Reforms not possible without getting rid of rent-seeking culture

Comment

LAHORE: Reforming an economy flourishing on rent-seeking culture is an uphill task as all segments of the society are tuned in to get both genuine and non-genuine jobs done through speed money.

We see in our daily life that people violate traffic rules and when caught mostly sideline the law through bribe. It is also common knowledge that when police goes in a house to investigate theft the victim becomes a provider of refreshments every time the police visit his place.

When you go to the passport office, you find that a tout outside the office can get you through all formalities with ease; otherwise it takes your whole day. You have of course to grease the palm of that tout. The entire economic system is running like that.

Businesses that pay bribe to speed up procedures pay rent to the bureaucrats and seek rent from the consumers by incorporating the bribe amount in the cost. The non-documented economy is flourishing on rent-seeking culture. In order to avoid taxes, businesses have to please the tax collectors. It is the blessing of this rent that allows people to build high-rises without an approved building plan and without paying their due taxes.

Rent seekers are so powerful that they let cars enter Pakistani roads. The industrialists involved in under-filing of production pay their rent to the relevant tax collectors as the importers do in case of under-invoicing.

The web of rent-seeking is so entrenched in our system that it is now impossible for a common man to get government service of any type without paying the due rent.

Experts say that technology could help bring transparency in government affairs.

Yes it can, but resistance adopting technology is very high. During the tenure of Musharraf, the federal government purchased software from Google that was capable of recording all customs inspections. The collector of customs could observe the entire process on his office screen and the Federal Board of Revenue (FBR) chairman also had access to this system in Islamabad.

The software effectively controlled unethical practices in imports. It also deprived the rent seekers of huge amount.

The lease of that software was not extended after successful trial without assigning a valid reason. The most plausible reason was that it hurt the interests of both importers and the clearing staff, therefore it was discarded.

The public has the right to all government services. The service providers should introduce a fair and transparent system to remove their grievances about substandard services.

There are some service providers that make a fool of the service seekers through technology. You lodge a complaint at the call centre against a malfunctioning landline or broadband connection. Your complaint is registered promptly with a complaint number, followed by a SMS that your problem would be resolved in 48 hours.

Hardly 24 hours later one receives a recorded phone call saying the complaint has been resolved, and to press 1 if that is true, or 2 if the problem persists. In 99 percent cases, the complaint is not resolved and one keeps pressing 2 waiting helplessly because one cannot talk to a recorded call.

This is the misuse of technology whereby you keep your record straight without resolving the issue.

Pakistan certainly needs use of information technology to improve transparency and speed up work. But even technology fails if the system continues to ignore compliance and those involved are not made accountable.