The growth dialogue

LAHORE: The growth paradigm adopted by this regime is more flawed than the one adopted by previous regimes. Decisions, where consultation is required are taken arbitrarily, creating unnecessary friction within society.

Pakistan is a federation, and the federal government must take all federating units in confidence before taking any decisions. The right of provinces to federal funds already mandated in the constitution cannot be usurped just to utilise those funds for federal purposes.

There has to be a dialogue with the provinces where it could be explained that their shares are needed for more important purposes as the federal government is short of resources. Legally the federal transfers to the provinces must be made after the end of each month.

The provinces plan their budgets according to the expected share from the centre, based on tax collection. The beauty of democracy is that we take decisions.

We cannot pull Pakistan out of current fragility and economic quagmire if ego has preference over dialogue. It is true that in parliamentary democracy, the party having majority is entitled to rule.

But if the voting pattern is such that collectively the opposition polled more votes than the ruling party then prudence demands that the opposition should be taken into confidence on major policies. Otherwise, friction develops between different segments of society and the provinces, which retards or slows progress.

These days, this friction is visible in the United States that is the so-called champion of democracy. It is true that Biden won more electoral and popular votes, but Trump got more popular votes than any American president who won the election.

Americans are divided, and saner elements are trying to take the entire nation along. In the United States, the American president has more power than any prime minister has in parliamentary democracy.

Still his tone after winning the election has been conciliatory. This should be the spirit of the ruling elite in Pakistan.

We cannot deliver sustainable development without understanding how effective, accountable public authority evolves through a political process of bargaining between elites, as well as between the state and organised groups in society.

We need to tackle the perverse incentives that globalisation may have created for political elites that are responsible for the fragility of our state. Almost 10 year after the 18th amendment, the federal government is genuinely concerned about certain aspects of decentralisation.

Yet it shies away from genuine dialogue with opposing political personalities that are dubbed as corrupt by the ruling elite without any judicial verdict. They are elected representatives and need to be engaged. If they have done anything wrong, they should be persecuted through court of law. Unless proven guilty and convicted there is no justification in their character assassination.

Hasty decentralisation under 18th amendment consolidated local inequalities and elite capture. There is a dire need to consider ways to strengthen the informal local institutions that work for the poor: since informal (‘traditional’) local governance institutions are persistent, influential, and very diverse.

We must find legitimate ways to help citizens engage in different dimensions of the policy process.

State planners need to be clear that not all civil society organisations contribute to the development of active citizens, and not all claims to represent the poor are legitimate.

Involving citizens in service delivery reform to improve accountability is a good approach. However, those formal participatory mechanisms can exclude the poor. It is therefore necessary to implement reforms in ways that create opportunities for collective action.

The federal government must realise that after a decade of getting lion's share from federal taxes pool the provinces would not agree to a cut in their share.

However, if the provinces are assured that their net share on average tax collection in five years would not reduce (each province would get the net amount as in previous year), they will have to reduce their share on all additional taxes that the federal government collects in the future.

It is pertinent to note that the major tax potential now is in the provinces. The tax on services comes under provincial domain.

Provinces can tax agriculture. The provinces through prudent and fair dialogue may be persuaded to let the federal government collect service tax on their behalf, and after deduction of 5-10 percent service charges the tax should be immediately transferred to each provincial exchequer.

The federal government would need the full cooperation of the provinces in eliminating corruption in the power sector. No action against power thieves would be possible until the law enforcing agencies provide full support to the staff of power distribution companies.

In fact, the provinces are provided 5-10 percent service charges on all successful raids against power theft. Sustainable development not only needs participation from all segments of society but also higher revenues.

All provinces could be brought on one page to nab all tax evaders. Dialogue on equal level would pave the way for cooperation between the federal and provincial governments.