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May 8, 2019

The crunch


May 8, 2019

Looking at the evolving politico-economic scenario in Islamabad, the PTI’s ‘tabdeeli’ squad is not alone in being hit by changes in the ‘batting order. The country’s elite Central Superior Services -- the CSS -- too have received a double whammy. A former and a serving bureaucrat heading the State Bank and the Federal Bureau of Revenue respectively, have been thanked and replaced with experts. The move to dump generalists had started earlier with the replacement of a legislator finance minister by a technocrat. The circle is thus complete.

As the government scurries to finalize the 2019-20 budget, it is constrained by the IMF’s policy guidelines in view of the economic slowdown and a dismal state of revenue collection. We are just not paying enough taxes. Pakistan has been living beyond its means and it is time to narrow the gap between revenues and expenses. After a court order banning the collection of billions in taxes on telecommunications was lifted, raising the sales tax on POL products was too tempting to pass at a time of financial crunch.

There are lessons to be drawn from these developments. In quarters that matter, politicians were seen as failing, once again, to run the economy efficiently. Hence the reliance on technocrats to run certain key departments notably to conduct negotiations with International Financial Institutions like the IMF and the World Bank. A top figure of the ruling party was relieved from the post of finance minister. The finance adviser, in turn, may been behind the changes at the State Bank and the FBR. There are no more sacred cows left in the country. A mini-revolution, or guided democracy, you might wonder.

Those who are critical of the stranglehold of a generalist civil service on the country’s administration for over seven decades may not be unhappy over these changes. Pakistan’s engineers, economists, doctors, academics and other specialists have been groaning under the IAS/CSP/DMG/PAS tutelage, irrespective of who was in power. It is also true that the generalist cadre was not always run on merit as seen most recently under the elected governments from 2008 to 2018.

Dr Ishrat Hussain, himself a former member of the elite service, was called upon to head a commission on service reforms by Prime Minister Imran Khan soon after assuming office but not much has filtered through about the commission’s sense of direction. A recent news story had referred to the possibility of initiating specialized entrance examinations to replace the common CSS examination. Whilst we await recommendations of the Ishrat Hussain Commission, it is worth recalling that none of the previous changes in service structure has brought a more efficient and responsible civil service because, among other factors, personal likes of the rulers run supreme and merit is often ignored.

The replacement of a party stalwart by an international technocrat at the Ministry of Finance, and the appointment of an IMF official to head the State Bank can be seen as a lack of confidence in home-grown talent. There may be problems though in entrusting economic governance to the Bretton Woods specialists. They will determine policies not necessarily in public interest but to suit the mantra in Washington. The people of the country are being warned about more hardship before the economic situation gets better. This approach, however, has its political costs. That could be the reason for the PTI government seeking a three-year bailout package that should be over before the next general election.

There is an inherent flaw in the democratic form of government. So many aspirants for the top political job end up making incredible promises to the voters which amount to reinventing the wheel of governance. And lo and behold, the people are duped. Once in power, the elected rulers realize the impossibility of fulfilling their promises and end up blaming their predecessors for the messy situation of the economy et al. The PTI government is no exception as Pakistan’s economic vulnerabilities are laid bare before it one by one.

The PTI rose to office with the help of a large number of legislators who jumped ship of the old parties. Its cabinet looked like a hybrid of the PTI and the Musharraf and PPP teams. However, with the arrival of technocrats, it is looking less mainstream. The new finance czar is not answerable to the electorate. The new governor of the State Bank even less so. This naturally leads to the apprehension that fiscal measures would be ordained by the IMF and the World Bank bosses -- not a comfortable situation, to put it mildly.

While the PPP has lost many stalwarts to the PTI, the PML-N is still resisting pressure and seems ready to compose its own B Team if the party’s top leadership is consigned to jail or exile. It has shown agility by naming a second-tier team and proposing names to lead the parliamentary party and chair the Public Accounts Committee. A great deal depends on Shahbaz Sharif’s return but the die has been cast by promoting Nawaz loyalists like Shahid Khaqan Abbasi, Khawaja Asif, Ahsan Iqbal and Rana Tanveer. Ch Nisar continues to play his favourite game of hide and seek.

PTI leaders have dismissed rumours about the presidential system. The need of the hour is to make parliament more credible and prominent. That can be achieved by restoring its function of legislation and discourage the chamber’s use for slinging matches. If the two sides use the house only to malign each other, there can be no hope for improvement in the performance of our week-kneed democracy.

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