely corrupt, however, their way of corruption is to make money from public works and infrastructure projects.  PPP, the rival political party, just goes for 100% corruption without even bothering with a pretense of public works or infrastructure projects.

The story with Nawaz Sharif not being different with his brother running the largest province and Nawaz Sharif trying to groom her rather pedestrian but arrogant daughter, during this grooming process a few mis-steps by her actually accelerated the demise of her father's government. Similarly PPP was inherited by Benazir from her father (Zulfiqar Bhutto) and is now run by her husband after her assisination -for which most fingers point to her husband-and with her gay-curious son being groomed for future leadership.

South Asia and South East Asia seems to be all about politics of widows and orphans: Philippines (President Gloria Macapagal-Arroyo's father was President Diosdado Macapagal); Indonesia (President Megawati Sukarnoputri's father was President Sukarno); Sri Lanka (Prime Minister Sirima Bandaranaike's husband was Prome Minister Solomon Bandaranaike; India (Prime Minister Jawaharlal Nehru's daughter was Prime Minister Indira Gandhi and her son Rajiv Gandhi and after his assasignation his widow Sonia Gandhi became the head of Indian National Congress and is now grooming her son (Rahul Gandhi) and daughter (Priyanka Gandhi) for the role; Bangladesh (Prime Minister Khaleda Zia's husband was Prime Minister Ziaur Rahman); Pakistan (Prime Minister Zulfiqar Bhutto's daughter was Prime Minister Benazir Bhutto and her husband is President Asif Zardari).

* previous office holders have been identified with the title of the office.

** second tier secretaries, ministers chief ministers, governors etc. are too numerous to count.  Politics is indeed a family business.

 

 

Swamp Yankee's picture

Turmoil in a county with nukes... what coudl *POSSIBLY* go wrong!?

Vardaman's picture

Sharif, he don't like it.  Fuck the casbah, fuck the casbah...

just the tip's picture

no comment from pompeo?  relocating some of the american foreign legion to paki?  did this guy barrell bomb his citicizens?

goldenbuddha454's picture

https://www.usatoday.com/story/news/politics/2013/10/19/us-quietly-relea...

 

Remember the last time they shook us down?  Yeah, one month after the last govt. shutdown 2013.  History always repeats itself.

TabakLover's picture

India double checking their nuke launch codes - Famtastic.

Herdee's picture

Money that obviously came through CIA drug network channels. Connections of some sort obviously pissed off the Americans with trading being done between Pakistan, North Korea, Iran and Turkey in gold. How much do you want to bet that the Democrat's IT specialists that had access to Debbie's computers had connections to this crooked asshole?

frontierland's picture

What a Shock!

If you bring Pakistani's here to the Magical Soil of the US to increae "Diversity", these filthy, untrustworthy Paki Kebabs will automatically embrace muh constitution and become patriotic Americans! 

God Bless the USA!

JailBanksters's picture

What's the bet the USA had something to do with it

 

pocomotion's picture

Congratulations on accepting the new position in our government.  Just to note, if you start to lean to the right, or support another position without checking with us, you will be dealt with in a most unpleasing way...  Take the money and run, oLord...

Pitchman's picture

The Washington Post — whose motto is “Democracy dies in darkness” — kept its readers in the dark for months about the growing Awan Brothers scandal. The Post published its first article on the House IT scandal Wednesday afternoon, noting Awan’s arrest for bank fraud.

For comparison, Luke Rosiak of the Daily Caller has written more than 20 news stories on the scandal.

The New York Times, CNN, MSNBC, WOPO have all lost credibility. They are the front line of Deep State Propaganda; Fake News!

"Russia, Russia, Russia. No! Awan, Awan, Awan: #AwanBrothers"

https://notionalvalue.blogspot.com/2017/07/russia-russia-russia-no-awan-...

 

Gen. Ripper's picture

All hadjis are corrupt?

abq87120's picture

Rag head politicians are like Mexican politicians.  They are so crooked you can't buy them...  You can only rent them.

 

Our politicians are relatively honest...  When you buy them, they stay bought.

aldol11's picture

i am told that in those countries kickbacks are the greater part of public employees income 

Lucky Leprachaun's picture

" a requirement under Pakistan’s constitution is that politicians must be honest."

Surely that should be "a requirement under Pakistan’s constitution is that politicians not be honest." ?

SmittyinLA's picture

Wait till the Abengoa creditors and partners get exposed

TheFederalistPapers's picture

Fucking Paki's are worse then the Indians

metanoic's picture

If this guy wasn't an ISI stooge seems like a hell of a good time to get an ISI stooge in there. Got to appreciate the timing of 'bad dealings' getting revealed...

cheech_wizard's picture

They must immediately launch a nuclear strike against India...

Let's get this global depopulation party started.

Drop-Hammer's picture

But, but, but, the Pakistanis are helping us in the 'War on Terror'.