Unresolved issues

By Shahid Javed Burki

AT this time Pakistan faces not only a number of very difficult economic problems. It is also, once again, heading towards a political crisis as the two mainstream political parties have begun to drift apart.The hope that was raised last year by the peaceful transfer of power from the military to a government led by civilians has given way to despair. The situation is producing a great deal of uncertainty and we know not only from Pakistan’s own experience but also that of many other developing countries that political uncertainty takes a heavy economic toll. Pakistan cannot afford to go on that route, especially when the economy is in such distress.How Pakistan emerges from the economic crisis it now faces and how it progresses in the future would depend to a considerable extent on the quality of economic governance the state provides. The quality of governance at this time is less than satisfactory.A number of issues remain unresolved. These include consensus on where executive authority should reside. Should the president and the presidency have most of the executive authority that, in the original 1973 Constitution, vested with the prime minister and parliament? Should the president be effectively the chief executive of the country with few checks on the exercise of power by him? How much power should devolve to the provinces and how much authority should be given to the instruments of local government? Should the local government institutions be autonomous in the way they exercise the deputed authority or should they be subject to oversight and control by governments at higher levels?What is the role of the public sector in economic management? Should economic matters be left entirely to the private sector? What should be the role of the military in politics and economics? Should the military be totally under the control of the civilian authority?Then there are a number of questions relating to the role of the judiciary and the design of the legal system. How should the judges to the various high courts be appointed? What kind of control, if any, should the executive and legislative branches of the government exercise on the judiciary? What is the most appropriate way of dealing with the judges suspected of indulging in irregular activities?These questions are being asked not only in Pakistan; many of them are being raised in development circles as well. What kind of governance is needed to have a high rate of economic growth and to distribute more equitably the fruits of growth is a question on which consensus is still to develop among those who work in the area of economic development. There are two issues on which there is still not sufficient agreement to unambiguously guide policymakers. One concerns the amount of representation the citizenry must have in determining the direction and content of economic policy. The second relates to the distance between the policymakers and the people. Pakistan has a mixed record in both areas.In fact, the various experiments undertaken in the country since it gained independence in 1947 impacted on the structure of the political system. How has the theory of governance developed over time, in what way have the changes in theory affected Pakistan, what is the current thinking on the subject and what options are available to Pakistan at this time are some of the questions that are important and which must be answered for Pakistan to ensure a better economic future for the country’s citizens.Early in Pakistan’s existence as an independent state, some influential development economists began to wonder whether democracy was appropriate for promoting rapid economic growth. In the early 1960s, Gunnar Myrdal, a Swedish development economist who won the Nobel Prize in economics for the contributions he made to development theory, began to worry about the difficulties created by what he described as the “soft state”. These were formative years for the government of Gen Ayub Khan, Pakistan’s first military leader. The general was of the view that democracy had not served the country well. It had led to much bickering among different contenders for power. He wanted to introduce a system that would be reasonably representative but, at the same time, would lead to efficiency in governance. Some of his worries were shared by the academia at that time. This group of thinkers included Gunnar Myrdal.Myrdal’s thinking and those who thought with him and like him had considerable consequence for Pakistan. Countries in South Asia “are all ‘soft states’, in that policies decided on are often not enforced, if they are implemented at all, and in that the authorities, even when framing policies, are reluctant to place obligations on people,” wrote Myrdal in his seminal three-volume study titled, Asian Drama. “This reluctance which derives from the economic, social, and political structure of South Asian countries as they emerged under the impact of colonialism and the fight for independence is then excused and, indeed, idealised.”Ayub Khan drew comfort from this kind of analysis and established a system that limited democracy — he called his system “basic democracies” — while creating a number of institutions that improved the efficiency of the government in economic matters. The innovations introduced by the military president included a local government system that allowed people to choose their representatives at the lowest tier of the system, a system of economic planning and financial management that made it possible for the country to allocate the resources of the state according to well-thought-out priorities, and a number of quasi-autonomous corporations that handled public investment in various sectors of the economy.The Ayub Khan system worked well in achieving high levels of economic growth. It did not do much to satisfy the wish of the people to find a voice in governance. The system was discarded but the country has not succeeded in replacing it with anything that was significantly better. While the country was struggling with the important task of developing the right system of economic governance, it failed to provide a voice to the people. Because of that it failed not just in political development. It was also not able to put the economy on a sustainable path of growth.There is now consensus among those involved in the formulation and updating of the thinking on development that a representative system of government that fully involves people at all levels is a prerequisite of inclusive economic development. The present government would do well to let the people know exactly what it has in mind when it comes to providing them with good governance.