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Opinion

August 2, 2016

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Bridge of governance

Bridge of governance

“Brexit was undisputedly a major and unexpected event in the UK history and it sent shockwaves around the world but it will not be a blow to the British economy or its social fabric; not because it was in any way insignificant in magnitude but because the country has strong institutions and established traditions which can absorb shocks even bigger than Brexit”.

This is how my friend, who teaches at Hull University in the UK, commented on my apprehensions about the likely economic implications of Brexit on the world economy.

What could be our response to such an eventuality? In the very recent past, we went through some crises, different in form but similar in magnitude, which put our institutional capacity and credibility to test. Contrary to claims and expectations, the response from various institutions during those crises happened to be slow and sloppy. Instead of responding proactively, they reacted frantically which caused more damage than good.

For example, the government of Pakistan decided to freeze foreign currency accounts in the wake of the nuclear explosions in 1998, which was not only illegal but also detrimental to investors’ confidence.

If it was not for Saudi Arabia which intervened and offered a huge quantity of oil on deferred payments, Pakistan would have had serious problems meeting its fiscal obligations.

Similarly, the devastating earthquake in 2005, heavy floods in 2010, and the problem of IDPs have stretched our institutions to the limits.

What was common in the three major catastrophes was the inability of all relevant institutions to respond effectively and efficiently to the given situation. Lack of coordination among different government agencies, in particular, led to disproportionate allocation of resources. The bodies set up to coordinate efforts and resources such as NDMA (National Disaster Management Authority) and Nacta (National Counter Terrorism Authority) were formed only after a huge price had been paid in terms of deaths and destruction.

What makes us different from countries like the UK? We have powerful individuals and weak institutions whereas in the West it is the other way round. We glorify and idealise individuals to the extent of making them indispensible and irreplaceable. This is why we look to individuals for fixing our complex problems and keep insisting they extend their tenures and terms.

In developed countries, individuals are adored for their contribution in strengthening institutions rather than for their ability to enhance and use discretionary power. Economic development, political stability, and social harmony in the West are due to strong and credible institutions.

Developing institutions is a little like building a bridge over a river. In my village, crossing a river used to be a recurring problem during the summers. The weak and frightened had to ask for help from those who are powerful to cross over the river. Most often, a relationship with powerful individuals mattered in getting this help. After building bridges on various key points, no one now depends on others for movement between their homes and places of work.

Building and modernising institutions is undoubtedly a challenging and difficult task but it is indispensible for the stability of a country and consistency of actions. Individuals change and die but institutions endure. More importantly, decisions based on one’s discretion are prone to personal temptations and fears.

Instead of looking to one particular individual or institution to do wonders, it is necessary to build institutions at all levels and all fields to cope with unforeseen challenges in today’s fast-changing world.

The writer teaches at the Sarhad University.

Email: [email protected] edu.pk

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