A MISMATCHED set of policies and half hearted government interventions have obstructed more than promoted the country’s economic progress. The system of governance rewards status quo and thwarts efforts to reform archaic mode of delivering development.
The government needs to reorient state structures to give the economy a direction, draw from strengths of a competitive market and restrain rent-seeking effectively. It needs to become lean, clean flexible and agile.
“The misplaced trust on the market, lacking self-discipline, has landed the world in a crisis. A delay in government reforms will rob people of a rare chance to put in place systems that will save them from suffering for the faults of others”, an expert commented.
The global financial crisis has humbled the champions of unfettered free market and forced them to reassess their attitude towards the government and its role in reconciling conflicting interests in a society.
“The debate on a stronger and efficient role of the government as a monitor and regulator to avoid market crisis has occupied centre stage in the intellectual discourse at all relevant forums because the governments contained crisis created by the private sector through bailout packages”, an expert with an eye on international policy trends told Dawn in Karachi.
The position of the government in transforming the economic policy bodies from rigid outdated structures into an organic entity, capable of adapting to the demands of changing times, does not get the attention it deserves, at least in Pakistan.
It is, therefore, not surprising that the economic policymaking organ, the Planning Commission of Pakistan, has not been able to guide the country out of the dark corner the economy finds itself trapped in. The GDP growth rate in Pakistan is about half that of India.
Experts are not inclined to accept the view that considers omissions by the economic policymaking hierarchy to be the cause of economic mismanagement. “There is method in this madness,” remarked an analyst who requested anonymity.
“Here, the vested interests clearly collude to weaken all institutions that hold promise to challenge the status quo that feeds their lust and greed”, the analyst remarked.
“The government should close down the Planning Commission of Pakistan as it serves no purpose with its current status reduced to a department under the thumb of ministry of finance. It seems that the first among equals (ministry of finance) aspires to run the whole government by itself”, a disgruntled Deputy Chairman of the Planning Commission, Dr Nadeem ul Haq, told Dawn over the telephone from Islamabad.
“An autonomous economic reform and planning commission should replace the current planning body that has been rendered toothless as it was placed under the ministry of finance that in greed for power has gathered more on its plate than it could digest,” a frustrated Dr Haq pleaded while accepting the responsibility for not being able to deliver.
“With my best efforts I failed to drum in the significance of economic planning in delivering development at the highest level. The National Economic Commission, the prime policymaking body in the country, cleared the economic growth framework in minutes last year not because all members were convinced of its effectiveness but because they did not intend to implement it and perceived it to be an intellectual exercise in futility”, he said.
A senior economist, who served at important positions in Islamabad, supported Dr Haq’s stance to make the Planning Commission autonomous. “The world has changed and so has the role of economic planning. It is true that the commission, over the years, has been reduced to a project level organisation that has about Rs350 billion at its disposal for Public Sector Development Programme. It is actually just one of its three tasks. The system does not allow it freedom to evolve economic policy framework and monitor its implementation once it gets government endorsement”, he said.
“The next government needs to legislate to make the Planning Commission autonomous for it to deliver without fear or prejudice. The government should spell out the economic targets and leave it to the commission to translate them into a workable benchmarked plan,” he added.
Some private sector leaders contacted were not amused by Dr Haq’s views who, they felt, was too harsh towards the industry and sports ideas not workable in this country. “In his growth strategy, that was developed by strangers (foreign economists) without any input from trade and industry, he talks of software development. Yes, businesses, suffering because of power breakdowns, are interested in hardware development even if it annoys the deputy chairman”, a tycoon from Lahore commented.
Some experts blame old mindset, the lack of political stability and understanding amongst the political elite of the economy under stress. “The ministers lack confidence because their knowledge about the tricky subject of economy is limited.
The bureaucracy, that runs the show for all practical purposes, is inward looking. The federal secretaries have a high turnover rate that compromises their efficiency. Beside they are known to be interested more in their perks and privileges than their temporary assignments. They try to squeeze maximum benefits from the post before their next transfer,” commented an expert with inside knowledge.
“The wedge between the potential and the performance of the economy demands bipartisan approach to resolving problems. An autonomous Planning Commission sensitised to needs of stakeholders can go a long way in democratising the economic opportunities, monitoring implementation of agreed plans, holding executers accountable and giving a direction to the rudderless economy,” an analyst concluded.