Governance, government and governor. The 3 G syndrome has become almost mutually exclusive. The country is a prime case study of a government existing without governance and its major functional institutions becoming dysfunctional. Look at Karachi and you see a state in the state of orphanage where nobody is taking responsibility of the gang war going on unhindered for the past so many months. The police is helpless, the establishment invisible and the leadership busy tearing the opposition apart. In all this march to destruction the natural casualty is the economy. Karachi being a commercial hub, according to some estimations suffers a loss of anywhere between 5 to 10 billion rupees any time there is a breakdown.
Such a loss for a running economy is unbearable, but for an economy that is teetering on bankruptcy, it is almost fatal. However, the people running the economy are so used to living day to day with total blindness to the future, that they have no qualms on the dire impact of their reckless spending. That in fact has been quoted as one of the main reasons for the governor of state bank resigning. Three years and three governors just tells the story of horror prevailing in the monetary management, or to be exact, monetary mismanagement of the country.
The state bank has been one institution that has been held with the highest esteem by the banking sector, the government and global financial institutions. Dr IshratHussain’s term as a governor saw the state bank really becoming a strong and professional pillar of the economy.
While the whole world and especially the banking and financial sector in America and UK nose-dived in the recent recession, Pakistan’s financial sector remained steady. The credit for this strength goes to a very vigilant and diligent state bank that has played an excellent role of governance by acting as a regulatory body to streamline the sector. The state bank’s role on reporting policy direction especially in an economy like Pakistan which is going through the strange phenomenon of low growth and high inflation has been very crucial. However the last few years have witnessed its ability to convince the government on abiding by the direction recommended by it really getting nowhere.
The government was not happy with the present governor over the tight money policy leading to increased interest rates. The state bank felt that the spiraling inflation could only be controlled if the interest rates were raised. The rising inflation was caused not only by the rise in energy and oil prices but by the huge government borrowing and the daily printing of nearly Rs2 billion notes to fulfill the unending government appetite for more money. Printing money is like bringing in counterfeit notes in the market, as they are not earned, exchanged in return of some good sold or service rendered.
The government so fond of everything fake from degrees, to votes, to notes does not realise that this printing of additional money will reduce the value of money and thus spike up inflation even more. Under such circumstances it is almost impossible for any governor with some integrity to continue doing a job he knows fully well is not going to yield the desired results.
It is a misfortune for the country that men with great caliber and expertise who want to contribute to the country are lost to the arrogance and indifference of men in charge. The ministry of finance has seen ShaukatTareen resign and Hafeez Sheikh struggling to do his job with complete sincerity and effectiveness and the state bank becoming an annual retreat of competent people who come in with all enthusiasm and exit with a cynicism bred by the claustrophobic culture embedded in every institution run by a government bent on squeesing every ounce of vitality and integrity present in any individual or institution answerable to them.
The brain drain from the country has been an old problem and the brain destruction from institutions is a development fast leading to fragmentation of policies and paralysis of decision-making. The heads of most institutions be it PIA or Pak Steel are people whose only claim to fame is that they are cozy buddies of the higher ups. With little or no competence and an abundance of arrogance and ignorance they ensure that they bring in people whose level is even lower than them to make these leaders shine out in comparison.
Thus starts the whole vicious circle of the horrible decline in standards, performance and values. The corruption in the state enterprises is now a documented fact with the public accounts committee giving factual evidence of the extent of fraud and misuse of public money and offices going on everywhere. With this state of affairs in the country the purpose of having a state to run this country becomes meaningless. For a country to develop, its institutions must be supreme over individuals, and for institutions to develop, the best men of competence and character are a pre requisite. But if men at the top do not possess these characteristics, men below who do have them will eventually find themselves stranded, cornered and ousted.
The writer is a consultant and CEO of FranklinCovey Pakistan and can be reached at [email protected]
