EVERY government in Pakistan has had a pet project or slogan to gain traction in the public. For PML-N it has been motorways and other infrastructure projects; for PPP the age-old ‘roti kapra aur makaan’ for all has still not lost its populist appeal as an increasing number of people approach the poverty line. For the PTI it is the uprooting of systemic corruption that it sees as an evil that has kept the middle class deprived and unable to change its financial position through hard work unlike many of its peers abroad.
During the first two years of PTI rule, reforms took centre stage but when these failed to see the light of day in sectors ranging from the civil service to state-owned enterprises, and remained tucked away in files and folders in the offices of the Prime Minister’s Secretariat, the government solely focused on the corruption of previous regimes. Now, even that hoopla has lost its appeal because of the repetitiveness of the exercise, with no tangible results. This has forced government wizards to come up with another buzzword — ‘audit’ which in theory is an exercise to ensure transparency in government but is actually more of a cover-up for the extreme incompetence which is quite evident by now.
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What these audits also do is to discourage potential investors.
Hardly a day passes that the prime minister or one of his overzealous ministers does not announce a special audit of a project or a government department. To make the notion of transparency conspicuous, what government auditors mostly do is to evaluate the departments they are auditing by implementing laws and procedures in letter, though not in spirit, and creating audit paras pointing to irregularities in the billions which are eventually settled but that, in the meantime, make sensational headlines. Departments such Railways, the Petroleum Division, the National Highway Authority etc were under the spotlight more than once in the last year or so.
The only outcome of this fixation with audits are some very rich auditors, not because of the hours they put into the assigned job but because of the way they approach the audit. It has been alleged that in some cases when auditors land in a department, settling audit paras entails the exchange of money. For those who have financial stakes, audit paras would mean a delay in payments and anyone with enormous capital invested in various projects cannot risk that. Hence the greasing of palms.
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Sometimes audits also paint a very misleading picture as in the recent case of a special audit team of the auditor general of Pakistan. It was pointed out that there were irregularities of over Rs15 billion in the corona funds for Punjab during 2019-2020. Does this mean Rs15bn were embezzled? Absolutely not.
What these audits also do is to discourage potential investors. For example, the government recently started the audit of all oil refineries and oil marketing companies to rule out the possibility of irregularities in taxes, product sourcing and transportation costs. This has been undertaken in addition to the countless mechanisms already in place for OMCs including regulation by Ogra, internal audit and independent audit reports prepared by reputed auditing firms that are subsequently submitted to the SECP which evaluates and crosschecks the data. Potential investors see the unnecessary spotlight as a risk to their investment because unsettled audit paras delay financial closure of an investment, subsequently affecting returns on investment.
In one breath the prime minister talks about the ease of doing business and in the next announces an audit or investigation which creates panic and uncertainty leading to an irreversible loss for businesses. Whatever little space is left to envisage a viable business pro-position in the private/public sector is filled by a proactive judiciary.
It is one thing to be able to register a business but quite another to have a conducive environment to successfully run it. The ability to get a tax registration number or have a company registered with the SECP within a couple of days would make the country score high on various indexes prepared by organisations monitoring the ease of doing business. But will that change the fact that the business will be harassed by tax officials as well as bribe-taking functionaries as soon as it starts operating? Absolutely not. Also, does that insulate the business from the swelling cost of doing business due to the plummeting rupee and increasing input costs of raw material? Absolutely not.
Lastly, a no-brainer. Will the prime minister’s approach of blaming previous regimes for everything going wrong fetch him another term in government? Absolutely not.
The writer is a former civil servant.
Published in Dawn, October 6th, 2021