Wait before you light up! The smuggled cigarettes you are buying and smoking may just be funding one of the biggest crime syndicates in Pakistan; undermining national security itself. You might shrug this off as an exaggeration; but it's not. Let me explain why.
According to most recent estimates, crime in Pakistan has soared high with no signs of retreat. The number and frequency of terrorist attacks and other such nefarious criminal activities have increased dramatically over the past few years; official statistics for which are further supported by anecdotal evidence and daily media coverage.
Most law enforcement officials agree that much of the growing organised crime in Pakistan is funded through smuggling. Their preferred items not arms or drugs, but something much more common; I'm talking about cigarettes. Hence, the linkage between smuggled smokes, organised crime, and national security.
In 2009, the ICIJ released an investigative article on how illicit trade in cigarettes is growing in Pakistan. They reported men such as Mr XYZ (actual name withheld), who "is considered an angel in the Khyber Agency region. The illiterate 70-year-old tribal leader finances construction of water pumps, streets and lighting, builds mosques and madrassahs, and supports the penniless and widowed. A one-time notorious drug kingpin who in the 1980s armed the Afghan Mujahidin at the CIA's behest, Mr XYZ churns out millions of counterfeit cigarettes to smuggle across central Asia, China, and Africa, and splits the proceeds with militants who control the swath of mountainous borderland, according to Pakistani intelligence and customs officials."
According to an independent global research agency Euromonitor International, in the last five years,based on minimum price of cigarettes, Government of Pakistan lost approximately Rs 100 billion in taxes through the illegal sale of cigarettes. The street value of these cigarettes was more than Rs: 150 billion. That's a lot of money in the hands of smugglers, organised criminal syndicates, and gang leaders.
Smuggling items that are easier to transport and sell (like cigarettes) poses a much better option than dealing with dangerous and illegal products like arms or drugs. Think of it this way: smuggling cigarettes brings in relatively regular flows of income keeping criminal syndicates well-funded, all the while staying below the radar. While it's difficult to identify definitive figures, according to experts in Pakistan, profits from the illicit cigarette trade account for as much as 20 percent of funding for these organised criminal groups and syndicates.
The question arises why is there hardly any debate on this issue? Money talks - especially in a liquid economy like Pakistan's. That is why wealthy people tend not to be questioned on their resources. Smugglers making millions of dollars from illegal cigarettes can emerge as powerful local warlords and gang leaders and even as influential figures in their communities. This is either done through coercion or by purchasing the loyalties of people; usually a combination of both.
That said, let me point out that this issue is not peculiar to Pakistan. Globally,cigarettes are the world's most widely smuggled legal substance. Experts estimate that contraband accounts for 12 percent of all cigarette sales globally; or more than 650 billion cigarette sticks annually. Even at the global level the critical twin impact of illicit trade in cigarettes on government revenues (a whopping US $40 billion) and on national security is well recognised.
According to a report published in 2008 by International Consortium of Investigative Journalists (ICIJ), "organised crime syndicates and terrorist groups rely on cigarette smuggling to help finance their activities". This is further supported by World Health Organisation's (WHO) Framework Convention on Tobacco Control, which, under an international treaty / Protocol to curb illicit trade in cigarettes, recognises that "illicit trade in tobacco products generates financial profits that are used to fund transnational criminal activity, which interferes with government objectives".
In Pakistan it is fairly well acknowledged that the link between these criminal elements and militant groups is not distant. All the latter need to do is sit back and receive bhatta- an illegal form of commission, on a regular basis from peddlers of illegal cigarettes in order to grant them safe passage.
In these prevalent conditions, Government of Pakistan has, over the last few years, already put in place a regulatory regime intended to curtail, and eventually eliminate the illicit trade of cigarettes. These regulations govern each step of cigarette industry's supply chain from cultivation to retailing, including even import and export. With such comprehensive laws in place, it is indeed unfortunate that Pakistan still hosts such a high illicit cigarette presence. The reason for this is obvious: the lack of effective enforcement have deemed these laws worthless, and this has made way for illicit cigarette trade to grow by more than 60% in the last 5 years.
Not that this cannot be solved. Other countries in South Asia, such as Bangladesh and Sri Lanka, have shown that illicit trade can be virtually wiped out through effective on-ground enforcement. In Bangladesh, over the last 5 years the share of illegal cigarettes in the market has fallen from 27% to 3%. In Sri Lanka also illicit cigarette trade has been kept at an equally low level. Thus proving that this is not a unique or unsolvable problem.
What we require now in Pakistan, is the will of the government to enforce the laws that have been enacted. For a safer and better society things need to change. Low priority of this issue not only encourages but actually facilitates the illegal trade. The government must realise and accept that cigarette smuggling poses a real and serious threat to economic and national security.
The sale of such cigarettes is by no means a victimless crime and with the sale of every stick someone somewhere is armed and funded to carry out acts of violence. Moreover, the state itself suffers greatly due to the tax loss. Since cigarette smuggling is everyone's issue, therefore along with the government the public must play its role in discouraging the sale of smuggled cigarettes and take cognisance of the problems that it poses. So next time you go buy a smuggled pack of cigarettes, take a long pause and think about whose pocket you may be filling.
(The author is the CEO of Securiguards Pakistan (Pvt) Limited. The views expressed in this article are not necessarily those of the newspaper.)
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