Dubai property market

EDITORIAL: Technically, at least, making smart investments in high-yielding asset classes – Dubai property market being an apt example – is the very essence of free market capitalism. Indeed, most people “exposed” in the so-called Dubai leaks have clarified that they made perfectly legal investments, duly declared, and that will be the end of the matter; for them.

Red flags are naturally raised, however, if said investments are not declared, the money trail is suspect, and/or are out of sync with the income level of the investor(s).

The fact that Pakistanis were number-two both in terms of the total number and value of property owned by foreign nationals in the emirate is very telling. And since a lot of these purchases have been made by retired bureaucrats, military officers and some others, whose stated incomes could never provide them the financial leverage needed to fish in Dubai property, most common Pakistanis are expecting the FBR (Federal Board of Revenue) to be very busy in the coming days and weeks.

Let’s not forget that these revelations come at a time when the country and most of its citizens are suffering an economic nightmare. Historic inflation and unemployment, when the government’s fiscal collapse has left it hostage to IMF-mandated contractionary and regressive fiscal and monetary policies, have already sent millions of Pakistanis tumbling below the poverty line in the last few years.

Yet that was just when (2020-22) so many of their countrymen were buying, flipping, and renting property worth millions of dollars in one of the world’s most lucrative financial markets. And, to rub salt in ordinary people’s wounds, there are bewildering discrepancies between incomes and investments of too many people revealed in the leaks for there not to be a very serious official investigation.

There is, after all, a treasure trove of data for the FBR to comb through. A lot of people suspect, rightly so, that some if not much of the Pakistani money parked in Dubai real estate is not quite kosher, and was stolen from this country.

Previously, two administrations have tried to lure some of this black money back through amnesty schemes, though neither scheme worked out too well. And while a lot of people simply disagreed with both governments’ initiative at that time, dubbing the practice of letting “looters and plunderers” whitewash their corruption very unfair, this time there’s already a growing public call for strict and transparent scrutiny and punishment for the guilty.

There’s no doubt that the government will have to take this matter very seriously. But it will face serious problems when time comes to deal with some of the usual holy cows that are close to centres of power in this Islamic republic.

That’s when tall claims of “this time will be different” will be put to a stiff test. Surely, the government is aware of the little credibility and legitimacy it enjoys in the eyes of most people since the disputed election. Therefore, it must also understand that it will do itself, and the people, no favours by continuing to let the few get away with their excesses at the cost of the interests of the many.

Copyright Business Recorder, 2024