COUNTRIES are taken as economies — studied and planned for as such. This concept is not applied to smaller units in a country. Provinces in Pakistan have elaborate planning and development departments but they function as bookkeepers for public works programmes of various kinds, monitoring their implementation and interface with foreign agencies for whatever projects they try to sell them.
The P&D departments receive budgetary allocations for the year called development budgets. They apportion the budget between ongoing schemes and the new ones suggested by the public representatives or the departments. These are then placed before the chief executive for final approval. The final approval is often highly coloured by political and constituency considerations. There is no method to them. Once approved, it emerges as an annual development plan.
Provinces do not look at themselves as economic entities to develop according to their natural strengths. They see themselves as political units. The federal government is quite happy the way the provinces look at themselves in the mirror. This is despite the fact that every province in the country is bigger than many countries in the world. A holistic plan for the entire country is the preferred template. This may be because of the deep-seated historical distrust of the provinces. Also the federal government loves to be the bigger spender.
The study of an economy and planning for it involves its present level of development, its gross domestic product, its per capita income and distribution of income, its demography, its natural resources, labour force and available skills, its foreign economic relations and balance of payment, its industry, employment, consumption pattern, its endogenous and exogenous factors, its leading and lagging sectors and the bottlenecks to development. All this requires an elaborate statistical framework.
Distrust marks ties between provinces and the centre.
Technically there is nothing which prevents a province from developing itself as a sub-economy of the country. Foreign economic relations for a province would mean its relations with other provinces and regions of the country are unencumbered by balance of payment considerations. Its exogenous factors would be the monetary policy of the federal government, its share in the country finances, federal laws etc. There are some given factors for every economy or sub-economy.
The mist of distrust clouding the thinking and judgement of dominant powers should give way to the light and fresh air of trust. Mistrust destroys while trust builds. While it is for the provinces to fight for the new approach, the federal government should itself encourage it. The federal government should help materialise the plans determined by the provinces as sub-economies. It would, of course, require a great deal of coordination, exchange of information and discussions between the federal government and the federating units.
The present government has done away with what little rapport the provinces had with the Planning Commission. Each province in the past was represented in the commission by a member nominated by the province. This had some semblance of coordination.
The provincial representation has been discontinued. The members of the commission are now directly employed by the P&D Division on princely salaries. It calls the new system merit-based. The merit applied is fogged. The economic history of the world is witness to the fact that they are plodding democracies that ultimately survive and prosper. The federal arrangement of Pakistan is a circle that is difficult to square. Policies like this one are making the circle bigger and trickier.
Treating the provinces as sub-economies for the purpose of development will require a reorientation in the thinking and capacity building of the provincial governments. The planning and development departments are presently woefully inadequate to make the transformation from their current role of bookkeeping and monitoring to instruments of development. They can be left to continue in their present role under a different, suitable nomenclature.
A new body for economic planning will need to be raised. It would be staffed by economists and statisticians. Planning for development does not mean command plans. That concept is a relic of the past. It means showing the best way forward to the political bosses of quickly unlocking the economic potential of the province. The chances of allocation of resources on the basis of constituency considerations and political expediency will be minimised if there is a scientifically well-prepared case on the table.
The elected representatives in their ignorance think that they know what is best for the people. In fact, they do not. What we see every day is that they only know and care for what is best for them. They need input from knowledgeable sources to guide their actions and policies. If they still digress in the presence of such knowledge, they become guilty of malfeasance.
The writer is a former federal secretary.
Published in Dawn March 3rd , 2015