08 November 2004	Monday	24 Ramazan 1425

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As one of the many jobs that have been outsourced by the government to its donor, the World Bank, has been given the assignment to prepare a report on the economy of Sindh in the next six months. This report will suggest policies and reforms that would accelerate economic growth and reduce poverty, "well on time before the next budget in May".

For the preparation of the report, the World Bank is sending two missions to Karachi. The first will reach here next month while the second on March 5th. The mission will hold discussions with Sindh officials, business leaders, politicians and the retired civil servants. A series of workshops and seminars are also expected to provide input for the proposed report.

Earlier, a mission from the World Bank in August this year has given an interesting cut off year 1999 when the average per capita income of Sindh started falling at an average rate of 0.5 per cent a year. This was the period when average annual income in other provinces of the country was rising by 1.39 per cent. The year 1999 reminds the people of the military take-over of the rigid enforcement of the IMF-sponsored economic reforms pushing a large number people below the poverty line.

In its 'concept note' given by the World Bank in October this year it was observed that Sindh has gradually lost its leadership position to the more reforming provinces. It found that "starting in the mid 1990s, the Sindh economy has grown slower than the national economy, the intra-provincial disparities have intensified and the province's finances have been under severe stress''.

This brief 'note' does speak of the rut that had set in Sindh's economy since mid 90's which has picked up momentum after 1999 aggravating the poverty situation in both the urban and rural areas of the province. It has discreetly skipped to mention the causes of the downward slide in socio-economic situation of the province.

"Sindh has been hit by the acute water scarcity since 1999 after an arbitrarily cut in its share of river waters'', Taj Haider, a former Pakistan Peoples Party Senator told Dawn. Since 1999, the agriculture in the province suffered a big setback and does not appear to be have recovered.

The mid-1990s is the other cut off period that the 'note' speaks of. It is in November 1996 when a World Bank's Shahid Javed Burki took over the finances of the country in the caretaker government led by then President Farooq Leghari. Burki stopped transfer of federal funds to Sindh. Not only that Sindh finances came under severe stress since then, the award given by the National Finance Commission (NFC) in 1997 was the final crippling blow from which this province has not been able to recover. Sindh continues to suffer from the impact of unjust and unfair 1997 NFC award till this day.

Taj Haider who was closely associated with the PPP economic team and represented Sindh as a private statutory member on the NFC said that the PPP government improved the provincial revenues. The federal government too had provided Rs 2 billion more than the share of the province and Sindh did a good development job in 1994-95 and was well poised to maintain the tempo in 1995-96 "when the civil-military power axis struck and removed the PPP government''.

The World Bank team in August also met Dr Kaiser Bengali, Managing Director of the Social Policy and Development Centre (SPDC). Under his leadership, the SPDC brought out a document on pauperization in Pakistan at the district levels and found that two southern provinces- Sindh and Balochistan- are poorer compared to other two provinces in the north- the NWFP and Punjab.

"You find income generation in Sindh more than in Punjab and NWFP'' Dr Bengali told this correspondent. But income accrued in Sindh is less than the other two provinces. He attributed this to almost unending transfer of resources from Sindh to Punjab and NWFP.

The SPDC chief executive has been targeted for his work on growing poverty levels and he has already resigned because of the "interference from the high and mighty'' of the land. He believes that Sindh's status is not that of a federating unit but that of a colony.

"Sindh administration suffers from disempowerment'' he said and hence has not come up to the expectations in governance and delivery of public services. "There is no vision and decisions are not taken in the context of any particular policy direction'' he pointed out. He said that mass transport issue is being tackled without any long term urban development programme. And this intellectual bankruptcy is visible in all spheres of the government activities.

The 'note' observes with concern the intensification of political polarization and the increasing ethnic strife in Karachi which has 'paralyzed' the decision-making machinery in the province. In its footnote, the World Bank team observed that PPP holds sway in rural Sindh, while the Mohajir Qaumi Movement remains the most popular party in the urban areas.

"Quite many of the elected PPP members from Sindh rural areas have been bought over by the government'' Taj Haider wondered if they are fostering the ethnic strife.

Sindh has now a coalition government. It has four power centres. The Governor of the province represents the MQM and holds meetings everyday on all major issues of the province and takes decision. The chief minister is the other power centre who also takes decisions. Karachi is the biggest urban centre with almost one-third population of the province. This mega city is being governed by a Jamaat-i- Islami Nazim. And then the Corps Commander of the Karachi Corps also interferes in the provincial affairs. No wonder, the civil servants are also divided and hence what the World Bank 'note' observes no decision-making.

How does this proliferation of power centres affect the government. The Sindh's government's annual development programme has 45 per cent of the funds allocated for new schemes. Historically, hardly 15 to 18 per cent of the funds are given for new development schemes while bulk of the funds are used for completing the on-going schemes. The development programme is not moving ahead. The coalition government took a decision to recruit 43,000 employees. Syed Sardar Ahmad, the Sindh Finance Minister was opposed to this recruitment. The World Bank too finds Sindh government over staffed.

Sindh was one of the most prosperous and advance provinces of the undivided India after it was given the status of a province in 1938. It remained so after 1947 in Pakistan. It was the only province in undivided India that paid back the amount of money spent on construction of Sukkur Barrage in 1935.

Sindh's fortune changed for the worse when two barrages Kotri and Guddu were constructed one after the other during the decades of 50's and 60's that brought very large tract of lands under cultivation. Thousands of acres of land were allocated either free or at throw away prices to the officers in armed forces, civil servants and judges of higher judiciary who were all non-locals. Many more people also came to settle down in urban areas in Karachi and Hyderabad. There are transport mafias and land grabbers who in close nexus with the administration have wreaked havoc.

The World Bank 'note' has itself observed erosion of the government's effectiveness which manifest in the deteriorating law and order situation and the rising wave of corruption. It blames the various government agencies for failing to effectively coordinate their activities and serve the citizens.

Because of these limitations, Sindh's financial health has been impaired. Sindh continues to remain heavily dependent on financial transfers from Islamabad. But the World Bank mission has turned a blind eye to the fact that Islamabad still controls more than 90 per cent of the revenue resources. The provinces have hardly 10 per cent of resources and that too are inelastic taxes.

Sindh has been asking for complete devolution of sales tax on services and a part of sales tax. If efforts are made to enhance the tax collection capacity of provincial taxation department, the tax collection in the province will increase manifold that will take care of mega-cities like Karachi, Hyderabad and Sukkur and other small cities, towns and villages also.

The World Bank looks Karachi as the "home to the largest pool of English-speaking skilled manpower in Pakistan and its proximity to the Arab world, Sindh has the right ingredients to emerge as an important hub for off shore outsourcing of modern services like financial services, communication and IT.