The implementation gap


It’s one thing formulating reform packages that suit our current economic and governance problems, but getting relevant authorities to implement them is another matter altogether. We have numerous short and long-term plans in place, approved by parliament and the cabinet, yet there is little to reflect government seriousness in going ahead with them. In addition to our nine-point-agenda of economic reform, there are tax machinery restructuring, public sector enterprises overhaul and energy sector recommendations, all of which have cabinet approval. That these steps are neglected despite the pressing need for an economic turnaround is troubling.
Government actions must immediately communicate that the time for talking and planning is behind us, and aggressive implementation of essential plans is to follow. So far strategies have fallen short of tactical execution because they are designed to break the prevalent status quo that is largely responsible for our economic stagnation. That proposed steps will ruffle some feathers in our systemic hierarchy is obvious, hence the recurring bottlenecks. All that is wanting is for the government to muster the requisite political resolve, and considering the present year’s targets, it has precious little time.
We need to incorporate fundamental changes in the way we do business, especially at the government level. To improve governance and government institutions, we should invite specialised agents of change from outside to act as catalysts. In my opinion, this exogenous expertise should initially be directed towards the most pressing issues confronting our economic managers.
First and foremost, the tax machinery needs serious overhaul, not the least because this year’s ambitious revenue targets depend overwhelmingly on a credible tax-net expansion. A few, specialised agents of change should be hired for targeted improvements and vibrancy in the FBR. As things stand, the tax structure needs parallel revamping – on the federal and provincial levels.
If the FBR’s tale of woe is not bad enough, the provinces have yet to make any visible efforts that reflect responsibility in accordance with increased revenues made possible by the 18th amendment. The country simply cannot afford any further procrastination on taxation issues. It is pertinent to remember the restructuring of HBL and UBL. There was little hope of blocking the billions hemorrhaging every year while they were run by the government. By inviting expert agents of change from the outside, we were successful in revamping both institutions, turning them into revenue generating entities. The rest, as they say, is history.
At the risk of repetition, similar efforts are now required in the case of sick public sector enterprises. I have often stated that the need of consolidating them under a holding company mandated with surgical turnaround and privatisation cannot be stressed enough. This company should comprise both loss and profit making institutions. Its chairman should ideally be a respected private sector professional, reporting directly to the prime minister.
The aim should be economic turnaround followed by selling strategic shares and transferring management control to the private sector. Profit making institutions should be similarly privatised. The entire exercise need not take more than four to five years, after which the holding company should self-destruct. The government will still retain significant share-holding and subsequent performance will be essential for government dividends. Failing this extremely crucial measure, there is no way of halting annual loss of billions which cramps the government’s fiscal space.
The government must also give serious consideration to proposed austerity measures. Though budgetary impact will be marginal, it will project a positive image for the public at large, which is burdened with constant belt tightening. Once the government is seeing trimming its excesses, the public will not be too reluctant to follow. Some actions send very loud signals, and this is designed to be one of them.
Lastly, the government machinery has to change the way it does business. The national commission for government reforms, as recommended by the able Dr Ishrat Husain, is the right direction. Now the time has come to pull our act together, a necessity that has already been put on the shelf far too long. It is in the government’s own interest to become proactive. Failure means not only chronic economic stagnation, but also electoral tragedy. The next election will come shortly after next year’s budget announcement. Falling short of ambitious targets will prove to be the Achilles heel of the present dispensation.

The writer is a former finance minister