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Since late 1980s the origin of reform mantra is solely in the domain of the multilateral agencies. In the last one year, national think tanks and gurus have joined the chorus of need for ‘deep’ and not the ‘superficial’ reforms that the country had been following since the 1990s to attract USD.

PIDE (Pakistan Institute of Development Economics) has taken a lead in chanting the reform mantra in front of the upcoming government by documenting, debating and attempting to achieve a consensus on a 10-point reform manifesto, hereto referred as ‘Manifesto’.

Compared to few other reform agendas suggested by the PRIME Institute, Islamabad Policy Research Institute (IPRI) and Prof. Emeritus Hafiz A. Pasha, only ‘Manifesto’ will be discussed in this article as it is more detailed if not exhaustive (as felt by few gurus) than others. We discuss its uniqueness or otherwise, potential political ownership and strategy for prioritisation and/or sequencing.

The manifesto is quasi unique and bold as it is based on wide-ranging political and institutional reinvent, unlike the 3-year reform agendas of the IMF/WB, which treat the existing political setup mostly as given, due to the limited mandate.

It might be provocative to suggest, that ideological foundations of the economic framework tilt towards Washington Consensus mantra. Where it is highly contextual for Pakistan is its detail of overhauling or reforming the working of many of the key organizational and bureaucratic structures of governance in nearly all of the 10 areas.

The sub-reforms in each of the 10 areas are drawn directly or indirectly on empirical data, country best practices as well as to do justice to IMF/WB/ADB, from their various micro-level suggestions buried and mostly unread in their country reports of past 30 years.

Compared to the periodic reforms suggested by the multilaterals, it is less foreign exchange intensive, as its focus to repeat, is on political and institutional overhaul. Faced with the overhang of foreign debt and the past tendencies of politician and bureaucracy to undertake shallow inter-temporal reforms for USD and their self-interest in terms of job security and individual level quid pro quo with international agencies, this feature of manifesto sets it apart from the previous reform exercises.

The Manifesto faces a real and stiff challenge in implementing the first two themes namely ‘Much Needed Political Stability’ and ‘Public Administration for the 21st Century’. Strategically, one can argue that pursuing the buy-in of these two themes vigorously from the new government can risk the chances of making some headway in other 8 areas. There are two main stakeholders in the first two reforms, political government and bureaucracy.

The politico-bureaucracy nexus to safe guard their political survival and economic interests come to play specifically with hung parliament. It is well-known and there are many examples that since last 30 years there has been no political ownership for ‘deep’ structural reforms, only half-hearted lackluster inter-temporal support for 3-year stabilization agenda to tie over the USD shortage.

The recent manifestos of the 3 political parties constitute an eye-opener of how far the new government will be willing to own the suggestions of the new kid on the block. Implementing them is a far cry.

Given that the hung parliament is a foregone conclusion, even innocuous sub-items under these two areas will require 3/4th majority.

Yes it is possible as in the case of majority vote for the 18thAmendment, which was traded for removing term limits for the PM. The ineffectiveness of the Debt Limitation Act suggests that the passage of reforms even by the legislature is no guarantee for their long life in Pakistan.

Lets’ hope that the controversial State Bank reforms passed by the legislature are not slowly and cleverly diluted in the near future, once we do away with the need for IMF tranches. The bureaucratic ownership of any set of reforms, and there are many in the Manifesto, is also unpredictable.

Dr Ishrat Husain’s monumental work on re-structuring of the ministries could have been the starting point to overhaul the bureaucracy in the 2010 decade. Under the care-taker government in the past few weeks, the dilly-dallying on proposed FBR and Pension reforms (at the behest of IMF) are again an indicator of the self-interest of the bureaucracy and are waiting to be laid to eternal rest once the USD 350 million are deposited in the New York Bank and the new government takes over.

However, to pressurize the sub-national legislatures to hold local government elections in the first year of the new government and implementation of provincial finance awards will be a big achievement for the Manifesto as it will portend the nurturing of political and bureaucratic dynamics in the future at the district level.

With the past 30-year experience of non-implementation of ‘deep’ and ‘tough’ structural reforms, it will be difficult to expect any headway by the hung parliament in re-inventing the economy through political and bureaucratic ownership of the remaining 8 areas of the Manifesto.

Interestingly, if the ‘stick’ present in the time-bound multilateral programmes was cleverly removed from the ‘carrot’ by using geo-strategic, geo-political, geo-economic and geo-climate ‘Trump’ cards, then what is the incentive to implement the manifesto when there is no ‘carrot’ and it is timeless? Next main challenge for the Manifesto is to strategise, prioritise and sequence the 8 areas of reforms.

While the political manifestos are put to vote for achieving consensus, can a similar exercise be conducted for the Manifesto?

Given that as a society we don’t incorporate time in our actions, it would be better to just prioritize and sequence one or two areas for the next 3-5 years and then strategize the buy-in from the political government and relevant bureaucracy around those selected areas. Given the economic community’s in-built ideological and economic biases, it will again be an achievement for the Manifesto to reach a consensus on the criteria for prioritizing even one or two areas.

Few suggested criteria for prioritizing are: bang for the ‘domestic’ and/or ‘external’ buck, ease of buy-in from political/bureaucracy, time-frame for legislative and judicial buy-in, degree of resistance from the relevant mafias, spillover or positive externalities to remaining 6 or 7 areas of reform and medium to long-run impact.

As an example if the area of ‘Energizing the Future’ wins on the basis of few or all of the above criteria as a low-hanging fruit, ‘Changing the population paradigm’ based on the above criteria can be picked as long-term goal to bring about sustainable development.

To conclude, on an optimistic note, voting of the economic community unanimously for the Manifesto will clearly suggest that ‘governance failure’ and elite capture are the root cause of all our ills. At least we now have a consensus-driven home-grown reform agenda to be implemented in the next 20 years.

Copyright Business Recorder, 2024


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