NOW that the repeatedly promised general elections are just a few months away, it might be useful to collect our thoughts about the mechanics of conducting them — particularly the role that political parties and their workers play in managing electoral campaigns and contests.

Political parties are essential, indeed indispensable, for making democracy work. Pakistan inherited the Muslim League, originally established in undivided India in 1906, and numerous other parties appeared on the scene soon after independence. But this did not happen without an element of doubt about their efficacy. Many of the ulema, sceptical of “western” democracy, disparaged political parties on the ground that their operation would divide the community. Their reservations were not, however, heeded and soon they themselves launched parties and contested elections.

The military in Pakistan is also disapproving of political parties. It has banned them, or excluded them from the electoral process, during periods of its dictatorship. But eventually it had to restore them. Ayub Khan not only permitted them to reappear but agreed to be the head of one of them. Ziaul Haq barred them from participating in the 1985 elections. But soon Mr Junejo, his nominee as prime minister, discovered that the National Assembly could not function effectively in the absence of parties. The Muslim League was then revived both within and outside the legislature and so were other parties. They were barred, once again, from the local elections held in 2001, but they are active in the elected councils, even if informally.

It would seem to follow that parties have, even if haltingly, become a part of our political culture. But how does the public perceive them and what does it expect them to do? They should, in the first instance, identify the issues and problems facing society, establish priorities, formulate policies, and propose ways of implementing them. They do some of this in preparing their “manifestos” but, as we know from experience, they abandon these soon after they have been printed. The major parties in Pakistan are pragmatic, not ideological, and if returned to power, they will deal with issues as these arise, using such means as become available. They are concerned mainly with attaining power, and they will worry about other things if and when they have attained it.

According to one view of politics, a man of honour seeks power to serve the public good. In another view, leaving aside the matter of honour, he wants it because its possession gives him a good feeling and brings him many other gratifications. In actual practice, and in most cases, a mix of these two types of consideration motivates politicians.

During British rule and, one might say, until the end of Zulfikar Ali Bhutto’s government, the expectations of candidates for legislative office were rather modest. Elections modernized tradition; they were a new and approved way of defeating, and humiliating, rivals and enhancing one’s own prestige in one’s area.

An MNA or an MPA might want to be seen as having access to higher civil servants, obtain licences for owning a gun or two, and possibly enable a son or a relative to find a job. But the thought that he might make a significant amount of money, as a result of being a legislator, or intimidate a superintendent of police or a deputy commissioner did not normally enter his mind. Legislative corruption on a large scale first surfaced during Ziaul Haq’s rule, because he encouraged it and it flourished during the regimes of Benazir Bhutto and Nawaz Sharif.

Whatever the mix of ingredients in a politician’s motivation, winning elective office requires a great deal of work, and the candidate cannot do all of it by himself. He needs help, which brings us to a consideration of the party workers’ role. We are concerned with the kind that go from door to door to maintain the party’s contact with its support base among the masses, deliver its message, explain its needs, and bring people out on the street, to meeting places and to polling stations.

Even though the tradition of voluntarism is weak in Pakistan, men and women may be found who are dedicated to their party’s ideology (or personally devoted to some of its notables) enough to toil for it on a voluntary basis. One might expect this inclination to be prevalent in the Islamic and, to a degree, in the ethnic parties. It is interesting to note, however, that the Jamaat-i-Islami also has many full-time workers whom it pays a regular salary. This is not the case in either the PML or the PPP. Nor does either of them subscribe to an ideology capable of attracting any large number of voluntary workers. How does it then keep the workers it does have? They have to have some kind of compensation.

In rural areas the problem is easier. Here the party notables are likely to be landed aristocrats who can recruit some of their own tenants and persons from their extended families (“biradaries”), and caste groups to help with their election campaigns. But they may still have to hire persons, on a temporary basis, to do certain election-related chores and pay them, for the most part, out of their own funds. They are not likely to get a whole lot of assistance from their party organization. The candidate’s dependence on workers and the party is much greater in the cities where relationships, and even knowledge of one another, tend to be impersonal. Furthermore, the worker’s attachment is probably focused on the party more than it may be on a particular politician in his own area.

Party workers are a mixed bunch, and their needs and expectations are not the same in all cases. They don’t expect much of anything when their party is out of power other than protection, if possible, from the persecution unleashed upon them by the ruling party.. It should, however, be noted that high-ranking opposition politicians are not entirely without influence in government and, on occasion, they may be able to get things done for their workers by invoking the help of friends and relatives in high places. Even so, the issue of rewarding the workers is more urgent, and fraught with all kinds of impropriety, when their own party is in power.

They do not generally expect to receive cash unless they are party employees, such as those who maintain and operate its offices. Many workers are self-employed (shopkeepers, artisans, rickshaw drivers, etc.), or they may be working in a government agency or a public corporation. A few may not have any regular, full-time job. But they do want jobs for their children, relatives and friends, if not for themselves. The parties in power do try to accommodate their demand, which is one of the reasons why public corporations and nationalized industrial or financial units have been flooded with un-needed employees and gone into huge budget deficits. The workers are not, however, satisfied because many of the jobs in question go to the friends and relatives of the party bosses in preference to their nominees.

On the basis of interviews with about a hundred of them a few years ago, I know that the PPP workers are aware that, when in power, their party leaders, occupying high government offices, made a great deal of money unlawfully. They condemned this practice but seemed to feel that if the party bosses were going to persist in taking dirty money, well, then a part of it should somehow filter down to the workers’ level.

Workers in both major parties, at the ward and constituency levels, have another very interesting grievance, which is that they do not have any measure of participation in their party’s decision-making process-not even in the awarding of party “tickets” in their respective areas, let alone issues of high policy.

What is then to be done? It is clear that the workers’ expectation of unlawful rewards will not go away until the hands of their leaders are clean. If their hands were to become clean, some other happy results might also ensue. Good feeling, even enthusiasm, for the party would increase and so would the number of persons, with their own independent means of income, willing to work for it on a voluntary basis.

As the awareness that a party is doing something valuable for the polity expands, voluntary individual, and perhaps even corporate, donations to its treasury might also increase. It would be advisable to maintain a small corpse of permanent workers and pay them on a regular basis. This should be feasible, considering that the level of party activity between elections is low. Closer to the election time, temporary workers might be hired and paid.

Between elections party dignitaries at the constituency, district, provincial, and national levels should make contact with the people a lot more often than they do now. They might hold more frequent public meetings and put in an appearance at places where people ordinarily congregate. I remember that when I was an adolescent (which, alas, was far too many years ago), the Muslim League president in my hometown (Batala in the Indian Punjab), a very successful lawyer, came to the central mosque every Friday and delivered a political “khutba.” There is nothing wrong with our leading politicians doing something of the same order. Replacing the traditional “mulla” on the pulpit might even enhance attendance at the Friday prayer.

The issue of the workers’ participation in their party’s decision making also needs to be addressed. They are ignored because, like the rest of our political system, our parties are highly centralized. Decentralization and devolution are now coming into vogue and our parties would do well to move in that direction. Some version of the American “primaries” (a way of expressing local preferences in the awarding of party nominations), as a guide to the awarding of party “tickets,” might be considered.

PAKISTAN’s unending experimentation with laws and institutions has come closest to touching the life of the common man — for good or bad — under the present government. After local councils, it is now the police while the electoral and constitutional changes are impending.

Mercifully, the land reforms have escaped the government for want of interest or time. If the fruits of its economic reforms, despite official celebrations of success, have not yet reached the people, trust the euromoney and the IMF, soon they will. Shaukat Aziz would not be the world’s best finance minister if they don’t.

Meanwhile, the people have to contend with a four-tier local government which has no money, and an expanding police force which wants all the money. Most official organizations in Pakistan end up by paying their employees and not serving the public. The local councils have made a start that way. One nazim after another is asking for money from the government not for public works but to pay the employees.

When a year ago the National Reconstruction Bureau unfolded its elaborate local government plan it calculated that the administrative reorganization would save so enormous a sum that the councils would have a problem absorbing it. The apprehensions of shortage of funds or an excessive burden of new taxation were dismissed out of hand.

A senior colleague in civil service, Zafar Iqbal, had then pointed out to the NRB in these pages that the things, whether it is banking or law and order, do not happen on the ground as they appear on the paper. He had pointed out the difference between rhetoric and reality. The NRB chose to stick to its rhetoric.

Now the nazims want all the money to come from the government or the easier way out: tax imports and petroleum the proceeds of which the federal agencies would collect for them. Neither looks possible when the thrust of the ongoing economic programme is to reduce the budget deficit but the tax recovery is falling and, secondly, the effort is to improve the collection of the existing taxes rather than impose new ones, and that too indirect, on imported goods — which is anathema to the IMF.

For lack of funds, the employees‘ protests have started in the councils already, and the civic services in the hands of the elected people are fast deteriorating. Even if the new system is somehow sustained by the present government, for it is its own proud creation, suspensions and dissolutions may start soon after the elections.

Historically, the parliamentarians have shown little tolerance for the councillors as the funds for development and employment are never enough for both to satisfy their respective constituents and cronies. If the councils flounder this time, the damage done will be much greater, for the nazims are responsible not for municipal services alone but for the whole gamut of local administration, including law and order.

The local councils, in any case, cannot long survive on federal dole even if it were to come forth timely and in adequate measure. They must raise their own funds and determine priorities for spending them. If the roads in Karachi are to be planned, funded and built by the federal agencies, where remains the need for a city government or even a provincial government? The fundamental area needing reform is, thus, the redistribution of subjects between the centre and the provinces which the NRB insists is not relevant to its devolution plan.

An explanation for this ambivalent stance may now be found in a report (Dawn, February 7) that the NRB proposes to restore the divisions it abolished and abolish the provinces instead. That seems to be the NRB’s ingenious solution for the irksome demand of the provinces for more powers: starting yet another political debate which will take its own long acrimonious course.

The current topic, however, is the new structure of the police force. At first it appears to be costly and more on the side of the police commanders than the public. In the absence of resources the fear is that like the local councils it might also start, and end up, by paying the employees rather than serving the people better.

In the less-costly policing system now being discarded, just 16 per cent of the budgeted grant is left for all the other services and provisions after paying the employees. That explains the stories about the police stations requiring the victim of a crime to bring his own paper if he wanted his complaint to be recorded and bring a taxi if he wanted a police official to go to the site of crime. A large and better paid force may result only in more vexatious demands on the complainants.

The crux of the reform should be a smaller but better trained and not a larger force. No change in the command system or creation of specialized cadres would work unless the quality of the people comprising the force improves. Any amount invested will go waste. The first action, therefore, should be to screen out from the force the ageing, sick, obese and corrupt through an impartial mechanism and put the rest through a comprehensive training and reorientation course.

The new police scheme lays all the emphasis on the layers of command, complaint agencies, ombudsmen, citizen committees and role of the nazims but says little about the police station itself where all the action takes place.

The importance of a police station came into focus in a recent proceedings before the Lahore High Court. Nineteen persons detained on false charges, tortured and raped in Gulberg police station were recovered and produced before Justice Karamat Nazir Bhandari. Setting them all free, the judge observed in unusual rage and anguish: if it could all happen in a city where the governor, chief secretary, police IG and highest court of the province reside, what would not be happening in distant places; the British whom we curse day and night made and enforced just laws and left it to us to flout them.

The NRB and the ministry of interior are being naive in assuming that the multiple commands, ombudsmen, citizen committees and nazims would make a difference where the presence of governor, chief secretary, IG and high court does not. Justice Bhandari, despite his judicial insulation, knows it better.

No reorganization or reform would work unless it aims at converting the police stations from places of torture and extortion to one of relief and remedy. That is the substance. The rest is mere embellishment. And imagine spending billions only to defeat the hopes General Musharraf has raised in a despairing public.

IT has become imperative to revise the tax structure that has become highly centralized. It needs to be altered, if not revamped, to enable the provinces to reduce their dependence on resource transfers from the divisible pool.

This can be done by bifurcating the sales tax structure into two components: a 12.5% or 15% sales tax in the GST mode with an adjustment for the GST paid on inputs to be levied by the federal government and a 2.5% non-GST sales tax to be levied at the retail level by the provinces. The provinces may agree to let the federal government collect this tax on their behalf, so as to save on the costs of maintaining a large collection machinery.

In the interest of national harmony, Punjab will have to show greater magnanimity and support a change in the distribution formula to accommodate two major demands — an allocative mechanism that will not only be population-driven but also give weightage to revenue collections (the demand of Sindh) and geographical area (the demand of Balochistan).

However, the only sensible revenue collection criterion that can be used for determining shares, by giving revenue collected from a province an appropriate weight, would be income tax collected from the taxation of personal incomes. Only this indicator would faithfully reflect economic activity in the province (and hence the revenue contribution of the province). Using any other revenue collection criteria to derive weightage would be unfair because:

a) All custom duties and a huge proportion of income tax and sales tax is collected at Karachi, practically the only port in the country (in fact, the single largest collector of income tax is the Collector of Customs, Karachi!), taxes that are eventually paid by the entire population of the country;

b) Income tax returns are filed by the head offices of companies which are located in one province while the manufacturing facilities are located in another; and

c) GST levied at the manufacturing stage is paid on the output produced and sold throughout the country.

Such a distribution formula will involve some decline in the volume of revenue transfers from the divisible pool to Punjab but this reduction will only be marginal since Punjab through its own resource mobilization measures (and it has a fair amount of untapped potential) will be able to recoup these losses. More importantly, this small sacrifice of Punjab will go a long way in strengthening national unity.

In the light of the above, a desirable distribution formula would be one which gives 45% weightage to population, 15% to revenue collections from a province, 15% to backwardness (on the basis of criteria developed through consultations between the centre and the provinces), 15% to geographical area, 5% to tax effort (determined on the basis of receipts from provincial taxes as a percentage of provincial expenditures) and 5% to provinces with population growth rates lower than the national average.

The constitution of a new NFC should also provide an opportunity to re-examine the validity of the assumptions underlying the determination of the NWFP’s share of hydro-power profits, including the validity of the calculations on the basis of recognized accounting principles. It is interesting that the Rs.6 billion paid to the NWFP annually as its share of profits on Tarbela (that the NWFP is demanding more than Rs.12 billion for the same is another matter), irrespective of who made the investment on it (which incidentally was financed from the central pool of resources), translates into a rate of return in excess of 300%. It is instructive that whereas we find such a rate of return acceptable in the case of the NWFP, we were unwilling to pay HUBCO a rate of return of 18% — which, as this writer has argued in these columns before, was rather generous.

That the NWFP has legitimate needs that have to be satisfied is a matter that should be addressed by means of other formulae and criteria through mutual consultation to meet its requirements. Attending to these needs through resource flows based on indefensible formulae not only confuses the real issue but also raises the cost and distorts the pricing structure of an input as critical as electricity.

Furthermore, by levying GST on consumption at a high rate of 15% and above, the government has pre-empted the “surplus” that could be appropriated through taxation at the local level. Since the sales tax under the present arrangement is only being shared with the provinces, there is little scope for additional resource mobilization by the local governments, irrespective of what the NRB would have us believe.

There will eventually have to be a predetermined share for the local bodies from GST collections because their continued starvation is making efficient fiscal management an extremely difficult task at the local level. We all know that without financial autonomy, the administrative autonomy being provided to local governments under the new devolution programme would be meaningless. But this is a debate to which we can return at some later stage.

To move on to other related areas, it is important to recognize that at present the provinces are not, but should be, consulted before budgetary proposals on income tax and sales tax are concretized, since tax exemptions and alterations in income tax rates have an impact on the eventual share of the provinces. Changes in these parameters affect them more than the centre, since the proceeds from these taxes are included in the divisible pool. Better coordination between the federal and provincial governments as equal partners will also improve fiscal management. Therefore, national harmony requires a fundamental change in the mindset and institutional arrangement.

Such an arrangement would also be in consonance with the principle that it is the provinces that have the first right to all revenue collections (the federal government being an entity created by the provinces by ceding some of their powers) and it is they who should agree to give the federation a share in running their affairs, not the other way round. At present, the federal government is the dispenser of favours. The mere fact that some taxes have to be centralized, which is an administrative arrangement, should not be construed as the relinquishing of power by the provinces.

The centre’s financial strength comes not only from taxation powers superior to those enjoyed by the provinces, but also from its ability to raise capital to finance development expenditures. As things stand, there is a serious imbalance between central and local finances because of the authority exercised by the federal government over the mobilization and distribution of borrowings. Powers of borrowing and controls over banking and capital markets rest squarely with the centre, and provincial and local governments are not permitted to participate directly in the market for capital funds. As a result, the provincial governments are very much dependent on the federal government.

This is an unfair arrangement. The centre can be extravagant in its spending and borrow from the market, but places restraints on the provinces while asking them to fend for themselves. The ideal solution would involve an impartial body, such as the National Finance Commission or a truly independent State Bank, putting a figure on total domestic credit and then determining how this should be distributed between the federal and provincial governments on the basis of real need.

In Australia, for instance, there is a loan commission which comprises representatives of the state governments as well as of the commonwealth. After detailed discussions, during which the states also put in their claims, the commission determines the country’s total foreign loans requirements and their allocation between the states.

In this regard this writer is of the view that following the rescheduling of Pakistan’s external debt and the reduction of this burden for the federal government, there is a need to share this relief with the provincial government by rescheduling their debt so that some fiscal space can also become available to them for enhancing and improving the delivery of public services.

On hopes that the newly constituted NFC will take into consideration all the factors discussed above before formulating the award because, unless it does so, it will lead to a sharp, and possibly fatal, deterioration in the financial health of the provinces and the new local governments.

Some other changes are also desirable. In keeping with the spirit of greater democratization, there is a need for a minor modification in the Constitution. Under Article 160, the composition of the Finance Commission is partly the prerogative of the president. However, common sense suggests that both sides in dispute should have the right to choose an arbiter. If only one party to the arbitration can decide, then surely this reduces the whole process to the level of a farce.

At the same time, the National Assembly is not empowered to provide guidelines on the sharing of the divisible pool of taxes. Under the Constitution, it does not even legislate on the principles or criteria that govern the sharing of this pool. Ideally, parliament should not only determine the basis of sharing, but also lend approval to the membership of the Finance Commission. These steps would go a long way towards making the entire process more equitable and more in keeping with the principles of democracy.

However, lest we forget, a balance needs to be struck between the financial arrangements and the evolving political framework. The political environment has to be conducive to designing, developing and implementing a viable system of financial arrangements.