A drive against corruption

WHAT has turned corruption into such an intractable problem for Pakistan? As I suggested in the two articles that appeared in this space last week, corruption has struck deep roots into Pakistan’s soil. This is essentially for three reasons.

One, some forms of corruption are sanctioned — even encouraged - by our culture. Practices and beliefs that are part of the culture also fertilize the soil in which the plant of corruption has become sturdy and strong.

Two, the expansion of the government — especially since Zulfikar Ali Bhutto’s ill-advised programme of nationalization — has brought the state very close to a large number of people. But the increase in the size of the government has meant an increase in the power of the civil service which has been exercised within weak and constantly weakening legal and judicial systems. Without much fear of accountability, civil servants often collect heavy rents from the citizens they are meant to help.

Three, even though the state has become strong, its functionaries are poorly compensated. Those who can compensate themselves by exacting bribes from the people they serve did so mostly unchecked. Unfortunately the number of public servants who have taken this route to increase their compensation has multiplied over the years.

What can and needs to be done to reverse this trend, to bring honesty back into the dealings between the citizens and the functionaries of the state, to establish a tradition of service in which rewards are available only by way of the legitimate compensation offered by the state? By far the most important answer to this set of questions is a simple one. Only a sustained effort that has the full support of the people will succeed in improving the quality of governance in the country and controlling civil service corruption.

In spite of the numerous attempts to control corruption over the past several decades, its prevalence has increased over time. Consequently, by the mid-1990s, according to one measure, Pakistan was the most corrupt country in the world. There was a slight improvement on that score in recent times, but it was not significant enough to put Pakistan back on the map of global investors. Without large amounts of foreign capital flows, the country will not be able to increase its rate of economic growth. And, for as long as the country’s reputation does not improve measurably, foreign capital will remain shy. Pakistan desperately needs foreign capital flows to revive its economy and to integrate it better into the global economic system.

To improve the government’s working, what is required is a programme that deals not only with the most visible part of the problem posed by deep and widespread corruption. What is also needed is a comprehensive and sustained effort that tackles the circumstances that created the phenomenon in the first place. In the past, regime after regime addressed the problem by firing the civil servants who were known to be corrupt or by dismissing the administrations that gained the reputation for corrupt behaviour. These actions were prompted mostly by public pressure. However, most lacked resolve.

To return to my earlier metaphor, these attempts were in the nature of cutting the tree without taking out the roots and without stopping to fertilize the soil. We should not be surprised if the tree grew back once again with an even stronger trunk and with a great number of branches supporting a rich foliage. Instead of these ad hoc approaches, what the persistent problem of corruption demands is a well thought-out programme that gets firmly embedded in the country’s reformed legal and judicial systems. Such a programme should, at least, aim to achieve two results: create an accountability system that is firmly rooted in the legal system; and establish a smaller public sector that pays its workers reasonable monetary compensation.

Before going on to discuss these two aspects of the solution to the problem of corruption, I would like to emphasize one thing about the accountability programme being currently implemented. The government of General Pervez Musharraf is the first administration in Pakistan’s 55-year long history that has shown patience and persistence in dealing with public sector corruption. Unfortunately, its efforts have not been fully recognized and appreciated. This is partly because of some mistakes that were made by the government when it started on this course. These mistakes deflected attention from the objectives that were being sought by those responsible for implementing the programme.

The military government concentrated its attention initially on punishing those who had committed egregious acts of corruption in the past. It built on the system established by the interim government headed by Prime Minister Meraj Khalid in 1996-97. The interim government’s Ehtesab Commission, already metamorphosed by the administration of Prime Minister Nawaz Sharif, became the National Accountability Bureau - the NAB. According to a recent World Bank report, the NAB “successfully prosecuted a large number of high government officials, politicians, senior military officers and major tax and loan defaulters.” The NAB was made responsible for investigating cases of corruption as well as prosecuting the corrupt. In 2001-2002, in the investigative area, the Bureau was authorized to pursue 1,060 cases of which 372 were completed and 80 were closed. In the area of prosecution, the Bureau filed 397 cases in the courts of which 198 were decided. Among the decided cases, 169 convictions were received while 23 charged persons were acquitted. At 85 per cent, the rate of conviction was very high. At the moment, 199 cases are in progress in the courts.

The Bureau’s programme also resulted in significant financial rewards for the government. In the report I have already cited, the World Bank estimates that the NAB has collected a total of $1.5 billion from the people it investigated and who were told by the courts to make financial settlement with the government. This amount is equivalent to 2.4 per cent of Pakistan’s gross domestic product. It is more than the entire expenditure by the government in one year in the important sectors of education and health. The programme, in other words, has already yielded a significant financial return.

The NAB, under General Musharraf, has fulfilled one important condition of success of anti-corruption efforts - sustainability. Let us compare the NAB’s performance with that of the earlier Ehtesab Commission. To do this I turn to another World Bank report on Pakistan. According to this, “the Ehtesab Commission was established in November 1996, amidst dissatisfaction with the effectiveness of existing institutions and was charged with ensuring accountability of public officials for wrongdoing.

In the first half year this body worked effectively and, as envisaged, referred some 64 cases to the High Court for trial on suspected misconduct. With the establishment of the Ehtesab Bureau (attached to the prime minister’s office) and the removal of the Ehtesab Commission’s investigating authority, its usefulness was drastically reduced. In the following half year, only four cases were referred.”

The politicization of the Bureau under Senator Saifur Rahman, a close associate and protege of Prime Minister Nawaz Sharif, brought the entire effort to discredit and disrepute. It was on this weakened foundation that the government of General Musharraf went about building a new structure. Its original approach, although well meaning, resulted in several missteps. I will mention two of them.

The first misstep was the draconian quasi-legal framework within which the reconstituted National Accountability Bureau was required to work. Extreme zealousness on the part of the Bureau’s first set of leaders resulted in considerable harassment, particularly of businessmen. This was the first time that an anti-corruption programme was being directed at the business community. This was a mistake since all economic activity is supposed to be governed by laws and regulations that define the space within which businesses operate. If this space has been breached, the existing legal and regulatory framework needs to be strengthened.

By using an accountability bureau to cover many segments of the population, and not just the members of the civil service, the Musharraf government not only stretched its efforts very thin. It also created a great sense of insecurity and uncertainty among the business people as to exactly which set of laws pertained to them. Investors abhor uncertainty. The NAB’s effort contributed to souring the investment climate.

The other mistake was — and continues to be — the exclusion of one set of public servants from the NAB’s reach. With a couple of exceptions, defence personnel were spared examination on the ground that they had their own rigorous system of accountability. But so do the bankers and the business community. Their activities are also governed by numerous laws and regulations. If these laws and regulations don’t discourage corporate corruption then they need to be strengthened. Confusion results — and has resulted — by adding another layer of accountability to the system.

My suggestion, therefore, is that the NAB should be concerned only with public servants - members of the civil service and elected public officials.

I will now deal briefly with the other aspect of broad systemic change needed to help contain corruption by public servants. Pakistan pays its civil service poorly while the burden placed on it continues to increase. In many cases - especially for senior civil servants - the total remuneration hides a number of subsidies. In 1998, a grade-22 official received a monthly compensation of Rs 100,200 of which the basic pay, at Rs 17,000, was a small amount. Housing at Rs 30,000 was the largest component of the compensation package. One-fourth of the compensation came in the form of transport - the use of a car, a driver, petrol and vehicle maintenance.

A rational system would pay a senior civil servant close to the top salaries in the private sector and the bulk of the compensation would be in the form of salary. In 2002, a grade-22 official should receive about Rs 500,000 from which he (or she) should pay for housing, transport, telephone and some contribution to a pension fund. However, salaries at that scale can only be accommodated if the size of the civil service is reduced quite significantly. This needs to be done at all the levels at which the government is operating - federal, provincial and district.

Civil service reform has received a fair amount of attention by the Musharraf government. It needs to ensure that the government that takes office after the elections in October continues to pursue that effort. The NAB by itself will not deliver Pakistan from public sector corruption. A much broader approach is required, including scaling down the size of the government and significantly improving the level of compensation for those who work for it.

Parliamentary or presidential?

FIFTY-FIVE years after independence we are still putting together the ingredients of the structure of a federal parliamentary system to suit our requirements.

The constitutional amendment proposals announced by the government for public debate amount to stirring the old pot. The proposals sideline the existing patterns of the parliamentary forms in the world and drift the system closer to the Presidential form under one guise or the other.

Ours is a federal parliamentary system of government. Of the eight largest countries of the world seven are organized on a federal basis. These are Argentina, Australia, Brazil, Canada, India, Russia and the US (presidential system). Federal states also include Austria, Germany, Malaysia, Mexico, Nigeria, and Venezuela. The principal agencies of the federal governments are bi-cameral legislature composed of a national council representing the people directly and a council of states representing the constituent members as entities and an apex court as guardian of the basic law.

While the lower houses of all federal parliaments are elected under the direct adult franchise or proportional system (Germany) there exist variations in the mode of election and pattern of allocation of seats to the federating units in the upper houses.

The term of lower houses of Argentina, Australia, Germany, Malaysia and Russian federation is four years while that of Canada and India is five years each. The house of representatives of Australia is elected after three years. In Britain the term of the House of Commons is five years. But counting from the year 1900 to 2001 the average term of the house works out to almost four years. This is despite the fact that the houses in both world wars extended their terms.

The reduction of term of our national assembly from five to four years is a peripheral issue that in no way dents the fundamental constitutional structure of the country. It will in many ways strengthen the base of democracy in the country. The reduced term would mean more democracy as rotation of elections will help weed out corruption from the political system.

The term of the upper house in four of the eight countries under focus is six years. These are Argentina, Australia, Austria and India. It is four years in Russia, three years in Malaysia and till the age of 75 years of a nominated senator in Canada. In view of the specific role of the upper house in a federation the present term of six years of the senate is more in line with the pattern in most of the federal parliamentary systems and their requirements.

It is the proposed powers of the president relating to the appointment and removal of the prime minister, dissolution of the national assembly, appointments of services chiefs and provincial governors in his discretion that are more crucial in nature. These proposals are central to the scheme of things. Arming the president with these powers will in all probability tilt the constitutional structure closer to the presidential system than the federal parliamentary form.

President General Musharraf in his July 12, 2002 address to the nation appeared to concede some ground in the proposed mode of the appointment of the prime minister and dismissal of the assembly. He was of the view that the provision of Article 58-2b has failed in the past to achieve its desired objective of stabilizing the political system and proposed an institutional check in the shape of National Security Council to ensure a balance among the power brokers.

The constitutions of all these countries provide that the leader of the party with the most seats in the lower house will become the prime minister of the country. We will be less than fair to the leader of a political party bagging the largest number of seats in the national assembly not to invite him to form the government.

As in other federal parliamentary governments including our neighbouring country the president should be empowered to dissolve the national assembly on the advice of the prime minister. On no account he should dissolve the assembly for the second time on the same ground. Dismissal of governments and national assembly in the recent past has been more out of personal feuds between the presidents and prime ministers stemming from wrangling on the exercise of powers.

Ever since the creation of the country except for the Quaid-i-Azam Muhammad Ali Jinnah and Ch. Fazal Elahi all other heads of the state were serving or retired army and civil bureaucrats. By dint of their training they were misfits in their political roles. Showing lack of tolerance they vented ire on hurting the system. One or two of them made dissolution of assemblies as their full-time job.

Contrary to parliamentary norms our presidents have been reading their own speeches on the eve of annual opening of the parliament. In practice the head of state in a parliamentary system reads out his address prepared for him by the government of the day outlining its next year’s legislative and development agenda. The Queen of Britain is given a copy of a printed speech in the presence of members of the two houses at the state opening of the parliament. In our case General Ziaul Haq and Mr Ghulam Ishaq Khan chose even to criticize the government in their speeches.

The concept of checks and balances being so vociferously propounded as a recipe for bringing about peaceful co-existence between the president and the prime minister is largely misplaced. This concept is more central to the presidential form of the government than to a parliamentary system. In the presidential system a directly elected president represents the executive wing of the government. The president as the executive head does not sit in the parliament.

In a parliamentary system there is fusion of the legislative and the executive branches of the government. The parliament through various methods including the question hour, adjournment motions and even vote of no-confidence against the government exercises control over the executive branch of the government.

The head of the state generally elected indirectly enjoys only limited powers in the parliamentary system and acts on the advice of the prime minister. The presidents may enjoy powers to dissolve the lower houses or even both houses of parliament but these powers are invariably exercised on the advice of their ministers.

In Australia the governor-general may simultaneously dissolve both houses of parliament under certain specified conditions. In India the president can do nothing contrary to the advice of his ministers nor can he do anything without their advice. He can dismiss parliaments only on the advice of the prime minister. He has not tried his hand against a prime minister enjoying confidence of the lower house. In Canada the governor-general invariably acts on the advice of the prime minister. The most famous example occurred when the governor-general refused prime minister’s request to dissolve the parliament in 1926. In Germany the president may dissolve the lower house of the parliament on the advice of the chancellor.

Our prime ministers may have been inept, inefficient and even corrupt but their dismissals at the hands of the presidents were not in line with the parliamentary systems. The prime ministers also functioned under the looming threats of vote of no confidence from the uncompromising opposition parties and none of them completed their full constitutional term in the history of the country. All of them were not inept or corrupt.

To bring about stability to the political system there is need to institutionalize and strengthen the role of the parliament over the executive branch of the government including the prime minister and his cabinet ministers. The prime minister needs to be protected from the blackmailing of the members of the assembly of his party by floor crossings. The opposition should also be well advised to allow the government to run its term of office. The president should leave the prime minister alone and give him long rope to hang himself if he so desires. The prime minister on his part should regularly attend the proceedings of the assembly and reply to questions in the house at least twice a week. A directly elected prime minister as representative of the people enjoying full executive powers and an indirectly elected president as constitutional head makes a federal parliamentary system. Anything different may be anything but will not be federal parliamentary system that we claim.

Mass education, not graduates

“I DIDN’t allow college to interfere with my education.” I have put the sentence in quotation marks because I read it somewhere and there is an Oscar Wilde touch about it.

On the other hand, college was very much a part of my education, not the classrooms and the degree that I got, but the opportunities it provided to me in an environment of learning, beyond the textbooks that I could have read sitting at home but among persons of different backgrounds, interacting with them.

However, it did not qualify me to be a better journalist, which I am or would have qualified me to be a better politician if, perchance, I had gone off the rails and wanted to be one.

This column is not about the graduate conditionality to become a member of the national or provincial assembly. About that I have no opinion, for I have become so cynical that I feel, that one way or the other, it will make no difference.

We have had a wide variety of political systems, racked our brains to find one that suits “the genius of our people.” A wonderful phrase that is in an Alice in Wonderland sort of way, a put-down of the people.

“When I use a word,” Humpty Dumpty said in a rather scornful tone, “it means just what I choose it to mean — neither more nor less.” Or even better, “madly squeeze a right-hand foot into a left-hand shoes.”

Which is why, all these varieties of political systems were adamantly democratic.

The perception is that a graduate is a better educated person than one who is not, that a degree bestows added-value. This is a falsehood that masquerades as a self-evident truth. I don’t know whether it still applies but when I worked for PIA, for almost all non-technical jobs, the minimum educational qualification needed was graduate.

I sat on numerous interview boards and all candidates claimed to be graduate and had certificates to prove it. Many applicants had a post-graduate degree. An essential part of the interview was general knowledge. And we asked simple questions, ones that I would have been able to answer when I was a school boy, like, what was the capital of France and even, what was the name of Pakistan’s first prime minister. The answers were staggering and in popular parlance, would be called ‘howlers.’ It was appalling that these were graduates.

To get even primary education in Pakistan was something special but for someone to have gone to college, irrespective of his financial circumstances, made him or her a member of an elite class.

Yet, so many of them had come out of colleges, empty-handed, as it were. As was explained to me, a college education was necessary for getting a job — it had nothing to do with learning. This is, of course, a generalization and there are notable exceptions. What I am trying to convey is that it should be the other way round. A college degree, on its own, is a piece of paper and such is the job-market, there are taxi-drivers and waiters who have it. I am told that there are even loaders at the airport who are graduates.

As is obvious, the emphasis should be on mass education and, as is equally obvious, it is not there. When I used to look at the PM’s Secretariat in Islamabad or at the terminal building at Jinnah Airport in Karachi, a quick calculation would show that the money spent in building them could have financed the building of hundreds of schools. But money is not a constraint; it is not what is holding back mass education. Mass education would mean taking the people out of darkness; it would mean empowering them and that’s self-defeating politics!

Those who play the stock market pay close attention to shares, as they go up and down. Those who play the ‘education market’ will know that it has remained steady with its zero growth. The literacy rate in Pakistan has remained amongst the lowest in the world. Even Uganda, and I don’t say this disparagingly, has leapt ahead. Show me a political manifesto that has not promised to litter the countryside with green gardens of education and this applies to every regime that has led us, in whatever garb. Mass education is a high priority, in theory.

In practice, it has no priority whatsoever. It would seem that the only way to safeguard the status quo is to keep the people poor and illiterate.

Even more shameful than the Meerwala Jatoi gang-rape is the decision of the victim Mukhtaran Bibi to set up a girls’ school, a mosque and a seminary with the money she has received from the government and the NGOs. Shameful, because she has administered a stinging slap on the face of all those who strut about on the political stage in the hope that they may be mistaken for caring leaders.

There is rich symbolism in her act. Is she trying to tell us that the gang-rape might not have occurred had the people in her village been educated? Or those who were silent witnesses as she walked naked might have been moved to action had they had the blessings of an education? I know that I felt a sense of shame when I first read of the gang-rape.

And a double shame when she decided what she wanted to do with the money. Surely, we should read the message she is sending out.

Instead of a graduate qualification to contest the elections, why not a pledge from every candidate, backed up by a bank guarantee, that if he or she is elected, he or she will build a school?

Not a promise but a commitment. There is no better way of making the political hopefuls aware that there is a social agenda waiting to be addressed. The elected members of our assemblies should be told that there is no such thing as a free lunch.

It wouldn’t be a bad idea at all if Mukhtaran Bibi were to be elected to either the provincial or national assembly. She could become a spokesperson for all victims of social crimes, the gang-rape being only one pebble in a well pebbled society.

Imperatives of higher growth

[This is the second and concluding part of Shahid Kardar’s article on economic recovery which appeared in yesterday’s issue.]

CAN we afford to forget the past? One school of thought, led by the IMF, would argue that our past experience would suggest that the fiscal stabilization that has been achieved at a huge cost continues to be precariously placed and fragile in terms of sustainability. We all tend to glorify anything classified as ‘development expenditure’.

But it is these very development expenditures that resulted in the construction of buildings for schools and basic health units in rural areas. These now serve as shelter for cattle, ‘autaqs’ (parlours) of waderas, godowns for wheat procured by the government, etc. We also take pride in the creation or acquisition of assets for loss-making enterprises like the Karachi Steel Mill, Wapda, KESC, PIA, etc., that we are now meant to be privatized and we are begging foreigners to buy these.

We, therefore, need to stop the government from reckless spending. We should not give it the licence to spend. We have reached these dire straits of a huge debt burden because of unfettered profligacy of the government. We should be demanding responsible fiscal management. We should not sacrifice long-term gains for short-term benefits, although the efficiency with which the government provides and operates public goods and services is important.

Whereas the proponents of this view seem to have a strong case, we need to ask ourselves two basic questions. Just because successive governments made bad investments in the past, does it mean these are no pressing projects and long-term development goals and programmes that need to be pursued now as a matter of priority? If the project selection process and criteria can be improved, surely there is a fairly large portfolio of schemes to undertake to address the basic and critical infrastructural shortages of the economy. This, in turn, can help stimulate economic activity in general (and through the private sector in particular).

Second, what good is the foreign exchange reserves of $6 billion if none of this money can be utilized to meet these needs, even when such investments will furnish assured returns by way of direct or indirect revenues for the government? It will also generate additional employment opportunities and raise the country’s national income. The government seems to have adopted a theological position that the higher the level of foreign exchange the better it would be for the economy. In other words, holding foreign exchange is an end itself and other possible uses of this money should not be a consideration. It is as if these reserves are not being built up to benefit the country and its citizens (by lifting the economy from the doldrums it finds itself in through increased developmental activity and thereby initiating a revival) but for assuring external investors that these holdings provide an element of safety and security for their investments and deposits.

To go back to the central theme of this article — that the problem of reviving the economy is inextricably linked to the structural features of the economy — a critical constraint has been the sequencing of government policy that impacted upon the pattern of industrialization which now requires more time to adjust to changing realities of globalization.

If this writer were to pick on the errors of omission and commission of reforms since the eighties, the decision to deregulate industrial licensing and investment procedures before trade liberalization (the sugar industry and the motor car assembling operations being two of such cases in point) and withdrawal of import subsidies (e.g., the provision of subsidized cotton to the yarn manufacturing sector until the first half of 1990s) were two instances of wrong sequencing.

The result was that a major portion of industry continued to focus on the domestic market, which had been kept artificially buoyant, when necessary, by the state stepping in through protective measures or other assistance under what later came to be known as the ‘SRO culture’.

Such is the weakness of closed economies. Growth is neither influenced by, nor is it predicated upon international comparative advantage. Therefore, all kinds of industries operating with varying degrees of efficiency and inefficiency flourished (the sugar industry and the motor car assemblers and their inability to compete internationally being glaring examples of the distortions created by such a policy).

The crisis of the industrial structure today is an outcome of this piecemeal opening up of the trading sector followed by too rapid an adjustment when this sector was actually liberalized, not giving industry adequate time to adjust to this change. Therefore, the worse is yet to come, as tariffs, under IMF tutelage, have been lowered further. Unless the phasing of this lowering of protection is slowed down, something which the donors, or for that matter the WTO, will not permit, the fall in fortunes of industry will continue to be uncertain in the near future.

Much of the industrial boom in the late eighties and the first half of the nineties was financed by government-owned financial institutions; they played a principal role in the development of what now constitutes industrial sickness, since the financial viability of a large part of the textile manufacturing sector had depended on government policies. When the demand for credit was soaring and credit was scarce, banks naturally preferred to lend to the old, large and established enterprises or groups — a rational approach for large, risk-averse providers of finance.

What was also critical in this was the huge reliance on debt finance rather than on equity. Whereas total equity investment in the economy is substantial, most of it has been made in small and medium enterprises by their owners, who, for a variety of reasons, are unable to obtain risk capital. The result was predictable. The taxation structure, the procedures and institutional arrangements for revenue collection and other regulatory frameworks set up by the government encouraged entrepreneurs to remain small. They invested a lot of effort and resources to avoid the taxman, and were thereby partly unable to invest in technological development.

The fear in the ability of the taxman to close down and ruin businesses is a numbing one for entrepreneurs — a feeling difficult to explain. They bribe him to avoid being included in the tax net. Thus, the link between the government’s chronic budget deficits and the intense dislike and fear of new or even foreign investors (irrespective of the official rhetoric on the subject) in the minds of key actors is on account of such a financial system.

In this writer’s view some of the solutions to the apparently intractable problems lie outside the realm of macro-economic policy being guided by the IMF. It is the political, social and legal ground rules governing production, exchange and distribution, say, those pertaining to property rights, contract enforcement of laws, norms and conventions, non-arbitrary taxation, impartial, consistent and predictable enforcement of law, that are more important because they affect efficiency and reduce the uncertainty inherent in any investment decision.

When we review government behaviour over several years we find that entrepreneurs have ample reason for doubting the credibility of its committing to a policy framework for a prolonged period. On several occasions policies have changed after some players have made investments, i.e., after the initial investment has been locked in. Such behaviour works to the disadvantage of the first investor/mover, so that after some initial hiccups and losses there will be no first-movers and there is little, if any, investment in highly regulated sectors and in those areas where heavy resources have to be committed.

Inextricably tied to government policies are procedural hindrances, inability of the state to take on vested interest groups, weak institutional arrangements for accountability, poor participatory mechanisms for policy formulation and implementation (decisions are made in an ad-hoc fashion with limited participation of stakeholders), mistrust of market forces and poor dissemination of information on government policies and operational procedures.

The most formidable enemy of the private sector, which under current wisdom is supposed to become the engine of growth, is the tax structure and the related systems and procedures, partly because there are times that the official, without any fear of being held accountable for his highhanded behaviour, openly violates internally issued interpretations of laws and rules or simply refuses to accept rulings of superior courts on the subject. The revenue authorities perceive all private entrepreneurs as thieves and tax evaders and treat them shabbily. Businessmen, on the other hand, are convinced that they will never make money unless they cheat on their taxes. The distrust of one party feeds on the suspicion of the other, with the outcome becoming a self-fulfilling prophecy.

Addressing these issues requires a major reorganization of the state and the attitude and behaviour, of the bureaucracy and the political leadership. It is the mindset of the bureaucracy that is the biggest hurdle. And unless these issues are addressed in a serious manner, the best macro-economic policy will only have a limited impact on industrial growth. In the medium to long term there is no alternative to greater competitiveness of our exports except through wide-ranging structural reforms and their positive impact on productivity.