Call it the “Charter of Economy” or “national consensus on core economic agenda”; the idea to lay down a broad framework for economic reforms in this country has been floating around since 2011, when former President Zardari echoed this column’s earlier views to arrive at broad multi-party consensus on economic issues a la the Charter of Democracy.
In latest news, Finance Minister Ishaq Dar has called for the Charter of Economy before next year’s general elections. It’s another thing that much likes President Zardari, so far Dar has only been paying lip service to the idea, instead of bringing the stakeholders together on this all important agenda. This column understands that drafting a meaningful charter of economy would be a complicated affair since political parties may have different priorities for economy policies, and as such no law or charter should exist to take away their democratic right to hold independent views. Nor do the vagaries of local and global economic environment allow the fixing of economic policies across time and space.
Does this mean that thinking about a Charter of Economy is an exercise in futility? The answer is ‘no’. In today’s section, BR Research proposes the following fourteen points as an economic reform plan to safeguard the economic future of this country and its citizens.
1- Inclusiveness: That the charter will reflect the economic consensus of political parties should not prevent the forum to consult various stakeholders of the economy. These consultations should not only be confined to business chambers. It should also incorporate the voice of other important players, including farmers, labourers, technologists, and those operating in the industry of capital formation.
2- Transparency: All legislatives in the country and other elected bodies must pass ‘open-government’ laws to ensure access to information (as enshrined in the constitution of Pakistan) and transparency of economic policies and decisions across all tiers of government and their institutions. This will include, for example, matters of debt and CPEC to tax policies and tenders.
3- Governance: A list of key regulatory bodies shall be drawn up and provided a guarantee to be made strong, autonomous, and unfettered from political intervention. The latter could be achieved by appointing a strong independent board headed by a chairman who is nominated by the prime minister in consultation with the leader of opposition and confirmed by a joint parliamentary committee with 50 percent members from treasury benches and remaining 50 per cent from opposition parties.
4- Economic courts: Reforms shall also be brought about in banking courts, whereas economic/ commerce courts are to be set up having all the key elements of a good legal system. Both the regulators and members of economic courts shall meet the standard of political impartiality and judicial propriety.
5- Reforms in economic departments: The bureaucratic machinery involved in matters related to economy - especially in those related to trade, investment, tax and energy - is reformed and staffed with experts at all tiers of government whose performance is judged against a set of agreed upon KPIs.
6- Minimum framework on seven key areas: Economic priorities may differ from party to party. However, a minimum consensus should be drawn up for the following economic areas: (a) energy, (b) taxation, (c) water, (d) environment, (e) domestic savings, (f) social protection, and (g) labour. For instance, in case of energy, consensus shall be arrived at forming single integrated energy ministry. Or in the case of taxation set up a national tax agency to collect all federal and provincial taxes to be disbursed in accordance with law. Or in the case of social protection developing an integrated social protection database for various federal and provincial projects. Or in the case of labour, ensuring that labour rights are duly implemented.
7- Public sector enterprises: Privatization of public sector enterprises may not be a consensus item. However, there should at least be a consensus to duly reform the PSEs, and an agreement on quarterly reporting of operational and financial performance of all the public sector enterprises in the control of both federal and provincial governments.
8- Regionalism: The CPEC is critical for Pakistan’s growth and development. All parties should arrive at a mini-charter of CPEC in terms of what it entails, and how shall it be implemented, and in terms of the kind of information incumbent governments ought to make public to avoid conspiracies and blockades in the way of the CPEC. Liberalizing trade with India, Afghanistan and Iran should also be a part of the regional agenda.
9- Economic diplomacy: Parties develop a consensus framework to increase Pakistan’s voice and presence (even at the level of middle management staff) across various regional and multi lateral economic forums and bodies including the IMF, World Bank, BRICS Bank, ADB, and AIIB. Pakistan’s commercial consulates abroad ought to be strengthened for the promotion of trade and investment and their performance duly monitored by a multi-party oversight committee.
10- Accrual based accounting: Public finance systems at all levels of government shall transformed from cash based accounts to accrual based accounts within an agreed upon reasonable time frame.
11- Education and health emergency: Both these subjects have been devolved to the provinces. However, given their contribution to overall economic development, both federal and provincial governments should proclaim education and health emergency with parties giving commitment to achieve impact-oriented indicators in both these areas.
12- Documentation: Documentation at all levels of economy across all sectors, including real estate, must be brought about with agreed upon targets spaced over a reasonable time frame. In that vein, census and other key socio-economic surveys and estimations should be separated from politics.
13- Decentralisation/Coordination: In the spirit of the Charter of Democracy, parties must agree on real economic decentralization and pave way for smooth transfer of funds from centre to provinces, and from provinces to local governments. A framework for continuation of NFC and PFC awards ought to be agreed upon, whereas the Council of Common Interests and the Ministry of Interprovincial Coordination ought to be strengthened for improved interprovincial coordination on pressing affairs.
14- Accountability: All parties should agree on annual reporting of progress made under the Charter of Economy by the parties/coalitions that form federal and provincial governments after the signing of the said charter. This is to help ensure that the charter does not succumb to the fate of Charter of Democracy of which many items still remain an unfinished agenda.
It is hoped that these fourteen points will serve as an adequate basis of discussions and negotiations towards the successful agreement over Charter of Economy. However, while it is the job of ruling party to invite parties for negotiations over the charter, there is nothing that prevents businesses and other civil society representatives as well as political parties in opposition to raise din over the much-delayed charter and get the government rolling in that direction.