Saturday, 30 January 2010

Social Capital in Pakistan

Pakistan is a society that seems to have lost self confidence and self esteem. Opinion pieces are beginning to recognize that what is driving us to failure may lie deep in some intangible factor in ourselves and our society.

Shafqat Mahmood writes in a column entitled, “The absence of morality” (Jan 29, 10)

“We are a deeply religious people. We even have it in our Constitution that no law would be made that is not in conformity with Holy Quran and Sunnah. And we don't just leave it to a verbal commitment. The attendance in mosques for prayers and at other religious occasions is large and growing. And yet, how do we explain this moral vacuum within?

Morality is a luxury in our society. Pragmatism a necessity.”

Ayaz Amir writes in a column entitled “A governing class which makes one cry” (Jan 15. 2010)

“Odysseus would have had to revise his understanding of patience were he to have undertaken his voyages in the salubrious climate of the Islamic Republic. Adversity and facing up to it are part of the human condition. But the consistent ability to make simple problems worse and invent new problems all the time is a distinction that sets us apart from many other countries in what used to be called the Third World.

RAW and Mossad in their wildest imagination can't do to us what we are capable of inflicting on ourselves.

We just can't get things right and governance or the administering of things seems to lie wholly beyond our collective ability or our collective endeavours. Yes, we face a tough situation that would have taxed all of Odysseus's cleverness to fix. But what explanation for the collective death wish which seems to afflict our governing class, from one end of the spectrum to the other?”

Many countries have become failed states despite many attempts at modernization, economic aid and all manner of nifty economic policies. Learning from these failures, several important thinkers have been turning to new concepts such as “social capital!” We are all cognizant of the importance of physical capital—factories, roads, construction etc—and our current measure of investment in national accounts only measures this form of investment. “Human capital” is also now very well known but often thought only of schooling and measured purely in terms of years of schooling or numbers of schools with very little measurement of quality. The third from of capital –social capital—is little understood, very difficult to measure and not easy to rigorously define. It has been defined by Fukuyama as 'Social capital can be defined simply as the existence of a certain set of informal values or norms shared among members of a group that permit cooperation among them.' Putnam defines it as 'features of social organization such as networks, norms, and social trust that facilitate coordination and cooperation for mutual benefit.'

To me what most Pakistanis are talking about is a sharp erosion of social capital in Pakistan that most of us have witnessed in our lifetimes. Increasingly we lament lack of trust or loss of a moral compass or the inability of Pakistanis to cooperate.

To look into this issue I recently conducted a small survey among Pakistani immigrants in Dubai. These are mostly poor people who have migrated under very difficult circumstances to escape poverty and lack of opportunity at home. They represent the poor but enterprising Pakistani who has shown the ability to understand an seize a migration opportunity often at considerable cost and hardship. The sample contained people from many different backgrounds (taxi drivers, waiters, shop assistants, clerical employees, etc) and form all provinces in Pakistan (Sindh, Punjab, Baluchistan and Pushtun). They go to Dubai without families and save about 90% of their earnings to remit to their families. For 30 years, Pakistan has been using these remittances to sustain an otherwise unsustainable exchange rate and Balance of Payments situation.

To me the views of this fairly representative but entrepreneurial Pakistanis is very informative of how the best of Pakistanis are thinking of our society.

Social Capital: What ordinary folk think

(98 immigrants Dubai)

Proud of being Pakistani

16

Pakistanis at Fault

72

Work together

22

No trust

69

Faith in state

12

Faith in leadership

7

Pakistani education valuable

19

If this data is to believed, people have lost national pride and have little faith in the government, the state and the leadership of the country. But what is more worrisome that Pakistanis seem to lack trust and the ability to cooperate and work together. The lack of pride in being Pakistani seems to come from this consistent lament that I heard that it is our fault that we cannot find better leadership and better governance.

As a side note many of these immigrants had received a number of years of Pakistani schooling in government schools. They were very critical of that education often saying that it was a waste of time.

I would love to hear your own personal observations on Social Capital in Pakistan.

Friday, 29 January 2010

Those Filthy, Non-Transparent perks

My email has been inundated with messages that contain the following.

"Govt. Concessions for a Member of NATIONAL ASSEMBLY (MNA)

Ø Monthly Salary : Rs. 120,000 to 200,000
Ø Expense for Constitution per month : Rs.100,000

Ø Office expenditure per month : Rs.140,000
Ø Traveling concession (Rs. 8 per km) : Rs.48,000 (For a visit to ISLAMABAD & return): 6000 km
Ø Daily BETA during Assembly meets : Rs.500
Ø Charge for 1st class (A/C) in train : Free (For any number of times all over PAKISTAN )
Ø Charge for Business Class in flights: Free for 40 trips / year (With wife or P.A.)
Ø Rent for Govt.. hostel any where: Free
Ø Electricity costs at home : Free up to 50,000 units
Ø Local phone call charge : Free up to 1,70,000 calls
Ø TOTAL expense for a MNA per year : Rs. 32,000,000
Ø TOTAL expense for 5 years : Rs. 1,60,000,000
Ø For 534 MNA, the expense for 5 years :
Rs. 85 , 440,000,000 (more than 800 Korores)

And they are elected by THE PEOPLE OF PAKISTAN, through a democratic process of this world, not intruded into the assembly on their own or by any qualification.

This is how all our tax money is been swallowed and price hike on our regular commodities...
Think of the great democracy we have............... "

I cannot swear to the accuracy of these figures. They do however point to a problem that I have been writing about for decades (several past posts and elsewhere) that PERKS ARE AN INEFFICIENT AND NON-TRANSPARENT MEANS OF PAYMENT. As a matter of policy the government should monetize all perks.

I will write more about this soon. But meanwhile digest this wholesale loot of the country through perks and rally against them.

Tuesday, 26 January 2010

Beggars vs Doers: What Aid dependence does!

The Nation noted the following plea from the Pakistan government today


“Foreign Minister Shah Mehmood Qureshi has said Pakistan though facing several challenges offers vast opportunities of investment, which should be highlighted before the world. Talking to media during the Friends of Democratic Pakistan moot in Dubai, Pakistan foreign minister said the conference has been organized to attract the corporate sector towards investment in Pakistan.”


This plea needs some footnotes

  • 1. Note the conference is being held in Dubai because Pakistan is considered too dangerous for investors to go to.
  • 2. Interpret the plea as we will do nothing for ourselves. We will not change our lifestyle; let the foreign investor bring in money so that our bad habits can continue.
  • 3. This charade has been played out by all our governments from Ayub to now.
  • 4. This is the year 2010, and our government continues to use tools from the 1960s: donor conferences, friends of Pakistan

Meanwhile the fishing village Dubai that was not even on the Map when Pakistan was holding its first investor conferences has

  • 1. Built the tallest building in the world
  • 2. Has become the Hub of Asia and Africa
  • 3. Has become a tourist and shopping destination

While Pakistan is struggling with fundamentalists and begging for aid Dubai today announced a new race track.

http://gulfnews.com/sport/horse-racing/big-thumbs-up-for-meydan-race-track-1.571215

It might be wise for our ministers to go home and do some serious work instead of continually begging.

Friday, 22 January 2010

Abolish perks, they are costly

For about 20 years I have been arguing that the path to true reform in Pakistan will open up with the abolition of perks. The reason being that the current incentive system for government officials is perverse where perks are valued higher than performance. Moreover perks are wasteful.

Today Daily Times carried the following information on the waste associated with perks proving my point.

"GOR I, II + III, IV, V, VI equals Rs 150m in home improvement

* GOR III, IV, V, VI file applications for work likely to cost Rs 51.4 million

By Anwer Hussain Sumra


LAHORE: The Punjab government has been sent 127 requests by officers who are residents of Government Officers’ Residence (GOR) III, IV, V and VI for renovation, alteration and repair – work that is likely to cost Rs 51.4 million – at their official residences, according to sources.

The requests were sent following the lead of GOR I and II residents – who have filed applications for work that is likely to cost Rs 98 million. Judicial officers, District Management Group (DMG) officers, police, doctors and teachers – serving in the BS 17 scale or above and appointed to key slots – are allotted residences in GORs according to their entitlements.

There are 161 ‘A’ category residences in GOR I; four ‘A’ category, 81 ‘B’ category and 36 ‘C’ category in GOR II; 114 ‘B’ category, 105 ‘C’ category and 162 ‘four-room’ category residences in GOR III; 180 ‘C’ category and 60 ‘four-room’ category residences in GOR IV; 100 ‘B’ category residences in GOR V; and 29 ‘B’ category residences in GOR VI.

Following the 121 requests sent by residents of GOR I and II, the sources said 68 requests have been filed by GOR III residents for renovation, tile fittings, marble flooring, tuff pavements, aluminum windows, alterations and wooden cabins in kitchens, wardrobes in washrooms and fences. Work on these requests is likely to cost Rs 28.22 million to make the residences suitable to lead comfortable life, the sources said.

Meanwhile, 26 applicants from GOR IV have asked for Rs 4.7 million for renovations and alteration at their houses. A total of 28 officers from GOR V have asked for Rs 16.83 million for work to improve their residences.

The sources said that while the residences in GOR VI were built in 2003 and 2004, five officers had filed requests for work that would cost Rs 1.6 million.

A number of officials living in other government colonies in the city complained that development funds were being utilised to “satisfy the desires of GOR officers with authority ... while officers in other colonies don’t even have basic facilities”. They said funds were being used for the GORs because “that is where the authority is”. They said those living in GORs were filing applications for “colossal sums of money” at a time when the provincial government was trying to overcome a financial crisis."

DT Jan 23 2010

Sunday, 17 January 2010

Constitutional reforms for better democracy

In Pakistan with or without elections, the status quo of rent-seeking elite through degenerated colonial institutions continues.

Soon after any change whether elected or through a coup, our leaders begin power plays, VIP pleasures, and of course amassing personal fortunes.
It seems to me that democracy needs to be strengthened. And this can be done through a better design of a constitution.

Democracy is obtained though a system that balances and distributes power so that the community at every level controls lawmaking and the administration, execution and adjudication of laws.

Surprisingly dysfunctional governance has not produced an informed body of knowledge on constitutional reforms. By default the army and the politicians are left to think up constitutional amendments. Both of whom are neither equipped to think nor are their incentives aligned with increased democracy. And we have seen the mess they have made of the constitution.

Perhaps, it is time civil society carefully looked at the design of democracy.
Currently, our system seems to be producing anything but democratic governance: a fragmented individualized political parties lacking ideas and expertise; incumbent governments running roughshod over parliament, provincial governments, and even the financial system; legislators with neither the skills, nor the inclination for legislation merely rubber stamping executive proposals. Often even a quorum in parliament is not achieved! The judiciary that has been compromised more often than politicians and dictators have read a book. Meanwhile, corruption has been increasing and law and order (security of life and property) declining.
It seems to me that new rules are required that allow capable people to come forward, and induce them to behave in a manner consistent with their mandate.

I am sure our learned political scientists and other thinkers can come up with alternative proposals for strengthening or institutions. Here I outline some obvious ideas for constitutional reform to hopefully generate some interest in this neglected area.

One starting point could be limiting government patronage possibilities. One initiative could be limiting the size of the cabinet would also limit political deal-making. Governments use to cabinet positions to purchase legislators. The creation of a ministerial position should require parliamentary review as it requires expenditure of resources.
In the same vein the idea of the Prime Minister keeping key positions such as the Finance or Defense for his or her self would also be outlawed. That is just too much concentration of power.

Independent and autonomous institutions are an important check to the power of the executive. Legislature, regulatory bodies, watchdog institutions and the judiciary must be totally independent of the executive. This independence must be jealously guarded and maintained by independent boards to prevent capture by the executive. The Prime Minister or the president must not be the sole appointing authority for all key positions of responsibility in such autonomous agencies. By the same token bureaucrats should not serve ex officio on boards of independent agencies.

Why should all judicial and senior civilian appointments (secretaries, IGs DIGs etc) not be reviewed by the senate or open committee to ensure the fitness of a candidate for the position? A review process examines competency and the moral character of candidates. It also puts all on notice that they are not merely beholden to the executive.
The term political party could be better defined to prevent ego-cults. Clearly parties should a known policy program, large national membership, and well-defined internal governance structures (such as periodic internal party elections and open party conventions). Perhaps minimum voter support by some registration process could be required. Parties could also be required to pledge rather a large deposit before election. This deposit would be forfeit if a minimum number of its candidates are not successful.
This brings us to campaign finance where we have no guidelines in Pakistan. It is commonly known that some candidates bought their way into parliament. Why not limit campaign finance or tax visible campaign funding.

All candidates and all parties could be required to maintain open accounts for life. Their tax returns and any direct and indirect financial interests should at all times be public information.

Candidates, especially the successful ones, must show an acceptable distance from any business interests that they might have. It has always amazed me why when making ministerial appointments, why we do not look at potential conflicts of interest. For example why are industrialists appointed as commerce and industries ministers?

Much of the antagonism in our politics arises from the monopoly on power and patronage by the party in power. Ways can be found for the two parties to cooperate. For example, key appointments regulatory bodies and judiciary could be made by bipartisan committees. A glaring example could be PEMRA the workings of which would be enormously improved if it were run by a bipartisan committee. Of course the information ministry should go.

Many countries have experimented with mandating term limits (for all offices including tenures of MNAs and MPAs) to allow new people and new ideas entry into the system. In Pakistan where the electorate is beholden through feudal and other relations, term limits could be useful to ensuring that turnover among politicians. Or for that matter why should there be a 5 year term and both federal and provincial elections held together. A shorter term (say 3 years) and staggered elections (provincial elections midway into the term of the national government) would be more of a check on the executive.

We have not even begun to consider alternative election design mechanisms (say proportional representation). We could also consider a greater use of referendums directly to the population on key issues. And of course NRB decentralization initiative needs to be strengthened.
Ideas such as these need to be seriously considered to design a constitution for inducing good leadership. Unless we develop a vigorous debate on constitutional reform, the subject will be left to self-serving machinations of bureaucrats, politicians and generals.