BAFL 45.25 Increased By ▲ 0.20 (0.44%)
BIPL 20.20 Decreased By ▼ -0.31 (-1.51%)
BOP 5.41 Decreased By ▼ -0.23 (-4.08%)
CNERGY 4.53 Decreased By ▼ -0.02 (-0.44%)
DFML 15.70 No Change ▼ 0.00 (0%)
DGKC 73.30 Increased By ▲ 2.09 (2.93%)
FABL 27.15 Decreased By ▼ -0.25 (-0.91%)
FCCL 17.80 Increased By ▲ 0.65 (3.79%)
FFL 9.10 Increased By ▲ 0.55 (6.43%)
GGL 12.63 Decreased By ▼ -0.04 (-0.32%)
HBL 111.00 Decreased By ▼ -1.70 (-1.51%)
HUBC 121.60 Increased By ▲ 2.49 (2.09%)
HUMNL 7.32 Decreased By ▼ -0.28 (-3.68%)
KEL 3.25 Decreased By ▼ -0.02 (-0.61%)
LOTCHEM 27.50 Decreased By ▼ -0.35 (-1.26%)
MLCF 39.50 Increased By ▲ 0.42 (1.07%)
OGDC 108.15 Decreased By ▼ -0.16 (-0.15%)
PAEL 17.60 Decreased By ▼ -0.15 (-0.85%)
PIBTL 5.46 Decreased By ▼ -0.10 (-1.8%)
PIOC 108.00 Increased By ▲ 2.00 (1.89%)
PPL 92.20 Decreased By ▼ -0.30 (-0.32%)
PRL 25.00 Decreased By ▼ -0.34 (-1.34%)
SILK 1.09 Increased By ▲ 0.02 (1.87%)
SNGP 63.35 Decreased By ▼ -0.37 (-0.58%)
SSGC 11.90 Decreased By ▼ -0.10 (-0.83%)
TELE 8.24 Decreased By ▼ -0.22 (-2.6%)
TPLP 13.15 Decreased By ▼ -0.19 (-1.42%)
TRG 82.50 Decreased By ▼ -2.90 (-3.4%)
UNITY 25.80 Decreased By ▼ -0.16 (-0.62%)
WTL 1.52 Decreased By ▼ -0.02 (-1.3%)
BR100 6,181 Decreased By -5.3 (-0.09%)
BR30 21,530 Increased By 70.5 (0.33%)
KSE100 60,531 Increased By 29.3 (0.05%)
KSE30 20,188 Increased By 13 (0.06%)
Print Print 2023-09-26

Provincial mandates: Federal spending must be ceased, recommends World Bank

  • WB says that federal and provincial departments that are already redundant or would become so under the proposed devolution to the local governments should be abolished
Published September 26, 2023

ISLAMABAD: Federal spending on provincial mandates, including through government ministries, vertical programmes, and the development budget, should be ceased, delivering significant potential fiscal savings, the World Bank recommended.

The Bank in a policy note stated that federal and provincial departments that are already redundant or would become so under the proposed devolution to the local governments should be abolished.

The recent exercise to rationalise federal autonomous bodies and attached departments, corporations, companies, councils, institutes, subordinate offices at the federal government should be repeated in line with newly delineated responsibilities and fully implemented; and duplicated at the provincial level.

Debt piling up: Borrowing reliance surging to finance twin deficits: World Bank

The Bank stated that the note recommends a broad range of critical reforms for sustainable economic development, and effective implementation of these reforms will present a major challenge, in the context of important governance and institutional constraints.

Pakistan’s politics remains dominated by patronage, with political elites mobilizing support through the direction of regulatory concessions, public sector rent flows, and private goods to constituents and allies rather than through improved service delivery and economy performance.

Policy decisions are heavily influenced by strong vested interests, including those of military, political, and business leaders. Critical reforms have limited prospect of effective implementation in a context where policymakers are accountable to special interests rather than the public, the WB added.

The structure of government is extremely complex while incentives for performance are often weak limiting implementation capacity. Pakistan has around one million public servants across federal and provincial levels spread across hundreds of departments agencies and State-Owned Enterprises (there are currently around 200 SOEs at the federal level alone among around 340 autonomous agencies).

The note further added that the large number of government entities at federal, provincial and local levels leads to continuous coordination problems with unclear mandates causing overlaps and gaps in service delivery. Unclear or duplicative responsibilities undermine accountability.

Performance management of staff is weak. Performance reviews are rare and incentives reward adherence to the rules rather than good operational performance. Promotions are largely based on seniority and informal networks and do not ensure that those most qualified for leadership end up in senior positions. Rapid turnover of officials in senior government positions weakens institutional capacity and undermines continuity in reform implementation.

The WB stated that devolution can theoretically support effective reform implementation by ensuring closer accountability linkages and feedback mechanisms between service providers and citizens. The 18th Constitutional Amendment saw a major devolution of service delivery responsibilities to provinces presenting opportunities for stronger accountability.

The devolution process has not been effectively implemented however federal government continues to deliver many devolved functions creating overlaps in service delivery increasing fiscal costs and blurring accountabilities.

Financing arrangements are not informed by current service delivery responsibilities. While protected under the constitution local governments have limited power or resources in practice. Local government appointments and budgets remain controlled by the provincial governments leaving decision-making centralized in provincial capitals and Islamabad.

The current juncture presents some potential for overdue reform. International evidence shows that institutional reform is a long-term process heavily dependent on a conducive political context. While technocratic interventions are unlikely to transform Pakistan’s institutional environment in the short-term current contextual factors may present some windows of opportunity for positive change.

Current weak economic performance and the potential for continued macroeconomic crises present threats to the economic interests of elites Recognition of the extent and severity of current challenges may broaden support for required economic and institutional reforms, the WB added.

Copyright Business Recorder, 2023


Comments are closed.

Ahmad Din Sep 26, 2023 11:08am
The is good step to rationalize redundant departments which are heavy burden on public exchequer. All those irrelevant departments must be abolished the funds saved from these departments needs to be shifted to those departments which are delivering service to the people. Especially bureaucracy and their lavish spending on VIP culture is big burden on the economy while their contribution to the economy is zero rather creating hurdles in developmental interventions. If attached departments of Health, Education, C&W, Irrigation etc are already doing their work then what is the need of secretariat establishment and what value does secretariat are adding in the performance of these departments. Government must abolish secretariat instantly and secondly Deputy Commissioner, AC etc are also redundant and contributing nothing to the people and the economy. There is need of increasing number of judges, Police, doctors, teachers, engineers, etc who are delivering service to the people.
thumb_up Recommended (0)
KU Sep 26, 2023 12:35pm
Very relevant advice from WB, the dinosaur of our public sector is eating away precious and scarce resources, and the government should heed this direction. The much neglected and perhaps stuff of criminal negligence is the absence of an economic revival plan for industry and agriculture. A lot of lies are being fed to restore confidence in economic growth but in reality, both sectors are ignored and in danger of closure leading to mass unemployment.
thumb_up Recommended (0)
Azeem Hakro Sep 26, 2023 02:12pm
This proposal is excellent, and there are many departments that are performing unnecessary duplicate work, and their staff is also excessive. The govt has been given a good suggestion, but The World Bank has not provided specific recommendations on what to do with the staff that would become surplus as a result of these reforms. However, there are a few options that can be considered: 1. Retraining and redeployment: Skilled and experienced staff can be retrained and redeployed to other government departments. 2. Early retirement: Another option is to offer early retirement to reduce the overall size of the public sector workforce. This option may be more expensive. 3. Redundancy payments: The least expensive option would be to provide redundancy payments to the affected staff. However, this option may have a negative impact on the staff.
thumb_up Recommended (0)

Provincial mandates: Federal spending must be ceased, recommends World Bank

Inter-bank: rupee continues to climb against US dollar

Open market: rupee strengthens against US dollar

Long wait for freedom: Afghan refugees in limbo in Pakistan

Israel and Hamas agree to extend temporary truce

Oil inches up, all eyes on OPEC+ meeting outcome

Mughal Iron & Steel Industries completes acquisition of energy subsidiary

FCCL commissions Greenfield Cement Manufacturing Plant in Punjab

Henry Kissinger, singular US diplomat, dead at 100

Kuwait deals to add to inward FDI flows

Operation of SRO about additional tax on banks’ windfall income suspended