A fresh strategy for development

Development of a country is a very complex process and it is unfortunate that while most of the countries in the region have been enjoying prolonged periods of high growth and increasing prosperity, Pakistan has been left far behind to suffer the consequences of stagnation in per capita income, increasing unemployment and high inflation.
Concerned with this dismal situation, the Planning Commission of the country, supposedly the highest economic policy organ of the state, has presented an outline, titled as the "economic growth and reforms strategy" to project its fresh thinking on the subject. After establishing that economic growth in Pakistan has been both volatile and falling, the outline asserts that under the current strategy, projects continue to be multiplied with no available resources while there is a lack of structural reforms and sector picking. As far as the PSDP is concerned, its size is decreasing, project governance is weak, money spread is thinning and there is a high share of brick and mortar. Shift to a new strategy is required because the labour force is expected to grow at an annual rate of 3.6 percent and a GDP growth in excess of 8 percent was required to absorb this incremental labour.
Approach to a new strategy, according to the Planning Commission, should be consensus-driven, based on home-grown ideas and be able to achieve a balance between physical capital, human capital and social capital. It should also serve as a vehicle to utilise existing capacity, ensure macroeconomic stability and remove major constraints like energy shortages. Long-term growth strategy would require responsible fiscal and monetary policies, restructuring of PSEs and rationalisation of PSDP. While these policies would ensure economic discipline, productivity in the economy would be enhanced through a potential governance agenda, market reforms, youth and community engagement and reforms in the areas of urban management and connectivity. The way forward also includes new urban/provincial development strategies and a national growth strategy covering the period 2011-16.
Although we don't have the detailed road map or full information about the proposed strategy, yet the outline of the Planning Commission seems to reflect a high degree of skill but does not take into account the limitations of the present system and, as such, lacks realism to a large extent.
Designed as a think-tank for guidance and the main leader in economic policy formulation of the country, the Planning Commission, over the years, has largely been relegated to an auxiliary institution and lost much of its influence due to a number of factors. One reason could be that the institution, especially in recent years, has been unable to attract or retain the required level of talent to gain the status of an effective player in economic decision-making of the country and articulate its views convincingly. On the other hand, institutions like the State Bank have gained prominence not only because of their autonomous status but due to their capacity-building and the determination to assert their position in the public. Therefore, it is urgent for the Planning Commission to shed its dead weight and change itself into a lean but efficient institution by recruiting top quality economists and other professionals who have a lot of energy and the required confidence. The practice of hiring retired bureaucrats and other experts on considerations other than merit should be discarded. Also, it is essential to advocate only those policy strategies which have a realistic chance to be adopted. Seen closely, Pakistan does not have the wherewithal or the necessary political backing to fully shift to a new policy strategy as proposed in the outline, strengthening the impression of the public that the Planning Commission was largely an irrelevant player.
However, it could also be argued that the perceived weakness of the Planning Commission was not entirely its own fault. The level of resources available for development has not only been meagre but uncertain over the years. As such, it is largely the Ministry of Finance that has dictated terms. The task of the Planning Commission has also been made much more difficult by the unending interference of the politicians in diverting the flow of funds to their pet projects to get political mileage. Since every public representative is busy in getting the maximum funds for their constituencies and the resources are scarce, Pakistan has become a graveyard of failed projects and programmes and the money is not being utilised in an optimal fashion.
The Planning Commission needs to be answerable to a policy board under the Prime Minister having key economic ministers and eminent knowledgeable persons from the private sector in equal number. The Board needs to meet every quarter where all the members of the Commission are answerable for its policies and proposals as well as progress on them. This board should replace the CDWP and Ecnec having full empowerment. The Commission must have administrative and financial autonomy. And, be a lean organisation manned by the best available talent - paid above market salaries. The government's management scales, at present will not attract professionals with the right-skill sets.
The Prime Minister of the country has to raise the prestige and clout of the Planning Commission to a level where it could act independently and also impress upon the legislators etc to think in terms of overall economic welfare of the country. In a capital-deficient country like Pakistan, the Planning Commission could also come up with various plans of public-private partnership in undertaking various projects. Yes, the country indeed needs to strengthen the Planning Commission and devise a new strategy of development that is really practicable but a number of roadblocks have to be first removed to reach the desired destination.