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The care they can take

The constitution is silent on the precise role of the caretaker government. There is a general agreement that the caretaker setup should not take any action that favors one political party over another. Beyond this, public opinion is divided on the caretaker government’s role. There are many who believe that caretakers have a narrow minimalist role – solely focusing on ensuring free and fair elections, and conducting day-to-day administration.

On the other hand, a large segment believes that the constitution provides an opportunity to the caretakers to assume an activist role. They believe that, within the time available, the caretakers should implement reforms which can be initiated through executive actions and do not require legislative changes.

These people would like the caretakers to take bold actions to: strengthen democracy, stop the rot resulting from the atrocious governance during the last five years, and prevent the imminent economic meltdown.

Admittedly, three months is too short a period to fully reverse the downward economic and institutional slide, but a minimalist posture and inaction by the caretakers will accelerate the slide towards a failing state. Therefore, even if the risk of policy reversal by the next government is high, the responsible path for the caretaker government would be to ‘bite the bullet’ and kick-start reforms in a few key areas. Reforms are needed to stall the economic meltdown and prevent a full blown foreign exchange crisis.

By making a few difficult reforms, the caretakers would allow the newly elected government a ‘soft landing’ – not burdening it with taking politically unpalatable, but necessary, reforms within its ‘honeymoon period’. The caretakers could also take comfort in the activist nature of the courts and the media which will make it difficult for the new government to reverse ‘good governance’ reforms initiated by them.

Besides ensuring free and fair elections, the caretakers should focus on three areas: improving institutional governance, strengthening public finance, and reforming state owned enterprises (SOEs).

The upcoming elections hold the promise of being a game changer for Pakistan, provided all the election-related laws and rules are faithfully, transparently and objectively implemented. Therefore, the caretaker government’s highest priority should be to ensure that the Election Commission of Pakistan has all the financial and human resources needed to implement Articles 62 and 63, conduct free and fair elections, and enforce electioneering rules.

In addition, the caretakers should encourage and facilitate live ‘issue-oriented’ debates (similar to those in the US presidential elections) among leaders of main political parties. The second priority should be reversal of the terrible mis-governance of the current government, which has wrecked public institutions and led to an increase in corruption.

This will require, first, initiating forensic investigations on egregious cases of corruption, while ensuring that there is no witch hunt. Second, they must establish mechanisms, at federal and provincial levels, to transparently and rigorously review all senior appointments and promotions made during the last few years. This must be done to identify and reverse egregious cases of appointments and promotions made on political grounds and nepotism, and to see where merit was ignored

Third, the ‘rules of business’ must be amended to: (a) revise promotion policies to make them transparent and merit-based; (b) reduce the discretion of the PM/CMs in senior level appointments in government and independent agencies; (c) require the cabinet division to upload all documents related to economic decisions taken by the cabinet and ministries on official websites so as to enhance transparency of decision-making; (d) add an ‘ethics of office’ chapter which clearly lists actions by ministers and elected officials deemed to have violated the rules; (e) hold senior officials personally liable for non-compliance of the Freedom of Information Act; (f) ensure that government information departments cannot be used as propaganda machines for governments in power.

Another important task should be aggressive fiscal reforms to raise taxes and reduce expenditures, to avoid Pakistan from going over the ‘fiscal cliff’. The caretakers should immediately establish a blue-ribbon fiscal reform committee to recommend expedient actions (within 30 days) that can be initiated and/or completed within the period of the caretaker government.

Immediate reforms should include: (i) withdrawal of undeserving tax exemptions provided through the state revenue officers (SROs); (ii) substantial withdrawal of untargeted energy and consumer subsidies; (iii) imposition of a sensible austerity programme; (iv) symbolic actions to cut expenditures, such as immediate elimination of VIP perks and privileges and withdrawal of luxury cars; (v) cancelling politically motivated, and low priority, federal and provincial development projects; (vi) changes to public procurement rules to strengthen transparency and efficiency of public procurement, and introduce a ‘whistle blower’ programme.

To expand the tax base, and to send a clear signal that the rich and powerful cannot escape the tax net, the FBR should be instructed to take the following actions: (i) audit tax returns of all legislators of the most recent assemblies and senior civil, military and judicial officials; (ii) send tax notices to all ‘non-filing’ legislators, and the millions of upper income households and commercial consumers of electricity and gas, with average monthly utility bills of, say, over Rs20,000.

The fourth priority should be to initiate SOE reforms to stop their massive losses. The reforms should comprise: (i) revalidating all appointments to the SOE board, and CEO positions, through a transparent and rigorous process; (ii) removing all government officials from the SOE boards to eliminate this major source of abuse of office; (iii) implementing a “golden handshake” programme to reduce excessive employment in SOEs; (iv) adjusting energy prices to enable the energy SOEs to be financially profitable; (v) urgently seeking Supreme Court rulings on recent higher court judgements which are impeding privatisation and preventing automatic adjustment of energy prices to reflect changes in international prices of fuel oil; and (vi) establishing a gas allocation policy to give the highest priority to power generation, and elimination of gas price subsidy to fertilizer and CNG.

Finally, the caretaker government should implement an aggressive public awareness raising campaign, especially using the electronic media for debates and public service messages, on the following major national issues: high population growth; dwindling water resources; religious intolerance and extremism; overcoming energy shortages and reducing energy subsidies; accelerating growth; revising the NFC Award; raising taxes and reducing public debt; reforming and privatising SOEs; eliminating subsidies to the ‘non-poor’; reforming civil institutions; relations with India etc.

The main objective of this campaign would be to mould public opinion on reforms and the sacrifices needed to avoid economic meltdown and reverse the slide towards a failing state. Based on this campaign, the caretaker government should prepare and widely disseminate option papers and reform strategy on each major issue to facilitate and encourage the newly elected government to implement overdue structural reforms.

Pakistan is almost financially bankrupt and its public institutions are dysfunctional at a time when it is at a crossroads in its democratic journey. The constitution provides the caretakers the space and authority to be bold. They will fail Pakistan if they take a back seat minimalist role.

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

Abid Hasan, "The care they can take," The News. 2013-02-20.