Pakistan's latest growth strategy is led by Dr Nadeemul Haq who spent 24 years of his pre-retirement working life in the International Monetary Fund. Post-retirement Dr Haq continues to hold responsible positions including Trade Policy Advisor to Commerce Minister during Musharraf's era, Director Pakistan Institute of Development Economics and most recently he is resident in the Pakistani capital Islamabad as Deputy Chairman Planning Commission.
The question that is uppermost in the hearts of several long time bureaucrats serving in the Planning Commission, though it is rarely publicly expressed for fear that criticism may compromise their jobs, is that the latest growth strategy comprises new thinking doing the rounds in multilaterals and fails to take adequate note of indigenous proposals premised on factors unique to this country. These critics also support promotion within the ranks to take advantage of relative youth and fresh ideas. This is particularly relevant given that the Planning Commission has done little in terms of making a difference in our economic fortunes not because it does not have good plans and ideas but because it relies on the Ministry of Finance for implementation. This trend unfortunately is continuing. Others argue that Dr Haq, a close friend of Dr Hafeez Sheikh, is the best man for the job as he brings a wealth of international experience and international memory to the table - experience that few of us would not covet especially as it would be backed by extremely generous dollar pensions.
Youth and fresh ideas versus experience/institutional memory is a debate that is not within the purview of this article. The growth strategy spearheaded by Dr Haq is. The question is what does he propose that is different to what any analyst, schooled in domestic needs and/or within an international context, would recommend? The very first impression that one gets after a look at the growth strategy so far revealed is that there is a focus on two watchwords, much used in multilateral parlance lately: governance and results-based management. Dr Haq's supporters who argue that poor governance and lack of results-based management is unique to this country or to this particular time periods must stand corrected.
Multilaterals are spending considerable sums of money in hiring governance specialists though what qualifications a governance specialist is required to possess is far from clear; similarly it is unclear what qualifications a results based management specialist is required to possess given that, like the rest of those engaged in development work, results being produced by project/programme managers remains a critical ingredient to assess success or failure. The definition and domestic institutions that can have an impact on improving governance and promote results based management are adding reams of paper (as well as computer disc space) to these two critical aspects of development literature. However there is no study that indicates that with the continuing development of governance and RBM terminology the success rate of projects/programmes funded by multilaterals/bilaterals or by a government has led to an increase in success.
Notwithstanding these comments Dr Haq's growth strategy proposes the following actions to improve governance: (i) civil service reforms (a major demand of multilaterals for over a decade at least); (ii) revisit terms and monetization of our civil servants (this given the 50 percent pay rise in 2010-11 budget and another 15 percent last year when the rest of the country suffered an erosion in real incomes) is not supported by the taxpayers; (iii) capacity building through reformulating training programmes (Dr Haq's CV states that he led the IMF team to develop training courses) perhaps he will develop training courses for this country; and (iv) reforms in institutions and public sector entities reforms - a long standing demand of independent analysts that the government has yet to begin implementing in letter and spirit.
RMB, our growth strategy recommends, can be strengthened through: (i) preparing and strengthening a framework, (ii) enhancing capacity for reform/project design, feasibility, implementation, (iii) enhancing capacity of sub-national governments, (iv) online connectivity, target based monitoring, Monitoring and Evaluation reports to be shared with all stakeholders. These are all salutary recommendations made periodically through technical assistance support extended by multilaterals as well as our own independent think tanks however the reports continue to gather dust in our ministries. I would simply suggest that if the government meticulously adheres to PPRA rules and ensures that all contracts are awarded as per these rules we would have the best governance and RBM performance in the world.
The growth strategy also recommends focus on youth and community and here it simply suggests improving governance of social sectors and food, human and security reforms. Critics may challenge such an approach given that the example set by the Planning Commission with all its retired advisors headed by a man retired from the IMF appears to be contrary to this recommendation. One would have hoped that the eighteenth amendment notwithstanding the focus had been on education as well as on promotion from within organisations as opposed to ad hoc appointments.
The growth strategy also seeks to promote connectivity but with PIA, NHA, PR having reached a peak in terms of bad governance during the current dispensation of which Dr Haq is a part a suggestion to restructure seems to be as obvious as unlikely to be implemented any time soon. For good measure there is also the recommendation to reform and upgrade the ICT but one would have hoped that a suggestion to invest at least 2 percent of our GDP in education would have more appropriate as an educated citizenry would break the current baradari voting patterns in our rural areas that ensure the reelection of poor performers.
Productivity too, the growth strategy argues must rise and we all know what is required to achieve this objective which includes reviewing and rationalising Public Sector Development Programme, and increasing knowledge reach. Dr Haq in an article however correctly argues that we as a nation seem to be focused on bricks and mortars, "where the government is involved in building assets that could have been furnished by the private sector, more efficiently." But the private sector is unwilling to enter the market given the ongoing massive energy crisis as well as law and order problems. Additionally resistance by the government to allow the private sector to set the price of the product/service/infrastructure is a further impediment to private sector interest.
Dr Haq correctly argues that "The current narrative of growth that focuses on 'my project' and 'my allocation' combined with distortive incentives (subsidies and protectionism) for industrialisation needs to be shifted to a new narrative that drives us beyond excessive focus on building infrastructure and overly diversified public investment, and towards the pillars of 'new growth theory' - ie, towards productivity (improving returns/yields) of assets and all factors of production and efficiency (producing goods and services cost-effectively)". Much has been written about these distortive incentives and the need for a new narrative, and one website that would itemize what the country needs is the IMF site relating to conditions of the stalled Stand-By Arrangement (SBA) for Pakistan. However, as is common knowledge, neither Dr Haq nor Dr Hafeez Sheikh have succeeded in convincing the political leadership to undertake these reforms.
Additionally the new growth strategy suggests, as is stipulated in documents available on the websites of all our major multilateral donors, that our energy sector reforms must include: (i) energy security through improved governance; (ii) independent generation and distribution companies; (iii) better enforcement of rules and regulations; (iv) induction of professional management; (v) rationalise energy prices; (vi) change Nepra and conservation acts and consolidate and streamline labour laws and agriculture market committee act; and last but not least (vii) unification of all related energy ministries. Critics of Doctors Haq and Sheikh argue that perhaps a streamlined Ministry of Finance on the same pattern as the streamlined Ministry of Energy through integration may be supported.
And lastly and innovatively Dr Haq suggests creative cities whereby building regulations must be amended as well as land acquisition and co-operative housing society act to promote city cluster development.
Dr Haq has many ideas/proposals that must be supported and are found in development literature. This is not to undermine his contribution merely to point out that Pakistan has many studies that have reached similar conclusions, both those undertaken by multilaterals as well as by our own indigenous experts and they are all gathering dust in our ministries. Perhaps it is time to read them and to send our politicians on training courses on the best economic way forward.