The Rs. 28 trillion loot in Swiss Bank's fallacy

If something is too good to be true, it probably isn’t. I am not referring to the fantastical $45 Billion, Abu Dhabi group investment, plus tallest building in the world in Karachi news from a few days ago, will come to that some other time.

Really? Perhaps Google to fact check?

Today, once again, reading through the Political Economy section of the TNS, I came across another sermon on corrupt politicians and ill-gotten wealth, ending predictably with references to Jinnah and Iqbal.

Alauddin Masood couples some facts from some recent reports with the ubiquitous and sensational statement that:

The amount is so huge that it prompted a Swiss banker, recently retired, to say: “Pakistan is a poor country but Pakistanis are not” because they have “28 trillion (28,000,000,000,000) of Pakistan rupees deposited in Swiss Banks.”

http://jang.com.pk/thenews/Feb2013-weekly/nos-17-02-2013/pol1.htm#2

Now this so called “Swiss Banker” has alteast retired now. Over the last couple of years we have been inundated with email forwards, and Facebook shares about this mysterious Swiss Banker and the Rs. 28 trillion figure.

In September 2011, it wasn’t a retired Swiss Banker, but a director Swiss Bank who stated that:

Director Swiss Bank said ‘Pakistanis are poor but Pakistan isn’t a poor country.’ He added that 97 billion dollars of Pakistan is deposited in respective bank and if this money would be utilized for the welfare of Pakistan and its people then Pakistan can make tax less budget for 30 years, can create 60 million jobs, can carpet four lanes road from any village to Islamabad, endless power supply to five hundred social projects, every citizen can get 20000 rupees salary for the next 60 years and there is no need to see IMF and any World Bank for loans.

http://www.pakistantoday.com.pk/2011/09/18/news/national/pakistan-has-97-billion-dollars-in-swiss-banks-director-swiss-bank/

What the?

A few problems are obvious with these assertions.

First, there is no such thing as a “Director Swiss Bank”.

Second, there is no such thing as a Swiss Bank.

Third, why would any Swiss financial official compromise on Switzerland’s reputation for privacy by making such statements?

Fourth, according the Swiss law, financial privacy in Switzerland is akin to attorney client privilege. Why would some Director/Retired Swiss Banker break Swiss laws to make such statements?

Fifth, even if this Swiss Banker is genuine, how would he possibly know the names, source and nationality of all deposit holders in every Swiss Bank?

Sixth, why would he make such normative statement, about whether Pakistan is a poor country or not, and how many years of salary each Pakistani would receive and that to calculated in Rupees?

Alauddin Masood’s article is titled:

If our rulers bring back the money stashed in accounts abroad and invest it in Pakistan, we can have tax free budgets for almost 30 years

What the......

Now many things are wrong with such statements.

First of all repatriating money back into Pakistan doesn’t equate into investment. Second, the assumption that all monies held abroad is ill-gotten, is not necessarily true. Third, what is the relationship between investing the money in Pakistan and thirty years of tax free budgets?

It is one thing to have such commentary shared in social media and online forums, but it’s quite different when it is used as a tool for shaping or justifying economic policy.

But these statements are such an incredible farce that they are also used in India, where articles were published with the title, Indians are poor but not India: Swiss Bank:

"Indians are poor, but India is not a poor country," says one of the Swiss Bank directors. He says that "280 lakh crore (280,00,000,000,0000) of Indian rupees is deposited in Swiss banks which can be used for “taxless” budget for 30 years. It can give 60 crore jobs to Indians. The other uses of the money: From any village to Delhi 4-lane roads. Forever free supply to more than 500 social projects. Every citizen can get monthly 2000 for 60 years. No need of world bank and IMF loan.

http://www.indiatribune.com/index.php?option=com_content&view=article&id=5058:indians-are-poor-but-not-india-swiss-bank&catid=119:business&Itemid=493

Shocking surprise! Looks like this Swiss Bank director likes to say exactly the same thing to every developing country!

I find such rhetoric frustrating and exhausting.

Economic policy making is difficult enough, but once public opinion is shaped by such rhetoric it is very difficult to design and implement policy with politicians and media personalities harping on with such ludicrous accusations.

Now, you may retort that hold on, while these statements might not be true, the fact remains that politicians are corrupt and they have probably stashed away large sums of money in Switzerland. That is true, and no one is denying that. However, things are bad enough that we don’t and shouldn’t need to rely on made up stuff.

Why do we need to share pictures of atrocities in other countries and pass them off as pictures of victims of terrorism in Pakistan or other Islamic states? Were the victims of atrocities that we are passionate about not photogenic enough?

Are our corruption estimates not sexy enough that we need to come up with Rs. 28 trillion?

So spare the rhetoric and stick to facts. At least one would expect that from writers offering sermons on corruption and budget policy in national publications.