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Accountability versus economy

The foremost election slogan of PTI was across-the-board ruthless accountability and economic turnaround for the betterment of the have-nots who for decades have been reeling under poverty and hopelessness. This election pitch was too powerful to be resisted by this segment of society as they removed the barriers of their party affiliation and loyalty and voted PTI into power. They, therefore, want the PTI government to deliver on its commitments.

In its over 120 days of governance, the government has made some significant inroads in the accountability process. Insofar as economy is concerned, it is still trying to figure out its action plan.

A few days ago, PM Imran Khan met in Karachi a delegation of FPCCI, OICCI and stock exchange and sought the cooperation of the private sector to help eradicate poverty, create new jobs and build up the nation’s economy.

There were some useful suggestions volunteered at the meeting, significant of which was the proposal by the President of OICCI who presented to the PM a comprehensive booklet titled “Recommendations on National Program for Digital Transformation” prepared by OICCI.

Digitalization of processes and systems enforces seamless accountability and good governance; it also enhances the operational performance of the organization.

The financial crisis of 2008, emerging from the compliance and governance gaps in the banking industry, compelled multinational organizations all over the world to follow the global compliance protocols of good governance and Pakistan is part of it. The government can benefit a great deal from the recommendations of OICCI and the experiences of its member companies which will map government’s agenda of accountability and economy for the poor.

While there are recommendations and voices in support of good governance and accountability there are also some voices and suggestions to the government that it must divert its focus from accountability to economy as the rhetoric of accountability is limiting the economic growth of the country.

These are the same voices, infected by vested interests, who finally had there way in the early years of President General Musharraf who had embarked well on the process of across-the-board accountability by NAB but soon succumbed to the pressure of this lobby and diverted the focus of NAB to selective politically-inspired accountability. In the process, the President lost his credentials as a leader. What flourished most after this unfortunate U-turn was corruption, which gradually penetrated all segments of society.

The economy of the nation cannot be separated from accountability. A poor and honest nation can survive with dignity and modest living but a corrupt nation cannot. Accountability is directly proportional to economy. Good governance and accountability lead to good economy. Bad governance leads to bad economy.

Pakistan’s foremost economic woes are on account of bad governance and lack of accountability, which is a lethal combination of corruption, incompetence, inefficiency, nepotism, cronyism and vote politics.

As per the World Bank report released earlier this week the power sector alone is causing the nation a whopping loss of $ 18 billion per year due to inefficient power sector primarily on account of pathetic governance which works out to be 6.5 percent of nation’s GDP – of which $ 8.4 billion is on account of losses in businesses. If corrected it could increase household incomes by $ 4.5 billion. This is the strength of accountability. Increase in tariffs to cover the losses negatively impact the poor and the vulnerable, the WB report adds. This is the unanimous opinion of the WB, the IMF and ADB.

In addition to this, the accumulated losses of Rs 1.3 trillion on account of loss-making entities in the public sector and Rs 1.4 trillion on account of circular debt and bankrupt PIA and PSM, etc, are all primarily on account of poor governance.

The PM has announced that he is placing the setup of ‘Ease and Cost of Doing Business’ under his direct surveillance at the prime minister’s house. All the ten parameters specified by the World Bank in this regard are dependent on governance – issues of permits, dispute resolution and arbitration, setting up of industry, etc, etc.

One of the major deterrents for a foreign investor to invest in Pakistan is not profitability but the high incidence of corruption at all levels. Local investor is still surviving because he has learnt to live with the institutionalized regime of speed money which is rendering the businesses uncompetitive.

So, great is the power and effect of accountability on the economy of the nation. But accountability is only successful and rewarding if it is above board and equally applicable to all defaulters. The incumbent government can only derive benefits and achieve success in eradicating corruption if it demonstrates fairness in the process for which at the end of the day the government will itself be the beneficiary in having achieved its agenda of accountability. Much has to be reformed and delivered on this account as the results of accountably are not tangible so far. The voices against accountability are becoming louder but the government must not succumb to such pressure come what may.

Farhat Ali, "Accountability versus economy," Business Recorder. 2018-12-15.
Keywords: Economics , Election slogan , Accountability process , Economic growth , Institutionalized regime , Foreign investor , Dispute resolution , GDP , PSM , ADB , PM , WB