Framework for Economic Growth, Pakistan - Planning Commission

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International conference on “Framework for Economic Growth, Pakistan”Speaker: Nohman IshtiaqAdvisor, Finance Division, PakistanAn ordinary strategy well executed is betterthan a brilliant strategy that for one or theother reason is never implemented.Importance of the implementation of thestrategy has already been highlighted by thespeakers and my presentation is also aboutimplementing the Framework for EconomicGrowth.The FEG speaks about two importantconstraints to the economic growth inPakistan which are given as follows:1) Inadequate market development: Itincludes following important factors tobe considered:- Lack of competition,- Tax, tariff and policy distortions,- Poor regulation,- Entry barriers, and- Government involvement.2) Lack of efficient public sectormanagement: It includes the followingareas to be focused:- To provide core governancegoods,- To facilitate markets andinvestment, and- To promote deepening ofphysical, human and socialinfrastructure.Growth strategy basically needs animplementation strategy. Governmentshould provide a framework for nongovernmentaction rather than operateinstitutions. Reforming Public Sector inPakistan requires ‘New Public SectorManagement” which include following areasto be considered:1. Government should steer rather thanrow (provide a framework for nongovernmentaction rather thanoperate institutions),2. Government should focus onoutcomes (desired results) and needsof customers (service recipients),rather than inputs (rupees and jobs)and needs of bureaucracies (rules),3. Government should decentralize andaddress problems from the lowestlevel of government possible(subsidiary),4. Public agencies should compete withprivate agencies, and should adopt amarket orientation, and5. Government which works better alsocosts less.The core of whole Public SectorManagement is the Result BasedManagement (RBM) which focuses mainlyon the customer or people. The inputs arehuman, financial and material resourceswhich give output in form of servicedelivery. In Pakistan public sector currentlylooks at only inputs i.e. economy factors.We in Pakistan don’t have system wherebywe can measure efficiency by looking atservice delivery performance in publicsector. As effectiveness of the public sectoris also not being properly looked in Pakistanwe don’t have a comprehensive mechanismwhere we can monitor, budget and planoutcomes.Results Based Management system focuseson service delivery and this should have anorientation at planning, budgeting andmonitoring stages. Monitoring results shouldback the planning process in the form offeedback. The overall working should bealigned with the individual performanceassessment mechanism of the Civil Service38
International conference on “Framework for Economic Growth, Pakistan”and reward and penalty should be attachedwith the achievement of the results.My first recommendation for the wholesystem would be to put at one side differentgovernment actors and political setup. Onthe other side there would be planning andbudgeting, whereas monitoring would be atthe top. It would all be about a fiscalframework approved by the cabinet withexpenditure limits for each of the ministry toform basis for ministerial planning.Ministerial planning should also be based onthe results with an over sighting body fromPlanning Commission and Finance Ministrytogether to look at the performance. Thisfiscal framework should at the end beapproved by the parliament and a cabinetsub-committee for monitoring governmentperformance, same as President’s DeliveryUnit doing in Indonesia or like PrimeMinister’s Delivery Unit in UK.With regards to this medium term fiscalframework government already has aprocess whereby a macro economic situationis analyzed, revenue and fiscal policies aredebated, and results and expenditure ceilingsare given to all ministries, which is alsoendorsed by the cabinet. We also have aprocess whereby the budget in the federalgovernment is made based on inputs andoutputs along with performance indicatorsgiven for each of the ministry. The system isthere but there is need to look at this overallholistic picture whereby plans, budgets andmonitoring and evaluation is focused forresults.Important question here is to overlook theperformance. In case of Indonesia it is thePresident’s Delivery Unit which monitorsthe implementation process. In UK thePrime Minister’s Delivery Unit performsthis job. In case of Pakistan Prime Minister’sOffice or cabinet can answer, but thesequestions require further deliberations.Linkages between federal and provincialgovernment are also important for the wholesystem to effectively work. One lastimportant thing I want to say before closingremarks is that our constitution allowsgovernment to approve and spendsupplementary budgets along with reappropriationswithout prior approval by thelegislator. This article within the constitutionundermines our planning, budgeting andmonitoring. It requires considerable thinkingso that ex- ante approval by the legislator ismade mandatory before spending anyamount.***39
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Framework for Economic Growth, Pakistan - Planning Commission

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