World Bank's advice on reforms
The World Bank has reportedly advised Pakistan to give priority to its key recommendations aimed at improving governance. The focus is on enhancing the capacity of the three tiers of the government for sustained economic growth and poverty reduction. The areas identified are devolution, reforms in the Central Board of Revenue, Central Directorate of National Savings and Civil Service.
The recommendations also include much delayed privatization of the KESC and Wapda living on official subsidies that would have otherwise gone into the social sector, including education and health. That the World Bank is attaching so much importance to these reforms is also evident from the fact that a total of its five teams of experts will be here by the end of this month to review the bank-aided projects and assess the future financial and technical requirements.
The ongoing reforms in the CBR are vital to maintain a reasonable rate of growth in tax revenue to contain fiscal deficit, which otherwise may widen as a result of the freezing of petrol prices and subsidies on imported wheat and fertilizer. An expanding fiscal space is also required to fund growing public spending for social and physical infrastructure. Similarly, the CDNS has to be reorganized on a priority basis to invest more productively the national savings and increasing unfunded pensions through market mechanism in order to reduce the government's liabilities.
No less important is the devolution issue which the World Bank thinks needs to be given priority to make the government more responsive to public concerns. For example, in Sindh as emphasized at a recent seminar organized by the World Bank, devolution at the district level remains incomplete without fiscal and administrative autonomy.
The districts are not empowered to make their own budgets. Both the districts and the provinces are heavily dependent on circuitous transfer of funds which results in inefficiencies and overspending. Senior officials in the districts are not accountable to the local representatives. More than half the annual district budgets are usually under effective control of the provincial and federal governments.
The collection and distribution of taxes are overcentralized and the provincial and district governments are not accountable to the taxpayers as is the case in most democracies. The sixth National Finance Commission Award has been delayed by about two years. The prime minister's adviser on finance has promised that NFC deliberations would be resumed after Eid from where these had been suspended for want of a consensus. It is time all relevant parties worked in a spirit of give and take to finalize the award before the next national budget comes along.
As for improvement in the federal government performance, a World Bank-funded project is already under implementation for upgrading the management skills of around 250 civil servants along with the establishment of a state-of-the-art National School of Public Policy. But as advised by the World Bank, the government needs to create what it calls the National Executive Service.
Perhaps the government's failure to improve the efficiency of management is particularly pronounced in the case of Wapda and the KESC for not preparing these utilities for privatization. It is cheap energy that fuels industrialization and the sooner the utilities are sold the better it would be for the national economy.
Perilous mission
Only Mr Tony Blair could have done this, for the British prime minister is once again keen to lighten America's burden and share the consequences, even if this means getting Britons killed. Desperate at mounting American casualties as Nov 2 presidential polls near, the Republican administration would like nothing better than to see body bags go to Britain instead of coming to America. Till now the British have been operating in the relative safety of Basra in Iraq.
In sharp contrast, the Americans have been hopelessly bogged down in the so-called Sunni triangle. In the Shia south, the British have been able to keep the area relatively quiet. They have suffered fewer casualties, and their handling of the situation has shown that they are armed with the experience which European colonial powers generally have in dealing with "natives". In any case, this is not the first time that British troops are operating in Iraq. Immediately after the defeat of the Ottoman Empire in World War I, Iraq fell to Britain's lot as a League of Nations "mandate".
There Britain planted a Hashemite prince as Iraq's king, and used force, including the use of chemical weapons, to crush local revolts. Now British troops are again in Iraq, this time charged with the task of helping America, which has so far lost over 1,000 troops there. This has become a big issue in the American presidential election, for there is no sign yet that the resistance will weaken soon and the US-led forces will withdraw after handing over power to an elected Iraqi government.
The British troops would be moving closer to Baghdad and operating in the Babil area. This would enable the American high command to use soldiers from the Babil area for a major offensive on Fallujah. Will this end the insurgency for good and enable the British to go back to Basra, and possibly home? The truth is that force will be counter-productive, for only a political settlement can restore peace in Iraq. Of this there is no possibility yet. Which means that the British, too, will suffer casualties and not just the Americans.
Unnecessary and extravagant
Reports that Prime Minister Shaukat Aziz will embark on a three-nation - Bangladesh, Nepal and Bhutan - tour on Monday accompanied by a large entourage of 60 persons are disquieting. The tour is the first part of customary visits to Saarc countries by outgoing chairmen of the South Asian regional grouping, and as such the current trip will not be a state visit to these countries by the prime minister of Pakistan.
Little bilateral business, if any, is expected to be conducted in the course of the tour and certainly no agreements are expected to be signed. Hence no plausible justification can be found for such a large team travelling with the PM at state expense. Besides causing embarrassment to the host countries, the move will, more importantly, be seen by many as negating the government's claim of setting an example of financial prudence and good governance.
On the contrary, it may also be seen as political appeasement for those accompanying MPs whom the ruling party had bypassed while doling out ministerial positions to aspirants to form the largest federal cabinet ever. The PM plans to visit India, Sri Lanka and the Maldives later in a similar capacity but hopefully with not such a large entourage.
Previous PMs also indulged in similar practices. It is ill-advised moves such as this one that have made the public sceptical of successive governments' claims to austerity. The present one seems to be making no break from the traditions of extravagance set by one government after another. The mustering of outsize delegations for foreign trips and the use of special planes are all a burden on the exchequer that, in most cases, cannot be accounted for in terms of concrete results.