Friday, 26 December 2014

Proposal for a High Level Commission for Understanding Extremism and terrorism


High Level Commission on Understanding the roots of fundamentalism and Terrorism

Terrorism has been growing over the last decade or more and has now with the Peshawar incident reached levels where there is a broad consensus that it represents an existential threat to Pakistan. The roots of terrorism largely lie in growing fundamentalism in society.  Over the years, Madrassas have mushroomed, sectarianism has increased, and radical mullahs have appeared on the pulpit as well as the media to shift the national discourse increasingly toward a narrower definition of Pakistan and Islam.

Pakistan’s centrality to global and regional conflicts has also fueled fundamentalism, involved the country to the war on terror and weakened the state. Continued aid and oil dependence too has on occasion forced Pakistan to align itself with radial views on Islam. 

Meanwhile, political instability, weak governments and long standing fiscal difficulties have weakened state capacity to the point that its monopoly on violence is seriously challenged. State intuitions have eroded significantly requiring the army to take over many key civilian functions from time to time.

Pakistan has a young population –50% below the age of 21—which policy has largely forgotten except as an occasional handout exercise. Education system is hugely inadequate in the supply of both quantity and quality. Opportunities are scarce as job creation is way below potential. Disaffected youth is turning to crime, fundamentalism and even terror.

The weakened state appears to be captured by the radical elements in society as it gives in to their demands on ‘who is a Muslim, blasphemy, and even YouTube. Extremist clergymen control the dialog on Islam with little role of the state despite a large religious ministry and Auqaf departments.

While we are all reacting to this existential threat with the army leading a military effort to deal with the violence and the politicians coming together to present a political united front to this threat, it is imperative that we understand our state and society and its interaction with fundamentalism and terror and find lasting solutions to evolve our country into a peaceful prosperous future. 

The issues mentioned above are continuously being discussed in the media and even households in a search for a solution. 

In such situations, countries often out in place an independent, objective and expert commission to carefully conduct deep investigations through research as well as widespread consultations. Examples of such commissions are the 911 commission in the US and the Butler Review of the weapons of mass destruction in Iraq.  Such commissions are well funded, comprise of credible and notable people, and staffed by very competent technical experts and are given ample time to do their work. 

We did put in place an Abbottabad commission after the killing of Bin Laden but have refused all follow-up as the report has not been released. 

It is important that the commission is part of a process that must be followed. The report has to be made public and discussed by parliament. Needless to say, members will be careful to not divulge any national security issues except to the requisite quarters. But a widespread discussion of the report and its recommendations will allow the government to move on to taking steps to deal with the issue of terror.

A possible TOR for the commission would be

The Commission will examine:

1       The evolution of extremism, fundamentalism and terrorism to understand its historical origins

2       The evidence on terrorism to understand its socio-economic and geographic causes.

3       The nexus of extremism, fundamentalism and terrorism

4       The state’s role and response to the response to the challenge of extremism, fundamentalism and terrorism

5       The role of the private sector in funding and fueling extremism, fundamentalism and terrorism

6       The role of NGOs and their financiers in the development of extremism, fundamentalism and terrorism

7       Societal sentiments and opinions as seen in polls and surveys on the issue of extremism, fundamentalism and terrorism

8       Politics, political parties and extremism, fundamentalism and terrorism

9       State institutions and extremism, fundamentalism and terrorism

10    Law, courts and their capacity to deal with extremism, fundamentalism and terrorism

11    The education system, community and regionalism in the development of extremism, fundamentalism and terrorism

12    How  our police, security and intelligence establishment has dealt with the issue of extremism, fundamentalism and terrorism

The committee will then seek to outline policy options

1.      Reform of the state institutions such as the civil and security services

2.      Legal and judicial reform

3.      Regulation and management of the religious establishment in keeping the dictates of Islam

4.      Monitoring financial flows for religious organizations.

5.      Reform of education, public service delivery as it pertains to the issue of extremism, fundamentalism and terrorism

6.      Policy changes that government could undertake for dealing with the threat

7.      Develop a plan for government to lead a wider discussion for the implementation of the report

 

Who will serve on Commission?

Say nine people

Judge

Police

Bureaucracy

Professor

Private sector

Citizens

Media

Lawyers

Economists

Of course some regional and gender balance will have to be borne in mind

 

Staff

At least 9 young competent professionals from roughly the same mix as members.

This secretariat will maintain all paperwork, keep minutes, write drafts and contracts etc.

Time Frame

A year at least and if required up to 2 years!

Monday, 22 December 2014

The Maulvi is a bureaucrat; Why Treat him Differently?

If a system such as this is developed, it will soon fall in sync with the aspirations of us ordinary Muslims who find no incompatibility between our faith and the modern world.

If the government is serious about eradicating fundamentalism, it must give incentive to the maulvi.

This is how it works. For the last four or five decades, global and local forces have offered all manner of incentives to the maulvi to develop a radical and fundamentalist version of Islam. Now if we want the maulvi to change, a new system of incentives has to be developed.

The government is regulating every market and profession except the mosque and the maulvi. The maulvi continues to operate freely and frequently not in the interest of the public. The possibility of a foreign hand manipulating the maulvi is always under popular consideration. Fundamentalism has been fuelled mainly because this whole mosque-maulvi enterprise is being led by the unenlightened and they are easy to manipulate by forces that seek to retard Pakistan's path to modernity.

Currently, the maulvi has no master other than the vaguely defined politico-denominational organisations they might adhere to. No license is necessary to set up a mosque. The ownership and management of mosques is not regulated.

The community that the maulvi and mosque are supposed to serve has hardly any say in the running of the mosque or the behaviour of the maulvi. Neighbourhoods cringe when the maulvi misuses the loudspeaker to say things that they may not agree with. They have no say in how loud, for how long, and when, he can turn on his loudspeaker. They certainly cannot expect any human sympathy or forgiveness from the maulvi. He is there only to scare them and interpret Islam very narrowly.

Unlike the early days of Islam, the mosque is no longer a community place. No learning activities take place there. No seminars, no birthday parties or weddings can take place there. The maulvi uses it virtually as a personal domain.

We must change the system of managing the mosque and managing the maulvi to make this combine more responsive to the community if the objective of enlightened moderation is to be achieved.

If the maulvi wase somehow bureaucratised into a hierarchy that could control and incentivise his thinking, we would be closer to moderation.

Consider a system of mosque and maulvi regulation based on the following principles:
All mosques, when built, should be publicly owned and subject to a system of community control.

Defined areas to be served by the mosque would elect a mosque committee to run the mosque and define and appraise the work of the maulvi. The case for another mosque in the mosque area should be very carefully made. The use of a loudspeaker should be carefully regulated for Azan only and loud enough only to cover the mosque area gently.

Community uses for the mosque should be clearly defined. Learning activities at mosques should be actively encouraged.

A hierarchy of mosques should be developed on the basis of size and the area that they serve. Smaller mosques in the area of larger mosques should not be allowed to use loudspeakers and should have very confined roles for serving tightly knit communities on a personalised basis. The larger mosques should have libraries, internet access and learning facilities. All mosques should display a learning calendar based on professional seminars and training delivered by professionals in the community. The maulvi's performance should include the development and management of this calendar.

The profession of maulvi should be organised such that there are professional standards and peer and community review. The following principles could be useful:

Entry: Maulvi should only be allowed to enter the profession on the basis of competitive exams. Ideally these exams should test for knowledge of Islam, comparative religion, humanities, and social science.

Career: To graduate to managing a bigger mosque, knowledge of English and ability to use the internet should be considered necessary. The maulvi should be ranked and graded and should have clear guidelines for promotions. The mosque committee must every year write a performance report of the local maulvi while the district Auqaf head, who should be a member of the maulvi service, would write another. The maulvi should have a maximum tenure of four years in a mosque. An Auqaf council, made up of the senior-most maulvis who have been promoted within the system after having served in many positions, should manage the whole system.

Peer and community review: The maulvi should be encouraged to publish selected sermons as well as his personal research in journals that should be created for this purpose. Debates should be encouraged. The community, the maulvi profession and especially the Auqaf council could occasionally highlight the best sermons and research and use these as an element in the evaluation of the maulvi.

Fatwas and other religious injunctions: In this system, then, fatwas and religious injunctions cannot be initiated by any maulvi. These will only be issued by the Auqaf council with adequate review by the council and the senior layers of maulvis.

Sectarian concerns: The constitution of the Auqaf council would have to be such as to allow some sect-specific issues to be referred only to the members of the council belonging to that sect. No sect big or small should have the feeling that it is losing out to a tyranny of the majority.
If a system such as this is developed, it will soon fall in sync with the aspirations of us ordinary Muslims who find no incompatibility between our faith and the modern world. Our community will also develop as it gets more integrated through a system of mosque management that helps learning and skill development.

Most important, our youth will be the biggest gainers as they benefit from the community mosque that promotes skill development.

Thursday, 18 December 2014

Understanding the APC


So we had an APC in Peshawar to deal with the terrible tragedy of the school attack. And by the commentary following the APC it was largely successful especially for the incumbent government. Nawaz Sharif who has not looked like a Prime Minister for months now especially after the Dharna looked quite content and Prime Ministerial.

“The refrain of Parliament is the forum for dealing with state affairs” used often in the Dharna was forgotten and the APC was used to get Imran Khan into a room and use that occasion to develop the image of a “Prime Minister in charge.” Why not Parliament now?

Who was invited and why? Do they have security clearance? How were they chosen?The photograph of the APC shows that these questions were not clearly considered. It was left up to parties and indeed the clever people to wheedle their way in to photo ops to be seated at the table.

How was the meeting conducted? What kind of discussion took place? Was their a briefing by the Interior Ministry, the Army, Intelligence, few if any know. Most likely not. Indeed in such a large crowd with little serious whetting let us hope not.

It was clear by the opening remarks of the PM that there had been little preparation for the meeting. On a momentous occasion such as this the PM should have read a prepared statement that outlined some initial thoughts towards a policy to galvanize a meaningful discussion. Instead we got a few adlib meaningless remarks.

Was there an agenda? Policy options? Plans? We watched carefully for the PM press conference after the meeting so that we could hear a thundering momentous declaration. All we got was 'we all agree terrorism is a problem and we will now form a committee to give us a way forward'. It is easy to see that there was no agenda, no thought and no serious discussion.  

No heads rolled. No marching orders given to the security forces to “bring back their heads”. No prices on heads of known terrorists. No curbs on the madrassaahs and the mullahs preaching violence. No summary process for dealing with terrorist cases. No implementation of harsh justice for the hate-mongers. No rollback of legislation and institutional developments that have brought us to this pass.

They put in place the usual commission made up of politicians to give us a plan with no expert back up. 

Would it not have been better to give us a longer term commission made up of serous civil society intellectuals to give the nation a serious analysis of this immense issue. 

911 commission comes to mind where several former politicians of stature combined with several intellectuals in a well funded process over 2 plus years to conduct hearings and investigations produce a report. Why can this not be done here. After all the issue requires deep analysis.

The meeting was however successful as most commentators and columnists were happy with this. Government got what it wanted a 'photo op' and an end to the criticism it was receiving. No wonder the PM was in a jovial mood despite the somber occasion and cracked a very bad 'point scoring' joke: “if I was not going to the hospital, I would be going to the Dharna with Imran Khan.” Yet he received no blowback from any of our pundits. But it was distasteful!

Surprisingly our parliament is not even scheduled to meet.

Then there are those who love to give our politicians an out by saying what can they do the decisions are with the army. Well with such unimaginative and unprepared leadership, let us be thankful that the army is there.

Well now we can go back to normal mega projects and borrowing which is what governance is to these people. No need to think, legislate or manage issues.


Judge for yourself what did we achieve in the APC!

Thursday, 27 November 2014

End Austerity Policy

Our macroeconomic policy stance is and has been seriously wrong for a long time. Time we seriously reviewed it.
We have been chasing the chimera of fiscal adjustment most unthinkingly. In the bargain we have killed growth, governance, public service delivery and perhaps even the state. Let us see how?

Consider an economy where economic growth has slowed down and large fiscal deficits have led to a growing debt stock and balance of payments difficulties.  No doubt such an economy needs adjustment. The question is how?

Several options are available.

The best approach is to address the fundamental causes that have caused the slowdown in the economy. Often the source of the economic difficulties is deep-seated structural issues such as a bloated government based on poor expenditure choices and a poorly developed mismanaged public sector enterprise sector, poor market regulation, low quality of governance and regulation that drives up the cost of doing business, and several legal rigidities that prevent flexible movement in resources from low to high return activities. Deep, painstaking and carefully researched reform is necessary in such cases but could require time and resources if it is to be done well.  Moreover, this reform does have its own political costs and benefits. Often the beneficiaries are the masses in the long run. However the beneficiaries of the distorted system (lazy and perk-rich civil servants, public sector enterprise managers unions, monopolists with captured regulators) are more immediate to the government and have the resources and the muscle to delay the reform. As much as possible this path is avoided.
The preferred path is always to take the fastest possible route to debt and fiscal consolidation. To achieve this governments hastily cut expenditures and raise extraordinary taxes that could have negative growth and expenditure consequences.  This set of policies has now come to be known as “austerity”.
As Paul Krugman laments the Keynesian solution that we all learnt in our macroeconomic classes where fiscal policy was supposed to be expansionary in recessionary times and contractionary in good times is now ignored in the keeping with current austerity thinking.

In Pakistan, under the tutelage of the IMF, the approach that MOF has followed has been that of “austerity” at its worst. MOF to impress the tutor always chooses the fastest route to get to a deficit target of 4% of GDP. It hides arrears and expenditures, dries up funds to places where needed (such as education, development, railways services) and fixes overambitious revenue targets never meaning to keep.

MOF has to look after its brethren—the public servants. Their wage bill often with an increase has to be met even when expenditures are cut. And of course no one can be fired even if there is an acute redundancy.

Imagine the police budget being slashed by some percentage and then the whole system being put on slow release by MOF to meet its unrealistic numbers. Of course salaries have to be paid. Well then the operations suffer, as there is no budget for running patrols, doing drills, ammunition etc.

Over time, such “austerity” based policies depreciate capital that has been built up and impede renewal of necessary capital.  For example, necessary equipment for conducting operations becomes obsolete or is in short supply. Like Railways has engines standing but no money to maintain them. Like transmission lines are not maintained on schedule leading to increased line losses.

The important point to remember is that there are systems operating that provide public service. Arbitrary budget cuts as austerity demands erodes those systems with long-term consequences for governance and public service delivery. Eventually these eroded public service delivery show up in increased cost of doing business driving down investment and growth.

The austerity debate has raged in Europe for the last 5 years and even the IMF has now conceded that the pace of fiscal adjustment must bear in mind the cost t the functioning of the state and social contract.

MOF austerity policies have led us into a vicious cycle of incredible, unthinking, and poor quality fiscal adjustment, which in turn erodes governance and public service. Over time this slows down the economy destroying efficiency and even institutions.

Blaming the IMF is useless. Their response is that your government can to choose a better adjustment path. MOF can adopt the path of careful reform (first option) taking on the lobbies and put in process a sensible budgeting approach that will allow departments autonomy and sensible budgeting.

The tragedy is that the austerity policy along with postponed reform has so eroded government capacity that change is vertically impossible. We all know the government lacks the capacity lacks to think, research and develop the kind of policy and reform.

Sadly civil society also worries mostly about poorly determined austerity policy and has little time for debating deeper reform issues. There is much excitement about a missed fiscal number which in any case was projected on a false basis. But little thought us given to how MOF is killing public service delivery through bad budgeting.

Indeed it is time to rethink our economic policy stance.
  

Friday, 5 September 2014

Would you invest here?


Whether there is a Dharna, a flood, or a leaky Fawcett, ‘analysts’ are quick to point out economic consequences. When the flood of 2010 happened, the FM would sing this story of how Pakistan has suffered and the donors loved it. Their doleful expressions and our FMs heartbreaking story (meant to cover our policy failures) outdid Hollywood pathos in real time. Some donors actually pushed us toward the hyperbolic as their business thrives on country misery. Of course all the government wanted was more money to alleviate the pressure of hard policy decisions.
Now again we are counting the economic impact of Dharna ranging from 300 to 600 billion. Again all manner of hyperbole is being used to estimate this cost. With Nominal GDP at about RS.25 trillion, output per day is about RS 68 billion. Recent political shenanigans have lasted about 20 days. If the wole country stopped working for 20 days the total cost would be about Rs 1.3 trillion. Now think about it a few thousand people holding a circus in Islamabad, what percentage of national output could they affect.Maybe 2 or % at best! Could it be over 50% as some of these estimates imply?
Then there are those who say that somehow these events have increased the political risk and hence are going to hold up investment. Once again the desire to read the crystal ball and pronounce daily forecasts! I am sure many donor consultants will produce reports to justify such thinking.
One way to think about it is to look at the global competitiveness report that has just come out. This report was prepared before the Dharna and hence measures the state of the economy before it.
Would you invest in a country which ranks at 133 out of 148 with 1 being the best? If you look beneath the headline number, you find that in terms of property rights this country ranks number 123. Is your investment safe?
Look further and you find that violence ranking is even closer to the bottom at about 140 out of 148.
How is the government responding to this situation? Well it seems nepotism prevails with the ranking for that 130. Moreover the government is wasteful ranking at 116. And it provides a legal framework for business that ranks at about 112.
What about the macroeconomic environment and macroeconomic policy? Well the average of 5 indicators charted this country ranks at 127.
Even in health this country beats many African countries in terms of Malaria and Tuberculosis and their impact on the economy.    
Primary education quality and enrolment, the country ranks at 116 and 137.
The story does not change when we look at higher education. Kids are not being very poorly prepared for a highly competitive environment.
Markets are poorly developed with a weak regulatory regime and not favorable to competition. Entry into markets is not easy with high costs of setting up business.
Most surprisingly the country is not open ranking in the 130s on tariffs and trade..
Corporate governance does not look good with the Efficacy of Corporate Boards at a ranking of 123 and delegation of authority at 122.
If you are already losing interest and saying “this is easy, no one should invest here” you will be right. And this indeed is what both local and foreign investors are and have been saying for many years. Domestic investment has averaged 14% of GDP and foreign investment has averaged USD 1.6 billion.
This is the picture of Pakistan as it emerges from the very respectable Global competitiveness Report!
No short Dharnas will change this trend. Nor will investor conferences foreign visits and government pronouncements. Global rankings are available for all countries including Pakistan. All countries are being measured all the time. Investors –both Pakistani and others—are very sophisticated and go where the economy looks attractive as measured by such rankings.
Changing a countries ranking requires sustained good policy and reform by a committed government. Reacting to the event of the day is mere crisis management. Perhaps it is time that the government got to serious work building an economy with property rights, effective government, a market friendly legal and regulatory system, an open and competitive economy, a modern corporate culture, and an education system for the 21st century. Commentators also need to get away from daily crystal ball gazing and hourly pronouncements of aid to look at how to build an economy.
So when you see a donor consultant report quoting absurd figures for the cost of some recent event like a dharna or a flood, remember there are better uses of time and paper. Pakistan has not yet built a modern economy and no economy turns on a dime.
I dream of the day when Parliament will debate these rankings and determine a way out. Perhaps thendebates would be more meaningful and less personal and contentious.
As a footnote we tried with the Framework of Economic growth, but the donor-FM dance of funding and consultant reports was too distracting.    

Thursday, 28 August 2014

On saving democracy and Dharnas

Save Democracy! Save the Constitution!

The 2 Dharnas with all their dramas have generated a deep division in the Pakistan media and perhaps even society. One group (comprising of a strange amalgam of older left liberal activists, NGOs and the old guard politicians) continued to see the invisible hand (which never revealed itself) of the army and a potential coup that has not happened till the time of this writing. Another group (another strange concoction of some youth, TUQ followers, and some media celebrities) chased a confused idealistic vision of Naya Pakistan free of corruption and maladministration.

Unfortunately, the debate really did not get beyond name-calling, conspiracy-searching and crude personalized invective. Dharna crowd could not clearly articulate a vision that grabbed the population at large and overplayed their hand hobbled by incredible ultimatums and outrageous ‘Cromwellian’ demands to wind up parliament.

The ‘save democracy’ crowd on the other hand refused to empathize with some legitimate issues—such as electoral reforms, dynastic, personalized democracy, poor governance and corruption-- that the Dharnas raised. The spectre of ‘the boys’ manipulating the Dharna for a return to martial law was continuously raised to silence disaffection and to allow the system to continue.

‘Save democracy’ people continued to ask for the system to continue in the hope that many elections later it will self-correct. In other words, they have the patience to wait for the filter of elections work over 5 year periods. This might take decades. Perhaps even 3 or 4 generations of dynastic rule.
Strangely enough the leading proponents of the ‘save democracy’ mantra were youth from the Bhutto era now quite oblivious to their own disaffection with the 22 families but with a very strong memory of their aversion to dictatorship.
The Dharna crowd was supported at least initially by the youth that Imran Khan galvanized.  5 years ago in the Framework of Economic Growth at the Planning Commission we had pointed out the need for addressing the youth bulge which is going to be a dominant demographic for the coming 2 decades. The current system neither includes them nor provides them opportunity. In fact it even educates them at a lower quality than what was offered to the Bhutto Youth.
Sadly the ‘save democracy’ and the youth from the Bhutto era did not identify with the youth and offer them anything other than ‘have patience, in a few decades the system will work out its defects—maybe”
A moment for an inter-generational dialog was lost. Youth should have been given hope and leadership even if the Dharna leaders failed in doing so. Too much time was lost in focusing on the personality flaws of the Dharna leaders and not developing any understanding of the significance and meaning of the Dharnas.
The spectre of martial law like the weapons of Mass destruction in Iraq is now being used to quell even a discussion of reform.  The easy approach was to hang on to the refrain that ‘democracy is in danger’ and we don’t want another Martial law. What was coming out clearly was that people wanted change that would offer them hope. They wanted inclusion and opportunity. The current system of privilege does not allow merit to work. They felt that democracy should allow merit and it does not.
TUQ, IK and their personalities and absurd demands took up too much time and a possible reform moment was lost. But our ‘save democracy’ crowd too lost the moment. Their refrain was that democracy must continue with all its many wounds and lesions inflicted by our veteran politicians. The implication was that dynasties are all rights. Families have a right to high office and protocol. PM and ministers need not come to parliament which should be just a rubber stamp. Bureaucracy is the true and faithful ally in an executive that has usurped the spirit of the constitution. All agencies of government and several key ministries can therefore be left headless because trusted bureaucrats will deliver in the interests of the executive if not the country. Personalized and over-powerful government has thus been declared as legal by our ‘save democracy’ crowd.
Somehow these people see the military behind all the problems of Pakistan giving the politicians a large leeway for mistakes.  Another refrain is that democracy requires time and we must have elected governments completing their terms. We forget that we have had 8 elections since 1988 and the results have been more or less predictable. Furthermore it took not more than a year for the tarnish to wear off the elected government and everyone to wish that there was a way to put it behind us. Democratic governments spared no occasion to line their pockets and to weaken institutions of governance to favor the executive.
At no occasion did the democratic government think of making serious reform. Throughout the nineties, economic indicators continued to dwindle as the politicians lined their pockets, signed expensive giveaways such as the IPPs and went in for grandiose projects like the motorway.  When they returned in 2008, once again they continued the earlier tricks. Rental power, LNG deals megaprojects, roads and deals but no reform. SROs and commodity purchases that had been more or less abandoned returned in a big way.
Instead of reinforcing checks and balances, they immediately got rid of term limits and any checks on the PM. Local governments which might have allowed a fresh crop of politicians to be trained and which in any case are better for service delivery were rolled back and are seriously resisted. Even their own party members are kept on a leash as the leadership of parties rules through the bureaucracy and buy out their ministers through handouts.
The lust for power for suspicious reasons keeps our political leaders from making good appointments. In fact hey have a clear preference for centralization. BB refused to have either finance or a foreign minister. The current government keeps both the foreign and the defense portfolios weak.  The last PPP government could not keep a credible SBP governor. This government has failed to make appointments to NEPRA, PEMRA, CCP and many other regulatory bodies. Where they make appointments it is fairly obvious they were not looking for the most credible or the most competent. What happened at NADRA and PEMRA is not a testament to good management by democracy. In the name of democracy, public service and governance has suffered.
While the 90s were a period of overly competitive democracy where both sides tried to vilify the opposition, the recent period has become one of a level cooperation bordering on complicity, vitiating the parliamentary institution. For a serious democracy we need a vibrant opposition, not complicit in keeping no check on the incumbent government. A vibrant opposition would have pushed for an electoral test to break the Dharna stand-off rather than seeking to keep the government in power. The opposition played no role even in the registration of the FIR for Model Town. Surely this is not a parliament that keeps the executive on its toes.
If the democrats really got their act together and were not so hungry for power and money at the expense of governance, perhaps the room for Dharnas and ‘the boys’ would be limited. This is something that the ‘save democracy’ crowd will not even consider. Somehow giving politicians more room to establish their dynasties and financial empires will fix itself. Constitutional amendments that would strengthen democracy could be considered.
The shenanigans of IK and TUQ might have given us an opportunity to deepen our reform discussion. Perhaps we could have discussed and pushed for the kinds of reform that would strengthen democracy like instituting local government in an irrevocable manner. If nothing else this opportunity could have been used to found a narrative to reform.  It could have been used to move ahead with local government and less centralization by the PM and the CMs. Parliament and its role which has dwindled to no laws and minimal attendance in the last year could have come into focus.
With hindsight and distance, I think we will come to appreciate the 2 Dharnas despite all their follies. Hopefully, electoral and other issues crudely raised by them will take root. We seriously need a discussion on reform. And one important reform is the institutions of democracy that, right now, are too easy to hijack.  

Friday, 22 August 2014

Understanding Growth and Development

Understanding Growth and Development
Fundamentally what has preoccupied most of economic thinking over the centuries has been the question “how can living-standards be improved for most of humanity”. Answers have varied but the quest remains the same.
In some sense this has been an eternal struggle for mankind. Most religions have been based on giving us order so that human welfare can be maximized. Utopian philosophers have also developed visions on how to organize society so that people can live better.
This very human quest also fires up debates and people tend to be vehement in defending their version of utopia or faith without even feeling that they are merely preaching. Everyone seems to know how people’s lot can improve if only their prescription were followed.
The development community has also fallen prey to this prescriptive approach.  Experts pretend to have solutions which if followed will lead to riches not only created but well distributed among the citizens of a country. We are frequently told that all that is needed is “Implementation! Implementation! Implementation!” Thus these experts set up all manner of monitoring mechanisms such as the Millennium Development Goals to measure and make development happen.
Yet 70 years of expert development policy, aid funding and many consultants, plans and monitoring, development has eluded a large number of poor countries.  Why is that?
Donors and experts have an easy answer: their prescriptions were not well implemented. Often this is summed up in a phrase “political will”!  So they have an easy out. If it happens experts and their funding agencies can claim victory. If they have it wrong, blame politics and lack of implementation.  
For decades expert advice has been based on developing models drawn from ‘bestpractice drawn from other experiences. Thus all countries had worked on similar policies and built the same model of economic policymaking as elsewhere.Moreover since prescriptions were well known, the government was the best implementing agency. The approach was and remains top down. The solutions come from mostly from foreign experts with ample funding. Implementing agencies are created, Land Cruisers bought, consultants come and go and there is great expectation of development. Yet the results are less than inspiring.
What is wrong with this model? Basically, the ideological model and that of donor experts assumes that society and development is an engineering problem. All we have to do it plan properly and if everyone lives according to plan good things will happen. Development will be delivered ‘top down’ to a passive population.
What they forgot is that engineers deal with inert materials while in social economic problems we deal with self-willed, individualistic human beings. People have plans, ambitions and desires, individually and collectively. They will not easily change their plans merely because the consultant said so.
Most serious economists have moved away from this approach. Increasingly there is a realization that the economy is shaped by a series of individual and group decisions. In this view the economy is built “bottom up”. It is the actions of many people in their formation of enterprises—profit and nonprofit—that generates productivity, products, activity and trade and exchange. Development then is a byproduct of all these individual efforts. It is not the mere sum of these efforts but could be larger than these efforts as public and community good creation and innovation and entrepreneurship increase the menu of choices and discover new technology.
In other words, development emerges from the many transactions undertaken by people individually or networks. Planning and government efforts that are based on an assumption that the expert knows where to invest and what people should do are bound to fail because the command control method does not work in a ‘bottom-up’ complex system.
Even clearly well motivated plans to send kids to school come unglued despite all manner of goal setting and quantification because family decisions are more complex than the simplistic assumptions of planners.
Development is also not uniform across the country contrary to planning wishes.Local issues, local culture and local community, social and human capital plays a critical role in developing local welfare. Planners try their best even out these difference often at huge cost but with little success.

Marching to the Tune of Defunct Economists


Lord Keynes had famously said that “Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually slaves of some defunct economist”
Pakistan offers the best illustration of Keynes’s statement.
Here we are still suffering from S M Akhtar even though most kids don’t even know who he was. If you know this name you are probably old.
I remember I could never read that book called Economic of Pakistan by S M Akhtar. It was like memorizing the economic survey and a plan both of which are unreadable documents. The trick was to memorize numbers and throw them back at the examiner. And you also had to kind of compartmentalize your mind. Whatever you learnt of real economics—theory and empirics—you kept separate from the economics of Pakistan.  
Pakistan economics is still recovering from the Akhtar. And it is never more apparent than at budget time. People treat the numbers of the economy with the same sanctity that we treated them when taking our BA exam. Regurgitating numbers without any point was enough to win you points.
Economy was not about understanding relationships between key variables, uncovering agent and agency behavior, delineating the role of policy or debating market or government failure. Mindless number pronouncements were enough. At least 2 common fallacies survive from Akhtar days. (There are more. Will cover them later)
“Targets!”
It was also an era of planning when the book was written. Hence it was important to think in terms of government targets, plans and achievements. The literature moved on and we now know that the government has no way of targeting any variable. There is no serious economic work being done in the government. In fact the government does not even employ economists.
More importantly, economists have known since the seventies that prediction is not possible given the many forces at work in the economy. Without having meaningful forecasts, how can the government announce targets? Yet headlines are written about targets and many columnists discuss these as if those targets have meaning.
There is much excitement around the setting of export and growth targets. No one asks where they came from? Just that the government fixed a target. Even in the earlier planning models, the announcement of targets were supposed to be accompanied by an analysis outlining the instruments of policy that the government had for trying to achieve the target.  Not here. The government can announce any target and tell you nothing about their policy instruments and certainly not connect their policies with the target. But the old Akhtarites have been trained merely to memorize targets and feel good.
Numbers are so all important in this scheme. The export target is always mentioned as 17% or 18 %. It remains in that narrow range and no one questions it. MOC has no analytical model or anything that justifies that number. But more importantly no one notices that the nominal GDP often is growing by the same amount. Hence in terms of the share of GDP exports will not grow.  Indeed over the last decade or more this ratio has remained constant despite MOC sounding heroic announcing the target and many media columnists being excited about it.
Numbers
Numbers are so all important that we quibble over the 3rd decimal point. For example headlines were given to the growth number this year, with MOF claiming 4.1 % and several economists claiming 3.5 %. Much excitement was generated.
I have also seen MOF claiming a great achievement by showing an improvement in the deficit of .2 %. Can we measure these numbers so finely?
Unfortunately, a course in statistics was not a requirement for graduating with S M Akhtar. I have asked many a columnist who comes to me with a question on numbers asking me to interpret a minor difference in economic numbers, have you taken a course in statistics and the answer invariably is “no”. But then this is directly from the way our curriculum was set.
Now a first course in statistics will teach you that most data collection can never be exact. It always comes with a margin of error. In reality we have an interval of possible measures. More than likely, both 3.5 and 4.1 are in the realm of possibilities statistically speaking. So the debate is useless as statistically both numbers are indistinguishable.
In a recent paper on energy and growth, Imran Choudhry, Noreen Safdar and Fatima Farooq present the mean and the standard deviation of the GDP in Pakistan over the period 1972-2012 to be 4.82 and 1.96 respectively. The well-established rule is that 2 standard deviations from the mean on either side marks a confidence interval where most outcomes can be considered possible and cannot be ruled out as different from the mean.  Given this well established rule, the confidence interval for our growth data is between .94 and 8.44.
The fuss that is being created about the numbers is totally uncalled for. The precision required to differentiate between 4.1, 3.5 and 3.3 is not there. It just makes good copy and shows people how clever we are when we question numbers even though the numbers don’t mean much.
Sadly this mindless following of a defunct economist is keeping the real economic debate away!

Dumping on Technocrats!


Pakistan society at all levels has a very uneasy relationship with technocrats. The common refrain is, “we want ‘doers’ and not ‘thinkers’. The implication being that we are a ’doing’ and not a ‘thinking’ people. I confess, I have no idea what this ‘doing’ is that we take pride in? What wonders have we created in our country to allow us to take such pride in our ‘doing’?
In the same vein, we keep looking for ‘practical solutions’ not theoretical. Anyone who says something that we do not like is labeled impractical. And please do review where our ‘practicality’ has got us?
Invariably, column-writers, conference participants, TV anchors find some way to point to the flaws of what we call technocrats. There is a deep distrust of them?
Who are these technocrats? It is a loose term that we use to lump all semi-well clad, reasonably well-read people who are outside the government. I have often tried to find out what is the difference between a professional, a researcher, a writer, a professor, banker, a doctor, a lawyer and other such skilled people. But no we do not distinguish they are all ‘technocrats!’ Gentlemen!” that is all we are looking for!
How these people use the term ‘technocrat’ is as a catchall for “not in bureaucracy or army, not in politics and somewhat educated.”  
In an age of specialization, it is surprising to see that in Pakistan, a bureaucrat with no specialized training can move from making education policy to running an energy plant to managing the national airline. Then we call them technocrats.
Now for some reason, these technocrats are seen as henchmen of the army. When martial law is imposed, popular myth has it that ‘technocrats’ are called in to fix the system. And indeed by our loose definition,technocrats are called in. In Ayub’s Martial Law the technocrats were the bureaucracy. In Zia’s time again it was the bureaucracy led by GIK. Mahbub ul Haq tried but was strongly resisted by the bureaucracy.
During Musharraf’s marital law we saw the entry of our technocratic Finance and then Prime Minister, Banker, Shaukat Aziz. Yes some industrialists and retired civil servants too joined in. And of course 2 serious economists, Salman Shah and Hafeez Sheikh!
Even in this lineup with only 2 or 3 professionals and the rest loosely defined technocrats, the line ministries and all other government agencies remained solidly in the hands of the bureaucracy. The line positions of government are never compromised to technocrats.
Does this history suggest that technocrats always aid martial law?
But then in my view our approach to the term technocrat and professional skills is all wrong. Whether martial law or democracy, there should always be a strong demand for good professionals to staff key positions in the government! The regulatory agencies—NEPRA, PEMRA, SECP, OGDC etc.—should always be deeply staffed with the best professionals and be given the widest possible autonomy to do their job. And there job is to do first rate research on their system. After all the job of regulation is monitoring, evaluating and adapting to innovations. This job has to be done by the best and most specialized professionals. And certainly such agencies should not report to any generalist secretary or any minister.  
Similarly, the job of a policymaking ministry should be to understand through research the area of their concern to see how it is shaping up and if a policy intervention is required. In this world view policy is a reluctant nudge applied when necessary. But we do not see that as the job. In our traditional, perhaps even feudal mindset, the job is running the sector through giving orders, telling people what to do, and conducting transactions. Here, policy is a sledgehammer and not a nudge.
Looked at in this way, there should be a strong demand for professionals in government and indeed everywhere. Why then do we look down upon them and constantly infer that technocrats are anti-democracy? And why are our democratic leaders not looking for strong professionals to manage agencies and develop policy.
Professionalizing government is the only way to improve governance and raise professional standards in the country. For too long, dilettantes have had their whimsical ways and have refused to succumb to discipline. I guess these continuous attacks on professionals are to prevent governance to improve?
So they pose the question as democracy versus martial law and throw in technocrats on the side of the army.
Meanwhile the invisible bureaucrat--the powerful mafia in control--continues to run all systems even when occasionally a few technocrats are allowed into the periphery.
To my mind we should ask all governments-- as well as all other organizations- to show us good professional appointments everywhere. All positions everywhere—even journalism and TV--requireprofessionalism.
Professionalism is not an option. Any government that is not making good appointments should face public opprobrium. And come election time, we should tell them that they do not know how to hire good people.  
And we should give professionals more respect by being more mindful of their skill rather than lump them into one vague term called technocracy.
Finally democracy is not the election of a ruler who will run the country as a family kitchen. The election merely confers the power to translate the people’s desire into policy. The machinery of government has to be independent and professional to keep the continuity of business going translating the desires of the electorate through their representatives.

Wednesday, 9 July 2014

The Problem with Aid

The aid establishment has grown on the basis of 2 assumptions
1. That there is a capital shortage in poor countries and
2.  That these countries lack the ability to make policy either because of knowledge or information shortfalls.

The world has changed and these 2 assumptions are now untenable. Capital markets are flush with cash and they are eager to push it on to poor countries. The internet and globalization has made knowledge easily accessible to all. Most countries now have all manner of expertise. They are all exporting experts to the west.

Despite these developments aid continues to grow. Financial flows are small. Now aid establishment is retailing policy advice, capacity building and technical assistance.

While reports and consultants are surrounding poor country policymakers making them feel good, talent from those countries is being released to do outstanding work in the west. Yet their governments would rather have aid than bring back talent. And aid seems to be set to facilitate flight of human capital.

The aid establishment is now huge. Bilaterals and multilaterals included we are talking of about 30 offices in Islamabad. All of them have officials who need to justify their presence. For that they have to show an agenda and work. They are playing to their bosses out there and have only a limited interest in the welfare of Pakistan. They have large sums at their disposal and agendas.

Meanwhile, our government’s human resource policies are such that no competent well-educated Pakistani can find gainful, responsible and respectable employment at home. The only option for such talented people is to leave the country. Those who for personal reasons are compelled to stay in the country, they have to be employed by the aid establishment, reporting to junior aid officials and following their agendas.
We all agree that governance is one of our biggest problems in Pakistan. Yet this system of aid perpetuates poor governance. Ministers are treated like royalty by the aid establishment. They are addressed as “Excellency” and given a lot of courtly ceremony. They are wined and dined on international trips that can hardly stand the test of scrutiny. They are invited as chief guests to conference/ceremonies. They are given the pulpit at various events to make empty repetitive speeches. In short, ministers are distracted from their real work and rewarded for keeping the status quo.
The many donor bureaucracies now dwarf country administrations. The latter in any case have been stripped off their human capital and live with outmoded systems and technology, thanks to continued postponement of reform. Consequently, ministries have no ability to develop policy and other initiatives or to react to the various demands that face them. This suits donors who have agendas that need to be served. The less the opposition the better!

The various aid offices and consultants ply ministers with more reports and proposals than the ministry has capability to understand. Serves both parties well but it does postpone reform and hence keeps our administration on a perpetual decline in terms of their capacity. It is not surprising to see all our governance systems are deteriorating.

The continuous supply of consultants, technical assistance, training and conferences puts donors fully in charge of the agenda. When they say we need to measure poverty, everyone turns to it. They spend millions of dollars measuring poverty and arranging conferences for discussing poverty. They pivot to Trade with India, the whole country starts discussing that.

Quite unintendedly, the aid enterprise operates as if it were “dumping” on our intellectual enterprise. Donor advice to cut the deficit while demanding increases in several heads from environment to social safety nets, the government has no money for research in any area. Only donors have liberal funds for research which they use for their agenda. In this environment, the entire intellectual effort of the country works for the donors.

No money is available for local problem solving. For example, in Pakistan there is a consensus that civil service reform is critical for improving governance. Yet because the donors opposed this, the subject has never had any funding for research or conferences or ministerial presentation. The entrenched civil service resists discussion on this reform and donors wittingly or unwittingly oppose the reform.

Our think tanks and universities are depleted of serious research and public intellectuals as the aid enterprise only funds low quality agenda based consulting. Such consulting also is stratified where the meaty contracts go to firms overseas that have symbiotic (often questionable) relationship with aid. Local intellectuals and firms are virtually hired as research assistants by the contracting firms sitting in distant capitals collecting huge overheads and fees.

Perhaps the biggest unintended consequence of the aid enterprise is that the current arrangements are killing the intellectual enterprise in all countries. In this regime, chances of developing a Brookings or a McKinseys in a poor country are minimal. The best option for talent is to migrate.

Angus Deaton has rightly noted that state capacity which is so critical to development suffers the most with aid. Add to that the rapid deterioration in intellect and problem solving capacity of the country and continuing failure to develop becomes somewhat clearer.  

Thursday, 3 July 2014

Privatization or Fire Sale (with Shahid Katdar)

With Shahid Kardar

Happy days have returned. The privatisation process has been resumed in earnest. So goes Islamabad’s self-congratulatory declaration on the Rs38 billion raised from the sale of its 20 per cent stake in UBL. The authors of this article, who probably have been the strongest proponents of the free market in recent decades and have generally pushed for a more market-based open economy, should then be equally happy. We, however, feel that privatisation, done wrongly, can have perverse results. To this end, we refer to this deal to illustrate the several questions that should be widely debated so as to inform the government’s privatisation policy.

As mentioned above, we have long advocated the adoption of a more deregulated, open, market-based economy. Privatisation is but one step in that direction.

Most public policy analysts would agree with the following principles of privatisation:
a) The divestment should improve the efficiency and profitability of the operations of the enterprises being sold;
b) The transaction should be conducted in an open and transparent manner with adequate preparation and time so as to get the best price for a public asset, i.e., adequate price discovery efforts are made. Moreover, the mode of sale should not result in a wealth transfer to the buyer;
c) Improve market competitiveness in general and in the sector in particular;
d) The receipts from privatisation should not be used to fund current fiscal needs since that is likely to slow down much-needed fiscal reforms.

With these principles in mind, we find it very hard to understand the reasons for the fire sale of UBL. It does not satisfy the first objective of improving market efficiency. UBL is already being managed privately and just the sale of an additional 20 per cent stake will not ipso facto lead to an improvement in the efficiency of the bank and thereby induce any difference in the UBL’s bottom line.

The sale of these shares has obviously augmented the government’s coffers (including that received in the form of foreign exchange of $310 million). Yet, the government does not seem to have any plans to retire debt so that it can be verified that the exchequer will recoup the lost dividend stream on these share through savings on debt servicing. Nor is it apparently going to invest the proceeds in projects that will generate income, which will be more than the loss of the above referred dividend earnings. Objective (b) has been enshrined in our law, which requires that privatisation receipts should not be utilised for financing the current expenditure. Yet, available evidence suggests that there is every reason to fear that the proceeds will be used to finance the current fiscal position, resulting in the transgression of the law as well as objective (b).

The government could argue that the sale proceeds will be used for funding its many mega projects. All this clever accounting will do is to facilitate a higher level of unproductive current spending. Given that many of these grandiose projects will generate low returns, and some may even require a continuing government subsidy to meet their costs of operations and maintenance, will such use of the funds not add to our future fiscal problems?
The government has announced that it will respect objective (b) requiring transparent transactions that will facilitate price discovery. Unfortunately, the process has raised a host of questions that need clarification.
1) Why was the pricing down at a discount? The market price was Rs170 per share and the price demanded for this large block was Rs158. The fact that the shares were sold at a lower price raises doubts about the intentions underlying this divestment.
2) The triumphant reports coming out of Islamabad are citing over subscriptions. In such cases, normally, price is bid up. But not here.
3) About eight buyers, including a government entity, the NIT, have acquired the shares. Some brokers, who have bought shares, suggest that they were buying them for someone else. It would be interesting to find out the identity of the final buyer and how long these shares are held. The street gossip is already hinting at where these shares have gone.
4) The market’s perception is that the transaction was rushed. It did not give bidders enough time. Time to an auctioneer’s hammer is important for bringing out the true value of a share.
5) The government was adamant to sell the block as a block. Since eight buyers emerged for a block, why did the government insist that the shares be sold as a block? Could not a different auctioning system (the one used, favoured only those with deep pockets) been employed to fetch a higher price?
6) When a stock market exists and existing shareholders have determined a price, why would the government conduct an off-floor transaction? The reason given to us is that the market was not big enough to handle such a large transaction. This claim needs to be researched and debated. In our view, there are marketing strategies that would allow such a transaction to be done on the floor to maximise value.

Finally, if this divestment results in the consolidation of the holding of the group that already has a major/majority stake, would that be in the public interest, especially if these shares, sold at a discounted price, end up with the current owners? If privatisation increases the concentration of bank ownership a mere handful of individuals could be controlling the money market and the pricing of loans and financial services. There is, therefore, reason to worry about the wisdom of such a privatisation policy.

Saturday, 14 June 2014

On the hundreds of columns yelling "please state kill terrorists!"


I for one feel that these columns lamenting terrorism and asking for state to wake up and fight are overdone and repetitious. Allow me to raise some questions that all of us need to face. 

1.  Are we only getting views of elite columnists? Do the ordinary people agree?

2. Is the state that has been used by elite for predation, capable of the task? 

3. Are these columnists concerned only with the unreformed state doing battle or would they agree that without wholesale reform to rebuild state and social contract this war cannot be won?

4. Where were these thinkers when the rent seeking, predatory state preyed upon the poor and the disadvantaged? Eg. Land acquisition of poor farmers to build housing colonies and industrial estates. When their schools/universities stripped. 

5. Was the state not used mainly for elite rent seeking for decades? Did that not leave the poor searching for solutions through informal markets which we love to call "undocumented"? Did that not provide space for religious zealots?  

The larger question is:

Can this war be won without deep seated and extensive reform?  

If the answer to that is yes, why is there no focus on the issue of reform issues such as rent seeking, elite privilege, predatory state, state capacity, regulation and other such issues? 

It seems to me most columnists want this predatory-state lifestyle to continue. Or it that people are merely expressing surprise that the state that facilitated such a bonanza of rent seeking is now unable to perform for the elite? 

(Aside: Probably worth noting most such thinking mostly comes out of Islamabad followed by from Lahore Karachi).

Friday, 13 June 2014

Is the budget a law?

Is the budget a law?


Then why is it violated so easily?

When the budget is passed by parliament it is a law that lays out the expenditure limits and where expenditure is to be made. It also passes a revenue and financing plan.

Over the years we have seen how easy it is to violate the this law.  Expenditures are always turn out to be larger than envisaged in the law. Most of the sectoral expenditures made turn out turn out to be contrary to the law. In particular, realized development expenditures are often less than in the law.

Revenues are always less than in the law but what is worse, some of the decrease happens because the FM and the ECC hand out tax exemptions as politics or other considerations demand. Article 77 says Parliament has the power to tax and the tax law enunciates taxes that should prevail by law.  Yet MOF is able to violate the constitution and the law with ease. Unfortunately, Parliament is too unconcerned or unaware of its responsibility.

The ECC meets every so often to spend money that is not in the budget. Why? The law does not apply to them. It will buy large quantities of fertilizer that have not been provided for in the budget. They will give exemptions to various sectors on demand even though these have revenue implications for the budget in place. They will provide funding for the power sector or other PSEs that again is not in the budget. These are gross violations of the budget law and no one notices. Why indeed does the ECC consider proposals that are not backed by the budget law?

EAD will sign all manner of donor deals that affect the budget and often upset the planned development expenditures. Donors have their own priorities and will often disburse or allocate in keeping with their own domestic needs. Often this funding comes with its own conditionality asking say for a budgetary appropriation to a donor favored sector.  Not only is the budget law routinely violated in the process but also country development policy.

Parliament and civil society by abdicating its responsibility, have allowed poor governance, shoddy economic policy and budgetary management to take root. In the process MOF and the FM have acquired arbitrary power. As the Numero Uno ministry. FM and FS can arbitrarily please whoever they like because they have free hand with expenditures and tax exemptions. An ideal situation for back room deals and poor policy-development and implementation.

The PM or the president too love this situation. Recall the evolution of parliament as an institution.
From the Magna Carta Kings have struggled with Parliaments, which have increasingly become less aristocratic and more democratic on the question of the king's (executive's) authority and accountability. An important principle of government that has emerged as a result is that the executive power must be checked to prevent despotism and absolute rule.

An important check on the executive that has evolved through history is the control of the purse through the budget process and law in Parliament. This check is jealously guarded by all Parliaments in  the world.

If Parliament gives up a watch on the budget process as has been done in Pakistan, democracy is seriously eroded and the executive gains enormous power. This is the problem at the heart of our democracy. If parliament loses control of the budget why should PM, FM or ministers come to Parliament. In fact as it happens now all MNAs and politicos are beholden to minor MOF officials who have an unchecked power to spend.

Empowered by the lack of Parliamentary oversight, MOF rules with its unchecked control. To please donors it chases fiscal numbers that are out of sync with the realities of the country. It also seeks to please its masters and the various vested interests. When vested interest require that sugar should be bought from mill owners, it will starve education or the PSDP to do so and no one cares. When large payoffs have to be made to the power sector, railways and other areas are cut. MOF slows down releases destroying the timely delivery of all objectives. The best of intentions in any department are brought to naught by this kind of budgeting and an imperial ministry beyond any oversight.

With this power, MOF has no desire to budget properly after all the law means nothing. They can do as they like during the year. The planning function of the budget is lost now.

Expenditure overruns, re-allocation during the year are all done whimsically by the MOF. At the end of the year, the new budget law is appended with the details of these overruns and re-allocations in what is known as supplementary grants. In that way any questioning on the budget law is preempted.

Unaware of the importance of the budget for establishing good and accountable government, Parliamentarians happily agree to a summary debate on the budget of about 2 weeks (with more or less 7 business days) of discussion. (More than likely we have the shortest budget debate in the world). In this short duration no aspect of the budget is seriously discussed leave alone supplementary grants.

Sadly economic commentators are so busy discussing meaningless budget numbers (that MOF never means to keep) and fail to see the importance of Parliamentary procedure for the budget. But this issue sits at the root of mis-governance.