Matrix Report
As the government wades through the COVID19 induced turmoil – balancing the need to saving lives and livelihoods – it is becoming increasingly obvious that the first two years of the PTI government clearly belonged to the bureaucracy that lords over the dated and extractive Planning Commission regime. If not changed radically, development economics and governance experts fear, this is likely to dominate the remaining tenure of the PTI government. They don’t see possibilities of any substantial reform in the short term.
Let us here out two proponents of reform – Sakib Sherani and Haroon Sharif – on their expectations out of the opportunities that the corona crisis offers for revival and restructuring of Pakistan’s struggling economy. What are the opportunities and whether the government will be able to exploit them for peoples’ benefit, MATRIX MAG asked them.
Sakib Sherani
I think our governance problems will impact various government sectors, especially the health sector, coordination and planning capacities. The current crisis has exposed weaknesses within the system. Coordination between different levels of government, particularly federal and provincial, needs to be strengthened under the 18th Amendment.
As we can see, this is not a non-economic issue at all. Various issues being faced by provincial and federal governments underline that they will impact the NFC Award and economic functioning of these government.
The weakness and shortcomings of our public health sector cannot be viewed in isolation, they all depend on the economy. The shortcomings of the health sector have stand exposed as we have not invested in it in years, we do not have critical care hospitals or sufficient doctors. We need to rectify this.
Another opportunity in front of us is related to data governance. We should focus on it as there was an issue of contact-tracing and identifying clusters. By using technology, we can fight COVID-19 in a better manner. We should not be limited to the challenge of digitalization. Its spillovers or externalities is spread throughout our economy and society. We should strengthen the architecture of data governance in terms of collecting data and how we utilize this platform.
A small example related to this is that only 30-40% of our economy is documented. If we are not aware of the information about our small and medium enterprises, how will the government help these businesses. A direct benefit will be by registering and digitalizing these businesses.
In my opinion, the government is not paying attention to the way taxes are collected and used. Nor it is using the constitutional platforms such as the Council of Common Interests (CCI), or the Inter Provincial Coordination Division.
I do see some hope in the third element in which the government was taking initiative towards digitalization before this war and they brought in a high profile resource person for it.
Haroon Sharif
The top priority hurdle is the mindset at the technocratic and bureaucratic level. It is not ready to facilitate the private sector. Secondly, the nature of our policy making institutions is geared towards patronage and extraction and not towards facilitation.
To change this we need drastic structural changes where we need to increase the use of technology. To head towards the future the requirement is to fix our preference of economy and wherever we have a competitive advantage we should develop those areas and give incentives to those.
Right now it is in a reactive mode, therefore our technocratic and bureaucratic colleagues are focusing mostly on collecting funds – donations and loans. The moment donors step in, our bureaucrats hand over decision-making and prioritization to these international firms and donors. This is dangerous because we are in need of indigenous and independent thinking and we need to engage with the private sector so that collectively we can create a strategy which will prove to be beneficial for Pakistan.
Thirdly, perception of institutions such as FBR. No businessman wants to visit that institution happily. Most of them privately talk of harassment and high-handed tactics by FBR are not ready to go public about this because of the nature of interaction and for fear of reprisal by officials.
Fourth, the transaction cost in Pakistan is very high and it can have a negative impact on their business. The solution, in my opinion, lies in creating a group of independent professionals because the government is focusing on dealing with the pandemic. That group should be empowered to provide guidance if we want to revive and grow on solid footings. It should be insulated from the influence of the bureaucracy.
It takes a long time to reform bureaucracy but minor steps can be taken to revive and strengthen sectors like agriculture-based food and surgical and medical equipment whose demand has increased because of the pandemic.
We can work towards its exports. Since remote working has increased we can also focus on more vigorously introducing IT products. We have a natural competitive advantage here.
But the current state of our bureaucracy does not promise much. This can be done with the help of experts from the private sector. This is a political decision because the bureaucracy will always react strongly towards it. We have to build a consensus among political groups, power groups, media and private sector. To convene that consensus we need institutions and people who can rise from their level and bring people to the table independently. But based on what we see at the moment, I don’t foresee major reforms happening in the short term . It is unfortunate for Pakistan unless external players such as China start demanding to quickly and effectively reform these institutions quickly. I don’t see that demand internally in political powers.
