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Not going by the book

March 03, 2013

After approving a hefty Rs100 billion bailout package for Pakistan International Airlines last week, the chairperson of the cabinet’s Economic Coordination Committee, Finance Minister Saleem H. Mandviwalla, expressed his inability to say if the five-year ‘interim business plan’ could turn the national carrier into a profitable entity.

In fact, he smilingly said he had no idea when the company would come out of the red, but added that PIA was a symbol of national honour and therefore it could not be let go.

The institutions of national honour, so to speak, like PIA, have cost this poor nation over Rs2 trillion during the last five years. These entities have, in fact, emerged as signs of disrespect, bad governance and misadministration.

No businessman or economist would ever agree to put such huge amounts of public money into black holes, without putting in place iron-clad arrangements to ensure the complete turnaround of these ventures.

When asked if his decisions on oil pricing were based on any market study that was done to assess its impact on consumers, environment, quality and quantity of oil products and comparable international practices, the finance minister said as head of the ECC, it was not his responsibility to look into technicalities and the pros and cons of every aspect while making a decision.

“It is for the relevant ministries to examine all the issues involved, that they present all the facts in their summaries and that other stakeholders get an opportunity to present divergent views during a ECC meeting”, he said during his first news briefing as the country’s fifth federal finance minister, in as many years.

That is a clear indication of a lack of understanding of the rules of business on the minister’s part. This also exposes the quality of decision making by the ECC, which simply functions as a sub-committee of the cabinet without its own rules of business. First set up in 1965, the ECC, at least on paper, was constituted under a directive of the prime minister. In fact, the ECC is required to be headed by the prime minister himself, but usually he assigns the responsibility to the federal finance minister.

The decisions taken by the ECC are finalised only when they are ratified by the federal cabinet. But in most cases, its decisions are taken for granted by the cabinet, and their endorsement is just a formality. “The ECC is a useless forum, and the cabinet adopts its decisions only as a rubber stamp,” said a senior bureaucrat who is involved in coordinating its meetings. “In the last five years, I have seen that while arguments by ECC members were going in one direction, the committee’s chairperson would suddenly sum up the discussion and make a decision that would go in the opposite direction,” he said.

When desired by the prime minister, or the president, or the finance minister, a particular decision are made by the ECC without letting its members hold any substantive discussions on it. “This has been true for all finance ministers, including Syed Naveed Qamar, Shaukat Tarin, Abdul Hafeez Shaikh and now Saleem Mandviwalla,” said the bureaucrat.

For instance, whenever former finance minister Shaukat Tarin did not want to make a decision on any controversial issue by himself, he would reportedly invite his principal economic adviser, Sakib Sherani, to tear apart the summary with objections that the relevant ministries could hardly answer. And that would bring an end to the proposal. His successor at the job, Abdul Hafeez Shaikh, followed the same line, as he reportedly designated the deputy chairman of the Planning Commission, Dr Nadeem ul Haque, to come into play with criticism. With critical opinion on the table, Mr. Hafeez Shaikh used to constitute sub-committees to avoid taking controversial decisions.

Some of the other procedures that are ignored by the ECC include taking up issues that were not put on the radar screens of its members beforehand. This is usually the case when the issue concerns an influential ministry or a powerful lobby, where the hope is that a favourable decision could be reached without getting bogged down in any opposition from committee members. This is a clear violation of the rules of business established under Articles 90 and 99 of the Constitution, which requires the federal cabinet to take up issues after giving a “three-day advance circulation of agenda, together with the summaries relating to such cases,” and bars it from discussing “any issue raised unless the summary relating to it has first been circulated.”

Another complaint against the ECC is that it intrudes into affairs that relate to provinces, and also makes decisions on issues that concern provincial governments, without waiting for their input. Also, some of the issues it takes up supposedly fall under the jurisdiction of the Council of Common Interest (CCI).

A case in point: The decisions made by the ECC on oil pricing, wheat stocks, fertilisers and sugar, mostly affect consumers. Also, the controversial amendments that were made in agreements with the privatised Karachi Electric Supply Company, which were later cleared by the ECC, have been declared illegal by the parliamentary panels on the grounds that such decisions should have been made by the CCI.

In more than 70 per cent of cases that come to the ECC, the committee makes decisions in the absence of a quorum. Maintaining of the quorum is mandatory for any committee of the cabinet, or the broader parliament. During the last five years, the ECC did not put a single issue to vote for a majority decision. It was generally up to the pre-determined views of the committee’s chairperson– usually the finance minister – that would be reflected in the decision.

On the other hand, meetings of parliamentary committees cannot begin until there is a quorum. In its absence, chairpersons of the committees have to postpone proceedings for an hour and wait for the necessary number of members to show up, or else cancel the meeting. As a matter of principle, all committees of the cabinet have to follow the same procedure, even though they are not required by law to do so, observed the senior bureaucrat.

Such practices go against the wisdom of creating committees in a democratic set-up, which are tasked with examining issues quite thoroughly and in a professional manner, and then make decisions through collective wisdom.