Can the bureaucracy deliver?

Updated November 26, 2018

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A WEBSITE by the Imran Khan government to inform people on the progress made in its first 100-day agenda lists a number of decisions made and actions initiated to arrest the persistent economic slide, revitalise growth, create jobs and boost exports.

Important measures announced or initiated include reduction in energy prices for the Punjab export industry, formation of a task force for developing a national tariff policy, formulation of provincial labour and industrial policies (by PTI governments in Punjab and Khyber Pakhtunkhwa), overhaul of the Federal Board of Revenue (FBR) by separating tax policy and administration, and constitution of separate councils of economic advisors and business leaders.

A plan to create a wealth fund for turning around loss-making state-owned enterprises is being worked out. The policy board of the Securities and Exchange Commission of Pakistan (SECP) has been reconstituted to create a business-friendly and enabling environment to charm private investments into the manufacturing industry in an attempt to increase exports and substitute imports.

Reforms are ‘underway’ to make energy affordable, eliminate inter-corporate debt in the power sector, recover unpaid electricity bills and reduce system losses (including theft), and shift to renewable energy.

The persistent economic downturn is indeed the most important issue facing the country and the PTI government.

In the words of renowned economist Atif Mian, who was forced to quit the economic advisory council days after its formation, Pakistan’s inability to grow like everyone else around it — China, Bangladesh and India — is killing our children, an issue that Mr Khan himself had raised in his inaugural televised address and pledged to address by reviving the sliding economy.

Many businesspersons and economic analysts this correspondent spoke with are glad that the government is moving in the right direction but have doubts about the ability of the rusty bureaucratic machinery to deliver.

“They (government) have taken several important initiatives like separation of tax policy and administration, abolition of the bureaucratic control over the SECP policy board, revision in energy prices and so on in their first 100-days. But a lot more needs to be done to rebuild the economy and stimulate growth,” noted the CEO of a business council.

Hasaan Khawar, a development professional and fellow at the Consortium for Development Policy Research, was of the view that the people calling out the PTI on its election promises was unprecedented and had generated debate on issues that were never discussed before. “People questioning the PTI government on its performance, something never seen before, has enhanced the sanctity of party manifestos.”

He appreciated the government initiatives to restructure the economy for sustainable growth, but said no clear plan had been announced so far despite the passage of 100-days in power.

“The formation of different task force to develop proposals on various issues facing the country is a positive development but the bureaucratic domination of these bodies has affected their effectiveness.

“Similarly, we do not know if the government has ever consulted the economic advisory council on issues like just concluded talks with the International Monetary Fund,” Mr Khawar concluded.

A businessperson, who requested anonymity, was critical of certain appointments at top positions: “In departments like the FBR that have a direct impact on growth of businesses and companies.”

Moreover, he questioned the inclusion of some in the business advisory council who have no understanding of the issues facing the labour-intensive small- to medium-size businesses.

“It is strange that there’s no representation of the SME sector on the council of businessmen. With Razak Dawood leading it only large corporations are likely to benefit from its suggestions,” he said.

Syed Nabeel Hashmi, a leading auto parts manufacturer and exporter, said many initiatives being taken to spur economic growth were positive. But he was worried about the bureaucratic machinery’s eroding capacity to implement whatever plans or proposals are finalised to boost the industry and exports.

“Our government machinery is inherently incapable of creating an environment in which companies and markets can thrive, a major factor behind very low private investment.

“You cannot expect the economy to turn around or even a flawless economic programme to succeed without reforming

and overhauling the bureaucratic machinery, which is responsible for on-the-ground implementation of policy initiatives,” he stated.

The prime minister’s 100-day agenda tracker can be viewed at www.pm100days.pmo.gov.pk

Published in Dawn, The Business and Finance Weekly, November 26th, 2018