Thursday, 29 October 2015

Should we have a Planning Commission?

Kh Asif with his caustic remark “if here had been a Planning commission then, Taj Mahal would not be built!’ I am glad that started a debate on this important issue and many people have written good articles on this subject.
But first, let us tell Kh Asif that he is exactly right. Taj Mahal, an aging emperor’s whim should not have been built. Planning Commission was built to keep such whims in check. Recall Ayub Khan never interfered in Planning.   
Go back to first principles. Democracy and our modern form of government believes in checks and balances in government. This means a) due diligence—research and evidence collection—for presentation to a decision-making forum and b) clear lines of responsibility between ministries to jealously look after their roles. If one ministry accumulates all power and decision-making then we go back to the days of an arbitrary Shah Jehan. Remember the world fought divine right of kings for centuries to develop democracy.
The cabinet is a decision-making body with the PM as chair. PM cannot and should not be making arbitrary decisions. Even then the cabinet has to take decisions within the law. Legal changes have to go the parliament. This is worth repeating for the media soundbite has become “PM has arbitrary wuthority.” Democracy is a system not a vote!
As Mosharaf Zaidi appropriately summarized in his column recently that Planning forums play an important decision-making role in keeping with the design of democracy.
Sadly it has now become routine for ministers to think that they have the divine right to do development, especially development projects. Ministers must be told that their job is policy-making and participating in decision forums. That is where they set direction. Actually implementing, running and sighting development projects is a technical subject for expert due diligence.
Our ministers still have a feudal mindset where they associate the job with arrogance, power and control of resources. They don’t like any check on them. Faisal Bari had a very good column on how our minsters feel that regulation is a hurdle in their path to control markets. While in government I saw ministers chafe at regulatory bodies and do all they could to gain control of them.
Perhaps there should be some ministerial training on their role in a democratic system. Experience shows clear lines of demarcation. Ministries merely monitor and collect information to report to forums like parliament and cabinet. Once in a while changes in policy through careful research and evidence collection are made to appropriate forums for decisions.
Regulatory bodies watch markets and see that the law is implemented. They follow laws enacted and policies approved by high level forums. Minsters and ministries have no role here.
Project implementation and public service delivery that follows from legislation and policy development is done in separate agencies beyond political control. This ensures impartiality in government service. Ministers should not have a role in this.  
Ali Salman also raises the issue of planning and comes to the correct conclusion that our planning ministry must develop systems for the 21st century.  
There is a clear need to extend this debate and indeed try to learn from it. I have written many times we need to review our architecture of governance if we want good decision-making.  
But what of Planning?
My take: There are 3 main objectives of economic policy—growth, external and internal balance and inflation management. The current practice of all 3 being managed by 1 ministry may be the biggest folly of our poor governance.
Much literature exists to suggest that each government ministry should be a custodian of one goal.  Hence central bank independence!
For the last 50 years our Planning process has been broken with egocentric FMs also wanting the Planning title and the all ministers wanting an unbridled control of their development budget. The result is our lackluster unstable and declining long run growth. Obviously we need a different route.
MOF has its hands full managing a budget. Besides when the budget runs into trouble as it does every 2 months, MOF instruments (often called mini-budgets, in reality austerity) all impact growth negatively. Some agency must be sitting at a decision-making forum contesting this approach to budget management. 
IMF suggests we should develop an independent central bank that manages inflation and an MOF that manages the budget and through it the internal and external balance. But does ‘growth and development’ not need an independent champion? Like the SBP it too should be independent, staffed by competent professionals and not managed by politicians. 
Call it what you will, we need some place where growth, development and jobs are kept under review and policy initiatives for these objectives are presented to decision-making forums. If not then growth and development is a forgotten by-product of inflation and budget management.
We are a developing country. Our topmost priority needs to be economic growth and development. We must have an agency thinking of growth and development.
Aid agencies also lobby against the PC.  When I was in the PC, their refrain was we want our PC1’s approved without scrutiny. Yet they want better governance?!
They have a “Country Partnership Strategy” that is often at variance with PC plan documents. They run their own advocacy programs, fund research that affects key policy like ‘trade with India”, set up their own NGOs and activities again independent of any government dialog. This is a parallel invisible government in our midst.  
EAD is a MOF is hungry for money is blissfully unaware of this parallel government and its impact on the economy. Donors freely retail whim and use expensive contractors and consultants as they like. Projects such as TARP, SAP, Capacity building, Access to justice and several others unsuccessful by their own evaluations, leave a loan to be repaid by our children.
In my view, EAD is obsolete. Donors should be reporting to a planning forum. They should not be able to set our policy agendas through advocacy and NGO funding unilaterally.
We need some agency to keep our development efforts coordinated and under review. And that was the PC. But now much battered and broken can it do the job?

Let the debate go on.