ISLAMABAD, Aug 23: About a dozen draft pieces of legislation have been put on hold by the ministries of finance and commerce indefinitely for reasons they refuse to divulge.
Independent economists, talking to this correspondent, observed that all these proposed provisions are in public interest. They wondered what else can have greater priority than public interest?
Whatever the reason, the result of such procrastination is that the ‘good governance’ reforms in the capital market and trade - foreign and domestic - are in limbo.
For implementation of these reforms, they pointed out, the country contracted loans from Asian Development Banks, etc. Thus while the country has to service those loans, uncertainty dogs the possibility of reaping, any time soon, the vaunted benefits thereof.
For example, there already exist on the statute book two ordinances (relating to Countervailing and Safeguards) that were promulgated after the creditors’ threat to withhold payments. The draft rules required to implement these ordinances were sent by the Tariff Commission to the Commerce Ministry over a year ago, according to a source.
These pieces of legislation are direly needed to protect local industry against undue competition. In fact, Pakistan has already been at the receiving end of litigations under these WTO provisions from other countries. When it comes to applying these in the interests of its own economic interests, however, the bureaucrats, it seems, just sleep over the proposed legislation under the rug.
The draft of an ordinance intended to provide for the take- over of non-performing firms has been held up because of opposition of an industrialist within the government. He is allegedly apprehensive about the consequences for his own interests if it were promulgated.
In fact, it had been finally approved by all the agencies last April. It was about to be referred to the Cabinet when a Minister put his foot down. To give legitimacy to his opposition, a committee headed by NIT Chairman Tariq Iqbal was detailed to “further consult” various persons. The bill has yet to pass into the realm of law several months after that consultation.
The bureaucracy apparently has kept it in abeyance for several months because it is under no pressure from the outside agencies for clearing it, knowledgeable quarters believe.
Several measures prepared by the SEC in pursuance of its capital market reforms now face uncertainty. One of these concerns the NBFIs.
The decision to transfer the regulation of NBFIs from SBP to SEC with effect from July 1, 2002 was officially made public last February. The Ministry of Finance, however, has blocked its implementation by failing to process the relevant legislation.
Likewise, the SEC awaits approval of amendments it proposed in the company law a long time back, e.g: (1) formation of a single-member company; (2) reduction in minimum number of members of board of directors; (3) appeal against refusal of transfer of shares; (4) reduction of grace period for presentation of annual accounts; (5) quorum of AGM; (6) appointment of company secretary; and (7) timely liquidation.
To a large extent, a bureaucracy insider said, the problem arises from sheer incompetence. The mismatched bureaucratic functionaries have neither the capacity nor the intellectual orientation to tackle technical problems. Small wonder, a substantial part of the government budget is consumed by consultancy fees.