May 10, 2005	Tuesday	Rabi-us-Sani 1, 1426

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BHURBAN, May 9: Decentralization of authority cannot take place without an independent and strong judiciary and rule of law, a visiting American academician told Pakistani bureaucrats. “Irresponsible press and non-government organizations (NGOs) can defeat this process”, added Roy Bahl, Dean and Professor of Economics at Georgia State University, at a lecture programme arranged for senior government management to understand the intricacies of fiscal devolution here on Monday.

He maintained that capacity development and prioritization of spending at the local governments could not be achieved without allowing autonomy to the provinces.

He said four years down the road the Pakistani decentralization plan has not fulfilled all the standards that were being met elsewhere in the world.

About the specifics of the Pakistani case, Prof Bahl said, he was not much aware of the peculiar misdirection wherein the authority had been devolved from provincial down to the local tiers but not from the centre to the provinces.

His attention was drawn to the fact that the devolution of authority from the provincial to the local government had, in fact, been exercised under the central command, which had put the reverse gear on the decentralization process.

Prof Bhal emphasized the need for drawing up a clear plan for decentralization with a national debate before launch, the imperatives which were never met in Pakistan. He said local governments should not be the spending agents of the provinces and the centre but autonomous in listing their own spending areas.

A decentralization law and related constitutional amendments with a clear transfer of power formula are the basic components of decentralization, he added.

The National Finance Commission should decide on how to help underdeveloped areas with low tax potential like Balochistan so that the revenues are transferred from high potential areas to be spent for bringing the underdeveloped ones at par with others, though such a policy will have implications.

He recommended creation of local think tanks and supported base for helping fiscal decentralization and said the governance issue should remain the focus area at all the transitional stages.

Bob Searle, a former senior executive of Australian government and Secretary of the Commonwealth Grants Commission, in his lecture on inter-governmental transfers emphasized the need for rational performance checks.

The conditions attached to the transfers of funds and revenues from the federal and provincial to the recipient levels might sometime be harsh enough to impede performance, he added.

An official of the Sindh government said the provincial finance commissions were sometimes so irrational that in some cases the salary budgets were higher than the proceeds they get under the awards. He gave an example of Hyderabad, which he said was one of the few largest cities but it could get enough resources under the PFC award to fund its salary budget.

Another official of the Sindh government said the province had been providing resources to the districts on an annual PFC awards on an interim basis but now a three-year PFC award was in the process of finalization.

He said recently some new districts had been created in Sindh without serious thought because the three-year PFC is in the final stages and it is not clear from where these new districts would get funds even for normal business.

Additional secretary, finance, NWFP, Ziaur Rehman, said the Frontier government was giving 50 per cent weight to population and 25 per cent each to backwardness and infrastructure but it was still not satisfactory because the resources of some districts had to be cut to accommodate others.

Minister of State for Finance Omar Ayub Khan, Balochistan Finance Minister Ehsan Shah, Principal Secretary to the Prime Minister Javed Sadiq Malik, Punjab Chief Secretary Kamran Rasool, and Finance Secretary Salman Siddiq confirmed their participation to the meeting but did not turn up.