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February 16, 2019

Managing change in Pakistan

Lahore

February 16, 2019

That Pakistan needs change is undisputed. There is apparent consensus as to what should it look like—a truly democratic, prosperous, and secular state. But how can it be achieved?

The first prerequisite is re-establishing law and order for ensuring a stable society where the writ of the state is effective. Here the need is two-fold: Improving the courts and the police, which together constitute the criminal justice system. Now that Pakistan has a new Chief Justice whose interest seems to lie in improving the judicial system rather than straying into other non-judicial affairs, one can hope that the courts at least up to sessions level will start improving.

The security agencies including the Rangers etc. are there to help, but they cannot do the work for which the police are trained. To improve the policing system no great reforms are required. Essentially you need to improve the quality of manpower starting with the top most echelons.

That Pakistan needs good people in its entire civil administrative structure is the essence of the problem facing any government. It needs to be competent and neutral, not aligned to any political party or to its manifesto. How do you get that? And that is not only the core issue but also of the highest priority and very difficult.

The civil servants who run different parts of the government are required to carry out the policies of the political government in power, but they have a duty to express their professional views frankly as they are first and foremost servants of the state. In case of differences with their political bosses they should have the option to move to another post. A wise government should encourage them to give frank advice by providing them protection. There used to be a practice that in case of a disagreement between the secretary and his minister the matter used to be referred to the Prime Minister. In this context, the Prime Minister’s role is pivotal. Given the conditions on the ground he should consider that to be his foremost daily work: To find good people. The rest will follow.

Having been a contender for long in the politics of Pakistan, Mr. Khan must be seeing a lot of senior government officers as pro- this or that politician. And he may not be wrong. However, he alone can change this set-up. In the 1990s a very senior civil servant, Mr. Khalid Javed, was generally known as “Nawaz Sharif’s man”. On being made to understand that that alignment was a misperception, Benazir appointed him as Chairman WAPDA. The current PM needs to consult some of his illustrious relatives and old friends in the bureaucracy (no need to appoint them to any job) to find such good men in the civil services. And he should devote a lot of his own time to interacting with people who have made civil service as their future for life. Only then would he be able to find good people who may not agree with him on some issues, but will be sincere.

As I said earlier, finding good civil servants is the absolute essence of the problem of administering a country. That is a story quite different from that of running a hospital or a factory where the equipment is as important as the people who operate them, and then all you need are just a handful of competent doctors or engineers. In Pakistan’s private sector, procurement and marketing is hardly an issue.

Further, a political government, in power for the time being, is not the state. Hence they should consider themselves subservient to the constitution and the laws framed under it. The vision and quality of a ruler lies in the fact that he accepts this and does not go about changing a system on popular whims and without objective and open discussion.

And let it be understood that if any populist politician rides rough shod over the civil servants, it will cause further deterioration. So when a well-connected man of Pakpatan can get a senior police officer removed overnight, and the matter is forgotten after an “apology” on paper, it is the surest way to nullify all well-meaning efforts of the Prime Minister.

There is a lesson from history. The most powerful and effective rulers in the sub-continent, Ayub Khan and Indira Gandhi, were assisted by highly competent persons as principal secretaries: N.A. Farouqi and Fida Hassan in case of Ayub Khan, and Haksar and then P.N. Dhar in case of Indira.

In Pakistan, secretaries were not appointed and removed at the bid of the ministers—and the same held for Chief Secretaries and I.G.s Police in the provinces. Further, postings and transfers was a subject quite out of bounds for the politicians. Differences did arise and they were reviewed and decided by the Prime Minister who consulted his trusted secretaries who were persons of immaculate integrity.

So what is needed is a group of civil servants who have the courage of conviction and, if need be, can stand up to the Ministers. Mr. Prime Minister, you can find them if you look for them. All they need is to be protected and respected. And then they will deliver.

Now, in terms of priorities, after ensuring law and order and rebuilding a strong and independent administration, the challenge is to resuscitate the economy. As they say: Money makes the mare go!

The first requirement here is humility on the part of those trying to learn how to mange a vast thing called “national economy”. It is neither a child’s play nor is it easily understandable by someone who may have set up or managed a private enterprise, howsoever successfully. Nor does the challenge lie at the door of learned and respected professors of renowned universities. Economic theories are not in debate! How to manage the financial system is the issue. Here the absolute first requirement is to get the right information/statistics for which we must have a thorough professional and honest man to run the Statistics Division of the Federal Government.

Then comes the difficult hurdle: the fiscal deficit. As we all know it has two sides: Revenue and Expenditure. On the revenue side there is this colossal organization called the Federal Board of Revenue, and to a much lesser degree the provincial revenue collecting agencies. The FBR holds tremendous power vis a vis the moneyed class who by definition should be the main contributors to the national exchequer. FBR has to control its inspectors at the gates of factories and ports where taxes and duties are collected. It has to make sure that imported BMWs and Mercedes Benz pay the right customs duty and are not charged as Toyota Corollas. It has to ensure that Income tax is collected by the state and does not go into the pockets of the Income tax officers, etc.

This is difficult administrative work, and the challenge here is how to minimize collusion between the tax collector and the taxpayer. Rich people can buy almost everyone, including our respected people’s representatives. And people manning various parts of the FBR are also human beings tempted by standards of display and good life around them. But there are also good people in both these groups.

If you find people of integrity and competence then catching fraud and theft is possible by building systemic reporting systems whereby crosschecking is possible. This should have been done long ago by computerizing all tax collecting agencies, federal and provincial. Anyway, Pakistan has enough talent to do this technical work now.

And then how is Expenditure contributing to the fiscal deficit. The first and the most regrettable item are subsidies, by whatever name they may be classified in the official documents. Subsidy on sugar! Come on! Another large consumer item, electricity, is getting enormous subsidy (comically called Circular Debt). The subsidy is given for power losses that occur on two counts: An old and inefficient hardware, like the transformers etc. Second is theft. How much is contributed by each is not known. In any case, hardware should be upgraded at once and it is relatively easy to do. But theft—that is the real test. Can the government stop theft? Would you be able to check and control collusion between the meter readers and the ordinary consumers? Would you be able to disconnect the thieves? Would you be able to deploy police effectively in mohallahs and abadis, which may create a law and order situation if the linemen were to go to disconnect the houses/shops or an entire area? Now, who would do that work: That police officer of Pakpatan who was thrown out, or the men who got him out! A rich landlord once told me, with pride, that he never paid any electricity bills!

Similarly, why is there subsidy to the Steel Mill and the PIA and other such fancy institutions? Is there over-employment, mostly due to political favours? If so, what will you do to the surplus? Are these full of incompetent favourites? PIA had a glorious past. It set up the Malta Airlines, later it helped set up airlines in the Gulf. So what happened? Has anyone obtained the data of how many passengers travel gratis? What is the ratio of aeroplanes to employees as compared to other airlines? What is the quality of in-cabin service and level of punctuality that brings customers?

You have to get incompetent people out and replace them with individuals who together with reporting their “achievements” should be discussing their problems. Administrative management is not easy!

There are several other issues concerning controlling expenditure, but the point is that if fiscal deficit is not controlled the government will keep printing notes that will increase mehngaaee, called inflation. And that also affects our next area of concern.

That is the external balance, i.e. the gap between foreign exchange earned and spent. Taking around kashkol is ok for the moment. But the second time you go…. you know what to expect! So you have to increase exports. But how? Here the first question is: Do you have exportable surplus? Does capacity exist in the country, and if so, are they producing or shut down for want of gas or electricity. And since the population is exploding at a rate more than twice that of Bangladesh (imagine!), producing surplus for export becomes all the more difficult. Exports will not increase simply by lowering the exchange rate. So you must get investment into the country to manufacture exportable surplus. But who will bring capital in a country in turmoil! Advent of one man does not play miracles in the real world. So we are back to law and order and an efficient administrative system. Get it?

No one has urged the government to go to the International Monetary Fund (IMF), but let it be understood that it is not a sinister or devious organization. It simply asks you to buckle up and do things difficult to do (like reduction of fiscal deficit). So if you are prepared to manage your affairs efficiently and prudently you can get loans at low interest rates. Further, IMF gets your outstanding loans rescheduled, which provides relief from immediate crisis. That hardly any IMF program was completed in the past only tells the story that the present government has been telling loudly to the world: Those governments did not manage their economy well. So if you intend and think you can buckle up and do what is good for your country, IMF will be helpful. That place is manned by sensible people and not by some crazy zealots. But you have to show results.

Selling cows and motorcars of the Prime Minister’s House is the right thing. So is emphasis on having toilets at petrol stations, and cleanliness in general. But in the presence of humongous issues publicising cows and cars and urinals makes one look imbalanced.

Managing the people is the most difficult work—it is almost an art requiring a non-presumptuous eye, willing to learn rather than itching to teach. Remember Akbar the Great and his naun rattan (nine gems)! How many times have we heard of debates in cabinet meetings on administrative and policy issues? How many senior officers have disagreed with the PM and survived! Find worthy government servants and respect them, Mr. Prime Minister. That should be your only task. Then they will deliver.

There are a host of other issues. But they can be addressed only if you succeed in the agenda mentioned above.

And Mr. Khan, water is a serious and complicated matter. It needs deep study even before you begin to understand it. The former Chief Justice can now devote his time to study the Lieftinck Report of 1968, to begin with.

But hark! The government is engrossed in, and the country entertained with, chatter on corruption, NAB, JIT, ECL, etc. Billions upon billions of dollars are going to rain down on Pakistan is the wild expectation. Tell the boys to talk only when they succeed in getting convictions and the money. And not the like of conviction for having an Ikama! That makes one laugh.

What lofty words of morality and integrity were used, and what great heights were to be conquered, after the change! Only good intentions do not pave the way.

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