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Fundamental reforms

The main cause of our pathetic socio-politico-economic conditions is perpetual, unchallenged, un-resisted existence of inefficient and corrupt institutions that are not interested in the welfare of people, rather working to add to their miseries. The successive governments’ policies of self-aggrandisement have made Pakistan a State-in-perpetual-crisis inflicted with self-created conflicts. We need to move quickly and decisively to reverse this trend and revamp the entire system through fundamental reforms in all areas-not badly-designed plans or half-heated efforts. Pakistan’s undeniable geo-strategic and business competitive position in the region is of no use unless we resolve conflicts through comprehensive reforms and change the basic structures of all vital State institutions to deliver and strengthen democratic polity.

The failure of democracy in Pakistan, among many other factors, is attributable to lack of democratic values within political parties-they are dominated by individuals who openly defy laws and avoid transparency in their affairs. It is sad to note that political parties, despite criticism from everyone, are not ready to introduce democracy within their ranks. Unless these parties reform themselves by introducing fundamental changes in their working, there is dim hope of meaningful (sustainable) democracy in Pakistan. In all established democracies, political parties regularly hold elections, publish their audited accounts, file tax returns, disclose details of expenses and names of donors-all these elements are conspicuous by their absence in our political culture. Political parties in Pakistan are also required to comply with these standards but the regulators, Election Commission of Pakistan (ECP) and Federal Board of Revenue (FBR), have miserably failed to enforce the laws and regulations.

The following steps are inevitable if we want to progress as a viable State and democratic country: 

1. Reformation of democratic institutions making them accountable to masses. Direct elections of Senate and giving it powers to vote on Money Bill.

2. Transparency and accountability in the governments at all levels to enable citizens to understand and participate fully in the process of national integration. This includes live telecast of the national and provincial assemblies and Senate proceedings.

3. Fiscal decentralisation ensuring socio-economic justice for people of federating units, giving rights to provinces promised in the 18th Constitutional Amendment. Local governments with devolution of administrative and fiscal powers as per Article 140A of the Constitution.

4. Reforms in justice system alongwith changes in administrative/governance apparatuses to eliminate the causes of litigation.

5. Reforms in civil services, fair deal for employees with effective accountability.

6. Revamping of education system with the aim to end jahalat. Our problem is not only illiteracy but also jahalat. Even the so-called literates demonstrate lack of civic sense. Focal point of education should be creating a society that is tolerant, disciplined, courteous and knowledgeable-capable of making innovations and technological advances.

7. Elimination of terrorism, sectarianism, bigotry, intolerance and violence though enforcement of law and by taking concrete measures to ensure social development of society based on higher values of life and humanity.

8. Strict laws and their effective implementation to curb terrorist financing, money laundering, plundering of national wealth, political write-off of loans and leakages in revenue collections.

9. Devising long-term and short-term strategies to break the shackles of debt-trap, making Pakistan a self-reliant economy and ensuring social security and economic justice for all citizens.

10. Transparent public sector spending coupled with efficient performance.

11. Revitalisation of tax machinery by establishing National Tax Agency having representation of all federating units to harness the actual tax potential, which is not less than Rs 13 trillion at federal and provincial levels. Collection at this level will bring prosperity for all and end dependence on foreign and domestic borrowing.

12. Simplification of tax laws and procedures. Replacement of personal income tax with asset-based tax [Zakat]. Corporate income tax at a rate of 20% to promote industrialisation and employment generation. Sales tax should be replaced with harmonised consumption and service tax at the rate of 5% across the board.

The juxtaposition of economic policymaking and political reforms is necessary. The agenda for reform and survival should entail a comprehensive, well-integrated and unified plan that alone can assure its success. The reform in one sector ignoring the ills in the other, resorting to improving something at the cost of leaving aside the one interlinked, will not yield desired results. The case of tax reforms without eliminating the menace of black economy testifies to it. The main cause of low tax collections is existence of an unprecedented size of underground economy and inefficient tax machinery. Tax reforms with US $100 million loan from World Bank thus failed as no measures were taken to rout the parallel economy, rather protected with section 111(4) of the Income Tax Ordinance, 2001 and section 9 of the Protection of Economic Reforms Act, 1992. The same is true for judicial reforms-the increase in number of judges has not solved the problem of backlog of cases as no effort is made to eliminate the causes of litigation.

In the same manner mere Constitutional changes giving more powers to Prime Minister have failed to improve the political culture. The democratisation of society requires respect for rule of law in practice by the elected representatives. They flout it and promote cronyism that is antithesis of democracy. Elections alone cannot ensure democratisation of society. These are a means to achieve representation of the people in governance, which is totally ignored by those in power. The absence of peoples’ rule under civil regimes is as conspicuous as under military dictators.

As our rulers are doing everything contrary to democracy in the name of political reforms, in the same manner they are resorting to anti-people economic policies making Pakistan heavily dependent on internal and external loans instead of striving for self-reliance by taxing the rich for the benefit of the poor. The rising tide of poverty is the direct result of these policies.

Successive governments, civil and military alike, instead of dealing effectively with plundering of national wealth, tax evasion and illegal outflows have been pardoning the corrupt and appeasing tax evaders through various laws and amnesty schemes. The result is obvious. There is an ever-growing informal economy and massive unlawful outflows undermining economic growth. Those having “dirty money” control economic resources and politics. One of the worst consequences of ‘money power’ is its pernicious effect on the general moral fabric of society. It puts integrity at a discount and places a premium on vulgar and ostentatious display of wealth. This shatters the faith of the common man in the concept of dignity of honest labour and virtuous living.

Politicians need to act responsibly in all spheres-whether in power or in opposition. Their role is pivotal for effective working of institutions of the State. Being role models, it is imperative for them to show others by their conduct, the supremacy of rule of law. If they indulge in corruption and malpractices, the entire system becomes discredited. Capturing power is the main goal of every party and there is nothing wrong about it. But once in power, favouring the near and dear and/or amassing wealth through abuse of office is what destroys democracy. While in power, they should demonstrate by their actions that they are custodians of public money and are bound to work for public welfare and not personal gains. There prevails nepotism within parties. There is no respect for merit. Presently, almost all political parties are dominated and controlled either by a single person or a handful of individuals with workers showing complete loyalty to their “chief” rather than to the party’s manifesto/programme. Obviously, in return, they expect personal favours from the “chief” when the party gets power.

There is formidable resistance from politicians against establishment of an independent accountability authority in Pakistan as they know that such a body would expose their corruption and end their control over the State. The way forward is that political parties should be forced to keep proper accounts, get them audited by reputed firms and file tax returns. Once this is made mandatory under the law, they would have no option but to take into their folds only those people who honestly discharge their tax obligations. The process of filtration within the parties is a necessary step towards a democratic culture.

(The writers, authors of many books and partners in HUZAIMA IKRAM & IJAZ, are Adjunct Faculty Members at Lahore University of Management Sciences)

Huzaima Bukhari and Dr.Ikramul Haq, "Fundamental reforms," Business recorder. 2015-03-13.
Keywords: Political science , Political issues , Political system , Political process , Political reforms , Social issues , Social problems , People welfare , Terrorism , Pakistan