TO TAP the potentials of economic growth, the government is striving hard to steer Pakistan out of various national economic ills which have infected the economy and stability.

The policy-makers, under the pressure of public’s persistent demand, have chosen to give top priority to dig out old cases of corruption and make policies to eradicate future corruption from the system.

It seems that the perception of corruption in the wisdom of our common man and most political leaders is related to financial fraud, misappropriation of public or bank funds by circumventing the rule of law and or misuse of status. As a result, the government of Pakistan [GOP] has taken swift steps to address this issue. The result of this policy option is naturally to investigate old cases and arrest the suspected ones reputed to be corrupt.

The natural impact of this policy is chaos resulting in flight of capital, brain drain and unpredictable climate for bureaucrats, businessmen, industrialists, politicians and related Pakistani citizens. This is a greater setback as any of these corrupt were not alone but teamed together with the main expatriate culprits. It is understood that in Europe, corporate corrupt practices are given tax rebate at home for better profit.

As per Transparency International Reports, it is clear that financial corruption exists in most of the countries, including the developed ones. But natives are penalized while main expatriate or other culprits do escape. In spite of this, these Transparency International’s listed countries are growing fast, their balance of payment is dynamic, their poverty level is decreasing and per capita income is growing.

Why is it so? They have a culture to work hard and are attentive to their duties in the context of time. Our governments have been running after undocumented corruption but have simply ignored the documented one. For economic growth and utilization of our national resource potentials, the government has, there- fore to develop serious policy options to eradicate this documented corruption of non-performance.

Most of our governments have been taking a slow or delayed action on the culture of non-performance, i.e., not working on time and not completing the project within the approved cost which is suicidal for economic growth in spite of billions of dollars of aid and loans to Pakistan. Damage to economy by this corruption is comparatively much more than the financial corruption.

We may estimate the loss to national economy due to various categories of corruption. The first category of financial corruption is estimated to inflict a loss of about Rs100 billion per annum to the country. The rate of success to catch those involved in in financial corruption in the past is naturally very low for lack of documented evidence. Future financial corruption may be reduced by taking appropriate steps, but it could not be eradicated anywhere in the world. However, action on past corruption may result in an environment of chaos and this policy be reviewed in the interest of future economic growth.

Therefore amnesty may better be examined instead of wasting time and money on past corruption. Even the champions of corruption succeed to get exiled for peanuts. The effective gain in these cases may be 30-35 per cent or Rs30-35 billion a year. The policy may be good for future prevention provided the system is set on a regular basis to monitor the financial corruption by a national computerized system of income and expenditure by all entities and householdsowever.However the possible effect may be that this corruption may not be totally eradicated but may grow further as the GOP tries to control it. Therefore, alternate options need to be evolved according to our culture, which may lead to a change.

The second category of corruption i.e. the culture of non-performance with disruption of productivity and unsatisfactory governance is visible and mostly quantifiable. It can be monitored and controlled as it is documented in each department’s programme to complete the public sector development projects with a specific cost tag and time thereto. On the basis of such documented programme, the ECNEC or GOP approves the PSDP. However, the ECNEC has been acting on the policy to repeatedly approve an increase in cost and extension of time to complete most of the development projects probably without taking stern action against such cases. The ECNEC must strictly stick to the original approval with +\- 15 per cent variation in cost as per rules and completion on documented time. Losses on this account can be estimated correctly.

Debt repayment: The public sector investment on development is uncontrolled due to bad governance. Projects passed by the ECNEC are based on economic feasibility, with an estimated component of cost, maintenance and anticipated stream of benefits. This is only achievable if the project is completed on time and within +\- 15 per cent of the estimated or approved cost. Normally most of the public sector projects are completed in 1.5 to 3.0 times the estimated cost and in 3-4 fold time As a result we lose 2-4 years estimated stream of benefits and due to higher cost the project becomes unfeasible. On some projects the approved funds are not made available by adhoc reallocations.

(a) The debt repayment has become more and more difficult due to various category of corruption i.e financial, delays and discouraging use of technology for better governance.

(i) The investment of loans mostly on such projects that seem economically feasible on paper, but turn out to be unfeasible due to the corruption of non-performance, delays and cost escalation.

(ii) Most of the projects ultimately cannot afford to pay even the interest on the loans, which is to be repaid by another short term, and suicidally expensive loan.

(iii) The stream of project benefits is long delayed and much reduced. This results in fiscal deficit.

We have yet to learn good governance and avoid paying a sky-high cost for this slackness. Each government, in spite of its strong resolve fails to economize on the expenses and to strive for good governance. This is also ironically much more expensive due to corruption of non-performance.

Other corruptions: (a) financial: To eradicate financial corruption of Rs100 billion a year is much more difficult for past cases, but we could reduce it in the future. Two previous governments have probably failed while the present government may succeed to achieve around 30 per cent success. Therefore, expected benefit is Rs30 billion and loss of Rs70 billion a year.

(A) Taking the previous annual public sector development programme (PSDP)of Rs120 billion and $1.5 billion average development loan or a total of Rs195 billion,the national loss due to, say, two years’ delayed completion on development projects is estimated below:

The non-allocation or absence of funds is another constraint to complete the project. The delays on many anticipated projects’ completion exceed beyond four years are on record. On such projects the above losses are further escalated. The PSDP goes on shrinking in terms of new project priorities resulting in a stale growth. That is mostly one of the reasons of our unstable economy, which assumes estimated accumulated average resource drain/year of over Rs40 billion a year.

How can we lose an average of 20 per cent on the PSDP? The impact is tangible resulting in an adhoc policy of funds allocation, fiscal chaos and the so-called intermittent mini-budgets throughout the year.

(C) Non-induction: Most of the GOP functionaries need training on what can be the results of use of modern technology on governance and productivity. It is on record that the use of technology for resource generation and conservation is the most recognized method of economic growth the world over, but Pakistan failed to click on this issue and therefore we are at the extreme losers end.

The agriculture being our economy’s backbone, we have failed to use technology for its management and we are at the losers end resulting in higher cost of produce and less yield. This is a major backbreaking loss to our economy, which is estimated as follows:

i. Loss on agriculture yield and reduced possible inputs cost if arable land management technology (ALMT) would have been applied and used is estimated at Rs 150 billion to Rs 175 billion.

ii. Loss on all urban services mismanagement without using technology tools (4 provinces), Rs25 billion to Rs40 billion.

iii.Loss on account of not using new technology, new methods of resource generation, and good governance,is estimated at Rs30 billion to Rs40 billion.The total loss on three counts comes to Rs210 billion to Rs255 billion. Or in other words the economy would have gained an equal amount had we used modern technology in production and governance.

Now the question is that in “B” category above, how can we afford to lose Rs101 billion on a PSDP budget of Rs195 billion. It is reported that to balance these losses the government takes some of the following actions:

1.The new allocation on new projects in the ADP are made but packages promised to provinces are cancelled and many federal projects do not take off.

2.GOP is forced to take huge loans from local banks. 3.We cannot meet our planned repayment responsibility and the IMF imposes conditionalities that result in more poverty, disabled government losing respect in public opinion.It is one of the major reasons for removal of governments on charges of corruption and mismanagement.

The above figures make it amply clear that for our economic growth how essential it is to control not only one but all three forms of corruption defined above. The most beneficial are to control the corruption of non-performance, delays and the neglect of application of technology in national development and governance.

All the governments have been chasing corruption, category A and not B and C. A is nominal and is only 7-10 per cent of total national corruption or we are consistently loosing 90% benefit of economic potential and growth by neglect on the control of corruption in category B and C.

This unfortunate culture of nonperformance of documented commitments which is accountable is a serious killer virus for Pakistan’s economy. It is already well spread. If we continue to neglect the aspect of timely performance of duty and run after catching the past financial defaulters, Pakistan will not be able to recover from the present economic sickness.

The best workable option is to develop the culture of duty consciousness and timely performance by insisting and ensuring efficient and good governance for the timely completion of all tasks and induction of technology on more resource generation and conservation . Each project task schedule be made, followed and monitored on war footings.

The government should seriously consider the following:

i. To avoid flight of capital, focus monitoring on current financial corruption and consider amnesty in respect of past cases of corruption which happened in a different environment.

ii. Forgive all bureaucrats for the past political orientation and ensure them full security for being neutral and acting effectively to meet all commitments as per rule of law and without misuse of discretionary powers.

iii. Focus on getting maximum productivity, develop and reward the culture to work hard for timely completion of tasks with quality and productivity. To achieve this, a strong monitoring system has to be set up under the Planning Commission to ensure completion on time and develop a system of reward and penalty.

iv. Relevant ministries,—more particularly the ministries of science and technology, finance, agriculture and urban rural resource management should focus on use of application technology through domestic consultants to identify, manage and conserve resources and produce goods cost-effectively and of good quality for a faster growth of the GDP and alleviation of poverty