By Shahbaz Rana
Instead of mustering the political will to take difficult economic decisions and build institutions, the government is set to approve a $22.5 million (Rs2.3 billion) project for implementing reforms and hire expensive consultants, many of whom will be foreigners, towards this end.
The Public Sector Enterprises Reforms Project is being presented as the government’s response to increasing criticism for not initiating reforms. It is likely to be approved on October 27, a day before the special cabinet meeting convened to evaluate the government’s performance.
The project will be funded through a $20 million loan from the Asian Development Bank (ADB) at an interest rate of 2% in dollar terms. The country will return the loan in 25 years.
As much as 75% of the total cost or $16.9 million (Rs1.7 billion) will be set aside for paying salaries to consultants hired for the project. Foreign consultants will be paid Rs65,000 a day and local consultants will be paid up to Rs20,000 a day, official documents revealed.
The entire project will be implemented through 321 consultants, including 175 foreign consultants, according to project documents of the finance ministry. These consultants will be hired in the ministries of finance, water and power, petroleum and natural resources, and the Privatisation Commission.
Interestingly, the project will be implemented by bureaucrats of the finance ministry even though the subject of reforms falls under the Ministry of Planning, Development and Reforms according to the Rules of Business 1973.
The Pakistan Muslim League-Nawaz (PML-N) government has come under pressure to improve its governance and introduce reforms in the state-owned enterprises due to protests by Pakistan Tehreek-e-Insaf (PTI) and Pakistan Awami Tehreek (PAT).
However, experts in public policy have criticised the strategy of bringing reforms through foreign-funded, consultant-driven projects. “Reforms can never be done through projects… it is an institutional building process,” said former deputy chairman of the Planning Commission Dr Nadeemul Haque. He added that reforms need political will, something that is missing at the moment.
There are apprehensions that the opportunity to take reforms seriously following the ongoing political campaign may be lost as a result of the proposed project that may divert the government’s attention and resources.
“The proposed project is a farce and is designed to mint money … it also shows how insincere bureaucrats are with Prime Minister Nawaz,” a senior government functionary said. Foreign consultants are unfamiliar with Pakistan’s ground realities and will produce the kind of reports which are already pending implementation, he added.
“Who will implement consultants’ reports?” the official said. He also pointed towards the “precious time consumed despite the need to immediately take difficult decisions in taxation and energy areas.”
According to the official, problems of the power sector cannot be resolved by consultants. Similarly, the government is not ready to privatise Pakistan International Airlines and Pakistan Steel Mills due to vested interests of political parties. “So the consultants can’t do anything.”
The project will be a duplication of activities, as there already is a ministry of reforms and an Economic Reforms Unit in the finance ministry. There is also a World Bank-funded Institutional Capacity Building project in the finance ministry and reforms delivery unit in the ministry of planning and reforms. The Planning Commission has also recently hired sector-specific members in Management Pay Scale –I, which is equivalent to a federal secretary.
The government’s earlier experiments to implement reforms through projects were unsuccessful. It borrowed a large sum from the World Bank (WB) under the Tax Administration Reforms Project. The WB itself declared the project as the worst case. Similarly, the ADB lent money for judicial reforms under Access to Justice Programme which, again, was a big failure.
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