The move to recruit technocrats to place the economy on the path to sustainable growth emerged in the early 1990s
rises – political or economic – are a regular phenomenon in Pakistan. Somehow every round brings forth a discussion on or demand for a technocratic government to resolve outstanding issues. This trend reflects the Establishment’s – as opposed to the people’s – lack of confidence in the political system to deliver; the question here being to deliver for whom? A few parallel questions are: who do these technocrats represent; and what are the incentives driving the individual technocrat’s policy choices.
The Establishment’s lack of confidence in the political system is as old as Pakistan. The first overt intervention against the political system was in 1958, with the military takeover by the then army chief, Gen Ayub Khan. The experiment was repeated in 1969 under Gen Yahya Khan, in 1977 under Gen Zia-ul Haq and in 1999 under Gen Pervez Musharraf. All these regimes were packed with technocrats – political and economic.
The measure of their political success or failure is a matter of historical record. The Ayub Khan regime led to a fatal widening of the schism between the West and East Pakistan, which the Yahya Khan regime consummated with the dismemberment of the country. The Zia-ul Haq regime resulted in ethnic and sectarian divisions and the Pervez Musharraf regime saw domestic terrorism rise to new heights.
The replacement of the political order with technocratic dispensations, including imposition of technocrats in political eras, has always been led by the military and grounded in the narrative of incompetence and corruption of political parties and political leaders. A move to recruit technocrats to sort out the economic mess and place the economy on the path to sustainable growth emerged in the early 1990s. A beginning was made in 1993, with the import and appointment of a retired international development bank executive, Moeen Qureshi, as prime minister. Over the last three decades, technocrat luminaries have included retired executives from international financial institutions and eminent corporate executives, industrialists, bankers, economists and educationists – as well as generals and brigadiers.
If the economy has not stabilised over the last three decades, despite over half a dozen experiments with technocratic set-ups, it raises pertinent questions over its inherent ability to deliver beyond cosmetics.
The implicit assumption, herewith, is that technocrats are benign and objective individuals and imbued with unvarnished zeal to serve the country. However, it is a moot point whether the technocrats would be beholden more to the appointing authority and to their parent organisations or to the people at large to whom they are not responsible. The answer is available in the fact that specific vested interests – the Establishment, international financial corporations and certain business groups – have benefitted enormously, while the economy has remained in a consistent state of decline. Two basic ingredients of economic stability – budget deficit and trade deficit – have continued to deteriorate and the debt balloon has continued to inflate. If the economy has not stabilised over the last three decades, despite over half a dozen experiments with technocratic set-ups, it raises pertinent questions over its inherent ability to deliver beyond cosmetics.
The incentives that drive an individual technocrat’s policymaking behaviour are defined by the performance of a particular retired international development bank executive, who was appointed de facto finance minister from November 1996 to February 1997. The economy was in dire straits at the time he took charge and foreign exchange reserves were particularly low. He instituted the usual stabilisation measures and with additional loan inflows managed to raise the reserves’ level.
Then came the test. Pakistan harvests wheat in April-June and, in 1996, was short by about 2 million tonnes, requiring imports. Domestic wheat stocks were estimated to last till January; thereafter, the market was to be supplied with imported wheat. The order for wheat import – opening of letter of credit – should have been executed in November 1996 for the wheat shipments to arrive by January 1997 to prevent a supply disruption. However, the opening of the L/C would have dented the foreign exchange reserves that had been built up to above November levels. Individual interest prevailed over the country’s interest and the necessary action was deferred.
The order for wheat import was placed by the successor government in February, with the wheat shipments scheduled to arrive in April. The country faced a stark wheat shortage over February-March, resulting in large-scale civil disturbances. The wheat harvest and the imported wheat arrived at the same time in April, crashing domestic prices and bankrupting farmers. The said technocrat, having served his contract period, departed Pakistan, leaving the political government to pick up the pieces.
The writer is an economist. He designed the BISP; was a member of the 7th and 9th National Finance Commissions and has been an advisor to Sindh chief minister for Planning and Development and an economic advisor to Balochistan chief minister