Last month, Pakistan was involved as a key participant in two back-to-back meetings, one in Brussels and the other in Washington DC. Both were focused on how to assist this non-Nato ally in meeting its myriad challenges including this years monsoon flood disaster of Biblical magnitude. At the end of the day, a loud and clear common message was flagged in red from both meetings urging Pakistan to fix the fundamentals of its governance. There could not have been a greater service to the people of Pakistan.
The so-called Friends of Democratic Pakistan (FODP) had assembled in Brussels on October 15 for a donor conference hosted by the EU to look at Pakistans case for reconstruction and rehabilitation aid in the aftermath of its worst floods in history. The three-day Washington meeting (October 20-22) was the third ministerial-level round of the US-Pakistan Strategic Dialogue.
Interestingly, at both these meetings, Foreign Minister Shah Mahmood Qureshi played buddy-buddy with his two very distinguished lady counterparts. The EU-led meeting in Brussels, also a third in this framework at ministerial level, was co-chaired by EU High Representative for Foreign Affairs, Catherine Ashton, whereas at the Washington meeting, an amiable Hillary Clinton sat next to Qureshi as co-chair of their high-level dialogue.
Both meetings expectedly ended with unexpectedly one page joint statements with almost identical narratives without any noticeable outcome. The FODP were blunt enough to make it clear that the FODP was a Pakistan-led process and any international participation in realisation of its socio-economic goals would be predicated on the progress that Pakistan was ready to make in its own economic reform. This has been on the agenda before, but Pakistan must bite the bullet now,” said the EU.
Secretary of State Hillary Clinton, on her part, re-affirmed US commitment to continuing its support to Pakistan in realising its full development potential, but also made it clear that if American taxpayers were contributing to this process, the rich and the affluent in Pakistan also had an obligation to join in this process. They must be taxed, she urged. Foreign Minister Qureshi was seen nodding in full agreement. There is nothing unusual with this suggestion.
What the messages from both meetings meant was that although there is no hard and fast conditionality between aid money and reforms, taxpayers in donor countries need reassurances that their money is not being wasted or misappropriated. In fact, the very concept of foreign aid is predicated on mutually convergent obligations of donor and recipient countries inherent in their political, economic, military, moral, social and now strategic priorities. Even the famous Marshall Plan had its delivery-based benchmarks to ensure the requisite oversight and accountability.
What we are being asked for is good governance through administrative, fiscal and institutional reforms that ensure economic discipline through transparency and accountability. These are fair demands. We must put our house in order. Austerity is the name of the real game. We need to reduce the size of federal and provincial cabinets, and eliminate the state-funded perks and privileges, especially the facility of official cars and petrol charges to public office-holders. An appropriate amount could be paid to them as transport allowance.
It is time for tightening of belts to reduce governmental spending and borrowings, controlling inflation, rationalizing GDP targets, restoring macro-economic balance, banning non-essential imports and luxuries, and reviving industry to reduce the trade gap. No more rental power stations. We should instead encourage the private sector to form their consortiums for installing power units to run the countrys industry, thus releasing the load on the public sectors national grid for general consumers.
Our country’s peculiar socio-economic and political culture, based on feudal and tribal structure, high rate of poverty and illiteracy, and inequality of wealth and power are symptomatic of a lopsided situation that warrants the beginning of an end to the current socio-economic disparities and political exploitation of the people by the privileged few of our country. No other country is familiar with the practice of forgiving, as a matter of rule, the elite loan-defaulters and the known highly privileged plunderers of the national exchequer.
Our main problems are those of pathetically poor governance, absence of the rule of law, endemic corruption, and erosion of governmental credibility. There is something fundamentally wrong with our patterns and standards of governance. The national integrity system and its institutional mechanisms including its judicial structure inspire no confidence among the people who are suffering the worst-ever hardship in their day-to-day lives. With ninety percent of the police detailed for VIP security, common man is left with no security cover. There is no law and order in the country.
Pakistan is today the classic example of ingenuities for bribery, exchange of favours and illegitimate perquisites. You scratch my back and Ill scratch yours is the common approach followed by public officials, be they parliamentarians or civil and military officials. Like two and three-star military generals, federal secretaries and provincial chief secretaries manipulated extra post-retirement benefits including residential plots, cooks and drivers at state expense. This plunderage must end.
The current IMF program for Pakistan, like the earlier ones, warranted addressing the governmental economic mismanagement and resultant macroeconomic imbalances through tightening of fiscal and monetary policies and ensuring a well-targeted and adequately funded social safety net. Its larger impact, however, should have accrued in terms of confidence-building to pave the way for similar loans from other bilateral as well as multilateral lenders including regional development banks.
Three years down the road, if anything, the governments trust deficit and credibility gap has only widened beyond repair. No one has faith in its policies or promises. The world has seen a tradition of broken oaths, dishonored commitments and breached pledges. No one is ready to give us funds, not even for flood relief, without an oversight mechanism and rigorous control. The IMF must have discovered that ours is a country with no political and economic discipline.
One had thought the IMF Standby Arrangements would bring some structural changes in our rotten system. The loans we are receiving were linked to stringent conditionalities and policy benchmarks including reduced borrowings and government spending and new taxes. But there is no sign of any change in governmental mindset. The governments financial managers have failed to evolve the needed homegrown economic recovery plans. They are all focused on foreign buck. But foreign loans and liquidity too will not help unless we ensure their proper utilization.
Let us opt for self-reliance. To do so, we must fix the fundamentals of governance, and restore our own credibility as an independent state. That should be our top-most priority and foremost strategy. We must increase our agricultural and industrial output, domestic savings and foreign trade. Law and order is essential to stop capital flight. The rulers must give up the Marco Polo culture and cut down on their foreign visits. No more World Economic Forums, no more state-funded Umra junkets. And no more blind faith in Friends of Pakistan. Let us be our own friends.
The writer is a former foreign secretary.