Economic revival, CPEC and Agenda 2047 – II

ISLAMABAD:

The ruling elite will have to realise that without overhauling its governance system and business environment, it can neither revive the economy nor achieve the goals of Agenda 2047. Thus, whether they like it or not, things will have to undergo drastic changes.

After analysing the ground realities and setting targets, we have identified a few areas for immediate reforms and overhaul. These have been divided into two categories – governance and business. Let’s start with governance and institutional reforms. First, Pakistan needs to overhaul its bureaucracy and bureaucratic institutions. The system is old, lacking characteristics of modern governance.

In today’s age of specialisation and innovation, there is a need to change the system. The process should start from the induction policy and procedures. Merit system needs to be refined rather than redefined.

There should be no general induction system like the one prevailing today. Ministries should be asked to prepare a ministry-specific induction policy according to their work and needs.

For instance, bureaucrats for the Ministry of Finance should be recruited from the fields of economy, finance, development and political economy. A political economist should head the ministry. Similarly, the Ministry of Health should look for candidates from the medical and related fields. The same policy should be followed by every ministry.

Moreover, a complete ban should be in place on inter-ministerial transfers and postings. Bureaucrats should remain posted within a ministry, a system that will help them to polish their skills. Second, there should be a comprehensive monitoring, evaluation and promotion system. Performance review should also take into account deferred decisions and give them negative points. Promotion of officers must be tagged with the delivery of results and a specific number of successfully executed projects.

Third, regrettably, another problem has emerged over the past few years. Bureaucrats have started to align themselves with political parties by becoming unofficial members of their preferred parties.

It has given birth to new groups among bureaucrats according to their loyalties. It can be termed a dangerous trend that must be stopped. Bureaucrats must be reminded that they are servants of the state and people, not of political parties.

Fourth, bureaucrats must be protected from the unlawful demands and actions of rulers. There should be mechanisms in place to ensure the completion of their tenure and safeguard the future of upright bureaucrats. Fifth, there is a need for overhaul of the bureaucracy training system.

Age-old system

Pakistan has an outdated planning and execution system characterised by many inherent flaws, including exclusivity, short-sightedness, unsustainability and the lack of scientific decision-making.

This system is highly exclusive in nature where a few influential people or groups develop policies. Voices of common citizens, even small business groups, fall on deaf ears.

These groups occasionally consult selected think tanks or NGOs in the name of common people. People’s representatives, like local governments, are hardly consulted. Policy continuity is another problem as policy preferences change with the transition of government. It discourages investors from investing in Pakistan.

Read Pakistan’s undocumented economy

On top of that, the policy-making process does not follow the scientific decision-making philosophy. Policymakers look for shortcuts or hire donor-supported consultants to devise a policy. Decision-making process must be inclusive where we can learn from China. The Chinese policy-making system is highly inclusive. For example, its five-year plan usually takes two to three years before being finalised.

 

The process kicks off with local governments and representatives at the village level. It culminates at the People’s Congress routed through relevant governments and departments. Before adoption, China puts the plan on internet and seeks the input of common citizens. For implementation, China also embraces an inclusive approach as government offices, local governments and Communist Party officials work together to achieve goals of the plan. Besides, a scientific approach is applied where leaders use data and build different models. The best model is selected for execution.

Slack accountability

In addition, Pakistan has a very weak monitoring, evaluation and accountability system. It is common knowledge that planners and executors do not follow timelines, which costs the country and society. The country suffers financially while the society has to wait for benefits of government schemes.

Primary reasons for the lousy performance are the lack of robust monitoring and accountability, political point scoring, inefficient bureaucracy, exclusion of major stakeholders and interference from non-relevant actors.

Moreover, the ruling party tries to prove that all is good by painting a rosy picture and convincing people that all projects are on track. On the other hand, the opposition portrays a scary picture, denouncing the ruling party for delays, corruption and cronyism.

The government can look at three proposed interventions to overcome these problems. First, it can constitute a high-profile and influential committee to tackle political games.

The committee should comprise heads of five leading political parties, the opposition leader, services chief and judiciary chief. The prime minister should be the head. The body must be responsible for failure or success of any interventions.

On the economic front, there is a need for undertaking more serious and robust reforms. The present system is complicated, inefficient and, to some extent, anti-business. Pakistan will have to work on two fronts: reforming the business environment and behavioural changes in society.

On the business environment front, problems are deep-rooted and structural. They start with registration of a company or business. One has to deal with multiple institutions and departments to register a company.

The process of getting services and services connection is even more complicated. While operating a business, the businessmen have to satisfy multiple stakeholders. Over the last few years, Pakistan has introduced some reforms, helping to improve its ease of doing business ranking.

However, despite a better ranking, the business environment on the ground has not improved much. The government’s rhetoric of facilitation could not be translated into action.

For example, according to the Ease of Doing Business ranking, it takes 113 days to get an electricity connection, 125 days for a construction permit and 105 days for property registration. However, in reality, it takes many more days; rather, it sometimes takes many months to avail of these services.

The tax system is even more complex and run by a complicated nexus of departments and agencies.

The writer is a political economist and a visiting research fellow at Hebei University, China

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