How are political parties funded in Pakistan? | Arab News

This article was published in Arab News on August 31, 2022 and is available at the following link

The funding of political parties in Pakistan has been in the news since the ‘prohibited funding case’ against Imran Khan’s Pakistan Tehreek-e-Insaaf (PTI) was filed some eight years ago. The subject however, came into sharper focus when the Election Commission of Pakistan (ECP) announced its judgment in the case on August 2 after exhaustive scrutiny of PTI accounts, and found PTI responsible for various irregularities and lapses such as accepting funds from sources prohibited by law and not disclosing all bank accounts of the party etc. Although PTI has challenged the judgment in court, the long probe and its findings have exposed some serious weaknesses both in fund-raising by political parties in Pakistan and the ECP’s system to scrutinize financial statements of political parties. These weaknesses are not specific to PTI and are applicable to almost all other major political parties as well. 

Pakistani political parties in general, with a few exceptions like PTI, have a very narrow base of contributors to party fund. A review of the audited statements of accounts submitted by various political parties and made public by the ECP during the past 13 years indicates that one of the largest sources of income of most of the parties is the fee charged from applicants of party tickets for National or Provincial Assembly elections at the time of general or by-elections. For example, the funds collected in the name of the party ticket application fee constituted about 89% of the total income of PPP during the election year 2017-18. Over a period of 8 years, income from this source constituted about 43% of the total income. PML-N collected one-third of its income from party tickets fee over a period of 13 years. PTI collected a relatively lower percentage (24%) of its income from party tickets fee because it collected a much greater percentage of its income from other sources such as donations from party members and supporters based both inside the country and abroad. 

Another typical source of income of our political parties is receiving a certain percentage of their legislators’ salaries as donations. 

PPP, being the richest party in terms of assets, relies mainly on the interest earned on its bank deposits. In some years, this income constituted up to 98% of the total income of the party. 

Irrespective of the alleged irregularities, PTI is the only political party among the three largest political parties of Pakistan that has tried to establish a proper broad-based fundraising system. According to its audited accounts statements, about 67% of its income is generated through donations. Although occasionally large donations are also received from outside Pakistan as revealed in the ECP judgment, the bulk of the donors contribute modest sums. 

In Pakistan, there is no limit to election spending by political parties which is likely to compromise the principle of protecting politics from the influence of big money. 

Ahmed Bilal Mehboob

Although the constitution and the law governing political parties specifically require that the parties disclose their sources of income, the law does not require these parties to disclose the names of their donors or at least large donors except in the case of the election campaign fund, where donors of Rs. 100,000 or more need to be identified. The disclosure in general terms such as ‘Membership Fee’ or ‘donation by supporters’ does not fulfil the spirit of the law. ECP demanded details of the donors from PTI only after a complaint was filed in 2014. Apparently, the same exercise must be afoot about PML-N and PPP as well because PTI has filed a complaint about them. This is a major gap in the law and rules that ECP has not been receiving details of the sources of funding. ECP needs to correct this apparent lapse for the future. 

The influence of money on political parties and individual parliamentary candidates is considered a very serious issue in all democracies, which enact laws to ensure political parties or individual candidates do not receive such funds which may compromise their independence in framing laws. 

In addition, generally there are laws which set a limit to spending by political parties and individual candidates in elections.   In Pakistan, there is no limit to election spending by political parties which is likely to compromise the principle of protecting politics from the influence of big money. The legal spending limit on individual candidates is also not fully enforceable because a loophole in the law practically allows persons other than the candidate to spend beyond the spending limit on behalf of but ‘without the consent’ of the candidate. 

While political parties need to broaden their funding base and ensure that political finance laws are strictly followed, the ECP needs to streamline its rules and systems so that at least a random sample of political parties statements of accounts are scrutinized every year instead of waiting  for someone to file a complaint and then spring to action. 

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