Ministerial appraisals: teething problems?

Last week, the federal government did a performance review of its ministries and ranked the top performers. One may question the method and outcomes. But the fact that performance appraisal mechanism has been introduced and its results have been made public is a welcome move.

The ministries not amongst the top performers are seemingly under pressure. One minister wrote a letter to SAPM on Establishment questioning the performance criteria, and some others are privately showing resentment. Even one top performer (having corporate experience) believes the process is a farce. Nonetheless, ministers concern about not being in top performing list shows that such practices can push ministers to perform better. And that is the key outcome of this exercise.

Whatever the method and irrespective of the fact that how far the results are from actual performance, it is intriguing to see that no key economic ministry is amongst the top rank. The three key portfolios at federal level are finance, energy and foreign. Many of other ministries’ functions are either devolved to provinces after 18th amendment or are of lesser importance in the bigger scheme. Even the Foreign Office has historically remained under the influence of Islamabad and Rawalpindi.

Thus, it’s mainly finance and energy. These are nowhere in the top performing ministries. Based on the scorecard, this implies that the core of the federal government is not performing. This reveals the overall competence and performance of the government. Think of an organizational appraisal in a corporate that appraises its various functions and there is nothing to take home on production or sales. The awards go to accounting, IT and other back-office functions. Would you invest in a company where the core teams are not performing?

Pending reforms in the energy and finance — especially energy, cannot be overemphasized. Teams are changed in these ministries are far too frequently. Both the incumbent ministers don’t even have a year’s respective roles. And the story is not different for secretaries. The real appraisal is to gauge the performance of these two ministries.

In case of finance, read the latest IMF country report to evaluate the performance. The Finance Minister’s pitch was to keep the IMF programme on backburner and boost the economic growth without challenging external account (balance of payments) stability. The Fund implicitly called the finance minister’s bluff. The second paragraph of the executive summary of the IMF’s country report summarizes the performance. It states, “Since the April 2021 reviews, program implementation has been uneven: fiscal policy became increasingly expansionary and several key EFF commitments were reversed’. It is pertinent to note that Shaukat Tarin assumed the finance minister’s role in April 2021.

Regarding energy ministry, the less that’s written, the better. The menace of circular debt and energy supply system inefficiencies have seriously damaged the economic potential of the country. The government is eying attainment of competitive edge in manufacturing – especially in the exporting sectors. However, the non-availability of reliable energy and its pricing are the biggest impediments. Not much to take home on energy sector reforms in the past 3.5 years.

There is nothing on the discos’ privatization, and upgradation of the transmission and distribution networks. The consumer electricity tariffs are moving up to plug in the circular debt flows. Not much to take home on lowering the AT&C losses. The government is attempting to boost the demand of power to dilute the impact of growing capacity charge. However, the transmission and distribution constraints are hindering it. The investment in upgradation needs to speed up. Implementation of the power sector liberalization plan demands having multiple buyers and sellers to reduce the footprint of government, which is lagging based on its timelines. The refinery policy is in the making for two years. There is nothing substantial being done to resolve the growing elephant of gas circular debt. The private sector LNG terminals deals are yet to close. The weighted average cost of gas (WACOG) is not being implemented. And the list goes on.

However, that does not mean that the current or previous energy teams are incompetent. There are political and economic considerations. It’s a tough nut to crack. But it is the most important one. The stress and efforts being put in by the current minister and earlier SAPMs speak for the resolve. Now by not having energy ministry in the top 23 ministries (having score over 80%) may dishearten those at the helm of affairs.

The criterion of the evaluation is based on the targets agreed by the relevant ministry and the quantitative score is computed on what is being achieved within agreed upon. For example, national security division is amongst the top performers with only one item i.e., presenting the National Security Policy. On the other hand, energy ministry had forty items to comply with in FY20-21including both petroleum and power divisions.

Thus, those who aimed low and have included the routine work in task are the better performers. A better evaluation way could be based on the work being done and the challenges each ministry faces in its own sphere. Quantitative score has 70 percent weight and that has largely influenced the ranking. Rest of 30 percent is qualitative and subjective.

Unfortunately, the media discourse on the performance evaluation is based on the general perception of key performers and a few on prime TV shows engaged in loose talk and below the belt jokes about the top performing ministry. This shows the quality and objectivity of the mass media. Ignoring the media noise, the initiative is great. This is the first time any government has conducted appraisals. There are loopholes in the criteria, and one may hope that the appraisal system shall improve with time.

Copyright Business Recorder, 2022