Culpability for crises

The debilitating economic crises facing Pakistan and the deplorable state of public services are mostly a result of mismanagement, inaction and the blatantly wrong policies that have been pursued by policymakers and senior public servants for decades. During the previous government, these officials reached new highs in pursuing actions that could, in many instances, be considered economic crimes.

Senior public servants were tasked with the responsibility to lead and serve in the public interest – and they did pretty much everything but that. Decisions were not taken. Responsibilities were not fulfilled. And, worst of all, results were not delivered. Regrettably no one has been held culpable. Of the numerous acts of grave negligence, given below are just a few examples that have brought Pakistan to its knees and close to an economic and social meltdown.

Public debt has exploded in the last several years; it has doubled in five years, and now interest payments account for almost 50 percent of tax revenues. Instead of raising taxes, which is the sensible way to manage public finances, policymakers indulged in reckless borrowing in violation of fiscal responsibility law. Worse, credit to the private sector has been immensely squeezed. The last NFC Award was seriously flawed and contributed to aggravating the fiscal crisis. Surely those senior officials in the Ministry of Finance who authorised such irresponsible polices, which have burdened future generations with high levels of debt and crowded out development expenditures, should be taken to task.

Acute gas and electricity shortages and abnormally high levels of theft also highlight the gross negligence by senior officials who managed the sector and its institutions. Not a single secretary of water and power or of petroleum has been fired for the crisis. Neither has any CEO, chief engineer, or superintending engineer (or even line superintendent) of electricity or gas distribution companies been dismissed for theft totalling hundreds of billions of rupees. Surely those at the helm of affairs in the ministries and institutions must be held accountable for the crippling loss of growth and jobs, and huge fiscal costs, resulting from the mismanagement in the energy sector.

The FBR’s abysmal performance on tax collection is another area that has bankrupted the country. No senior official of the FBR has been held accountable for poor tax collection effort, weak enforcement of tax laws or frivolous tax notices used as means for extortion.

State-owned enterprises (SOEs) have lost hundreds of billions of rupees – with impunity. Neither their boards of directors nor senior management have been sacked for the terrible performance of these enterprises. The SOE boards, many of whom had private sector representatives, have been criminally negligent for not performing their fiduciary responsibilities. These people accepted irresponsible policies of the government of the day simply to keep their board seats and for personal glory and gain.

High inflation has wreaked havoc with the lives of the poor and those with fixed income. While some of it was a result of global increase in prices, the loose monetary policy by the State Bank of Pakistan (SBP) aggravated the situation. The weak and subservient role played by the SBP also allowed banks to finance the government, instead of the private sector. The SBP neither used its moral suasion authority nor its regulatory powers to stop banks from taking the easier course of lending money to the government, rather than performing their main role as financiers of the private sector. The SBP board, and its governors, have been grossly negligent in performing their responsibilities.

The state of education in Pakistan – a country that is proud to be a nuclear power but shameless when it comes to the deplorable performance of institutions – is one of the worst in the world. Not a single secretary of education, district education officer or head teacher has ever been sacked for poor delivery of education, absenteeism, lack of basic facilities or high student dropout rates.

The Pakistan Railways, one of Pakistan’s most vital assets, has been allowed to go down the drain. Yet no one in any position of authority in the ministry or in the Railways has been dismissed for negligence of duty.

The access to and quality of justice, especially in the lower judiciary, is appalling. There are 1.4 million cases stuck in lower courts, and repeated postponements are the rule rather than the exception. ‘Stays’ by lower courts have played havoc, and property worth hundreds of billions is stuck in disputes. The performance of the lower judiciary has undermined property rights, enforcement of contracts and city zoning regulations, thereby stymieing growth. No one has been held accountable for this state of affairs. Inordinate delays in awarding LNG contracts have also cost the country greatly and led to an increase in gas shortage.

Another example of serious shirking of responsibility is the graveyard of hundreds of billions of worthless projects – many financed by foreign loans – approved by the Planning Commission and provincial planning departments. Despite their dismal performance in proper scrutiny of projects, and pliant approval of political projects, not a single senior official of these planning agencies or heads of departments implementing these projects has been reprimanded, let alone sacked.

There is a long list of deplorable performance by senior officials which has undermined the state and led the country towards becoming a failed state – collapse of law and order, the dreadful state of public health, security breaches, appalling municipal management, etc. While there are many diligent and responsible senior officials who have tried their best to stem the rot, they remain a minority. Lack of accountability has bred a nonchalant attitude among the majority of senior officials – they neither lose sleep, nor care if institutions fail or the government faces bankruptcy.

Many difficult actions will be needed to get Pakistan out of its present mess. One critical action is to hold policymakers and senior public servants in the executive and judicial branches accountable for dereliction of responsibility. Unless that is done, individuals in positions of responsibility will continue to fail the country.

As a minimum, the new government should establish an independent, transparent and objective mechanism to ascertain, and disseminate publically, individual culpability of senior officials for past acts of serious negligence and shirking of responsibility which contributed to the crises – without, however, conducting a witch hunt. In addition, measures must be identified and put in place to ensure that senior officials are subject to greater performance accountability.

The writer is a former operations adviser at the World Bank.Email: fffhasan@gmail.com