File photo. Asif Hassan—AFP
In a series of articles for daily The News, Pakistani economist Ishrat Husain has spelled out the causes he believes are responsible for the country’s governance crisis. According to the former governor of the State Bank of Pakistan, the country has failed in the basic requirements for a developing country to (i) provide external and internal security for the people; (ii) collect taxes; (iii) manage public finances; (iv) conduct foreign affairs; (v) maintain a stable macroeconomic environment, including a sound and healthy financial system; (vi) provide basic infrastructural facilities; (vii) develop an education and training system capable of supplying skilled manpower; (viii) encourage, as well as undertake, research and development; and (ix) ensure an enabling regulatory framework for private sector and community participation in development.
One of the reasons for Pakistan’s governance decline is the state’s intrusion into the private sector, with government functionaries overseeing businesses without the requisite experience or expertise. The country’s taxation structure, meanwhile, penalizes existing taxpayers while facilitating evaders through collusion and connivance. All the while, the country’s democratic political process was hampered by the domination of the civil service and military in the affairs of the state, with the judiciary—barring a few exceptions—plodding along sanctifying the challenges to the legislative arm.
Then a reaction set in that proved the medicine can sometimes be worse than the ailments. In 1973, a populist government headed by Zulfikar Ali Bhutto sought to reduce the bureaucracy’s authority by taking away the constitutional guarantee of job security. He also demolished the exclusive and privileged role of the Civil Service of Pakistan within the overall structure of the public service. This triggered a significant decline in the quality of new recruits to the bureaucracy, as the implicit trade-off between job security and low compensation lost out to expanding private sector, which offered more attractive career opportunities. The erosion of real wages in the public sector over time also led to low morale, demotivation, inefficiency and a rise in corrupt practices among civil servants at all levels.
The 1990s saw a rapid turnover in government, with one political party replacing the other and appointing handpicked candidates to the top bureaucracy. This facilitated the requirement of an informal political affiliation among bureaucrats seeking to retain their jobs, sounding the death knell of an impartial, neutral and competent civil service responsive to the needs of citizens. Loyalty to ministers, chief ministers and the prime minister took ascendancy over accountability to the general public.
Today, the state that must ensure equitable distribution of gains from economic growth is controlled almost entirely by an elite that evades taxes and appropriates the public expenditure for its own benefits. Inequities—interpersonal, regional, gender—became more entrenched, as a system built by the elite, and for the elite, brought us to the governance crisis we are facing today.