FeaturedNationalVOLUME 19 ISSUE # 27

Pakistanis offshore wealth

Recent revelations about Pakistani investments in Dubai’s real estate market have surfaced during a period of severe economic hardship for Pakistan. As the country grapples with historic inflation, unemployment, and IMF-imposed fiscal policies, millions of citizens are being pushed below the poverty line. These disclosures highlight a troubling disparity: while the majority of Pakistanis suffer, a select few are making substantial investments abroad. This stark contrast has intensified calls for a comprehensive investigation into these offshore investments.

The project, titled ‘Dubai Unlocked,’ is based on data offering a detailed overview of hundreds of thousands of properties in Dubai, along with information about their ownership or usage, primarily from 2020 and 2022. Properties purchased in the name of companies and those located in commercial areas are not included in this analysis.

In 2001, Pakistan’s offshore financial wealth in Switzerland amounted to $11 billion. By 2022, this figure had decreased to $1 billion. However, increased transparency in the banking system has encouraged a shift towards real estate investments, with Dubai being the top choice. Data from the Atlas of the Offshore World indicates that Pakistanis have invested over $10 billion in Dubai, while London, the second choice, has $740 million in Pakistani investments. Singapore ranks third with $120 million. Notable areas in Dubai where Pakistanis own properties include Dubai Marina, Emirates Hills, Business Bay, Palm Jumeirah, and Al Barsha.

Prominent individuals such as President Asif Ali Zardari’s children, Interior Minister Mohsin Naqvi’s wife, Sindh’s senior minister Sharjeel Inam Memon, Hussain Nawaz Sharif, Senator Faisal Vawda, Sher Afzal Marwat, Farah Gogi, and at least six members of provincial assemblies from Sindh and Balochistan are listed as property owners in Dubai. The list also includes the late Gen Pervez Musharraf, former prime minister Shaukat Aziz, retired generals, a police chief, an ambassador, and a scientist. These properties are owned either directly or through spouses and children.

The depreciation of the rupee, strict capital controls, and the overall economic decline in Pakistan have driven many individuals to invest abroad, with Dubai being a prime destination for such investments. Over 17,000 Pakistani citizens were listed as property owners in the 2022 leak, with academics estimating the actual number to be around 22,000. The value of these properties was estimated to be over $10 billion at the start of 2022, and with a more than 25 percent increase in property prices over the last two years, the current value could exceed $12.5 billion.

Many individuals named in the “Dubai leaks” have clarified that their investments were legal and duly declared. However, concerns arise if investments are undeclared, the money trail is questionable, or if the investments do not align with the investors’ stated income levels.

The fact that Pakistanis rank second in both the number and value of properties owned by foreign nationals in Dubai is significant. Given that many of these purchases were made by retired bureaucrats, officers, and others whose incomes do not justify such investments, there is an expectation that the Federal Board of Revenue (FBR) will be thoroughly investigating these matters in the near future.

These revelations come at a time when Pakistan and its citizens are enduring an economic crisis. Historic inflation and unemployment, coupled with the government’s fiscal collapse and reliance on IMF-mandated contractionary and regressive policies, have pushed millions of Pakistanis below the poverty line in recent years.

Amidst this turmoil, from 2020 to 2022, many Pakistanis were investing millions in Dubai’s lucrative real estate market. This stark contrast, between the economic suffering of ordinary people and the wealth of those investing abroad, has fueled demands for a serious official investigation into the discrepancies between reported incomes and investments revealed in the leaks.

The FBR has a substantial amount of data to examine, and there are widespread suspicions that much of the Pakistani money in Dubai real estate is illicit, possibly stolen from the country. Previous attempts by two administrations to repatriate this black money through amnesty schemes were largely unsuccessful. Many criticized these initiatives as unfair, allowing “looters and plunderers” to legitimize their corruption. Currently, there is a growing public demand for strict, transparent scrutiny and punishment for those involved.

The government must address this issue seriously, despite the challenges of dealing with powerful individuals close to the centers of power. Given its already low credibility and legitimacy following a disputed election, the government needs to understand that continuing to allow a few to exploit the system at the expense of the many will only further harm its standing and the well-being of the people.

The government faces a crucial test in addressing the Dubai real estate scandal. The public’s demand for transparency and accountability is stronger than ever, especially given the current economic crisis. Failure to act decisively against those exploiting the system could further erode the government’s credibility and exacerbate public discontent. To regain trust and ensure justice, the authorities must thoroughly investigate these investments and hold those responsible accountable, prioritizing the interests of the many over the excesses of the few.