Promising reforms

The year 2023 is the year of elections in Pakistan. The time for all political parties to start preparing their manifestos. For true democratic dispensation, which alone ensures mass participation in politics, it is imperative to debate complete reforms in all areas of governance. Reforms that are aimed at moving towards the cherished goal of self-reliance. It is impossible to make Pakistan a truly democratic and economically viable state unless we undertake long-delayed and much-needed structural reforms in the prevailing politico-economic system, which favours the elite at the expense of the less-privileged segments of society.

This three-part effort is to suggest some concrete and viable solutions to cure the well-known maladies faced by Pakistan, which need to be fixed through holistic reforms. This part will deal with an overview of the fundamental reforms needed. In the coming weeks, a detailed roadmap of comprehensive reforms and concrete suggestions will be presented for public debate and consideration of all political parties. This effort is aimed at reaching a consensus for making Pakistan a place worth living in the next five years, on the ideals of our founding fathers and framers of the supreme law of the land – the Constitution of the Islamic Republic of Pakistan.

The prevalent outmoded administrative and judicial systems need major changes to ensure that citizens’ rights are fulfilled, and obligations are discharged by all within the four corners of the law and principles laid down in the Constitution. The main cause of our current pathetic socio-politico-economic conditions is perpetual, unchallenged, unresisted existence of inefficient and corrupt institutions that are adding to the miseries of the masses. Created and paid for the welfare of the people, these institutions are working for self-aggrandisement.

The juxtaposition of economic policymaking and political reforms is necessary. The agenda for reform and survival should entail a comprehensive, well-integrated and unified plan that alone can assure its success. Reform in one sector while ignoring the ills of the other, resorting to improving something at the cost of leaving aside the one interlinked, will not yield the desired results. The case of tax reforms divorced from the elimination of black economy is the point in focus. The main causes of burgeoning fiscal deficit are allowing an unprecedented size of underground economy to flourish, existence of incompetent and inefficient tax machinery, reckless borrowing and ruthless spending. Therefore, reforms in the tax administration without routing the causes of parallel economy and plugging wasteful expenses are not going to improve management of public finance -notwithstanding the oft-repeated rhetoric of ‘Charter of Economy’.

The failure of democracy in Pakistan, among many other factors, is attributed to lack of democratic values within political parties – they are dominated by individuals who openly defy laws and avoid transparency in their affairs. It is sad to note that political parties, despite criticism from all corners, are not ready to introduce democracy within their own ranks. Unless these parties reform themselves by introducing fundamental changes in their working, there is dim hope for meaningful (sustainable) democracy in Pakistan.

In all established democracies, political parties regularly hold elections, present their audited accounts to public, file tax returns, and disclose details of expenses and names of donors – elements that are conspicuous by their absence in our political culture. Political parties in Pakistan are also required to meet these standards under various laws but the regulators – the Election Commission of Pakistan, the Securities and Exchange Commission of Pakistan and the Federal Board of Revenue – have miserably failed to enforce these laws and regulations.

The following points may be considered by all political parties to add to their respective election manifestos, with the commitment that these will be implemented regardless of which party wins. The first and foremost priority should be reforms in the justice system, along with changes in the administrative and governance apparatuses to eliminate the causes of litigation. No society can achieve progress unless it ensures dispensation of justice to all, irrespective of their position in society. Second most vital area of attention should be revamping the education system with the aim to end ignorance. Our problem is not only illiteracy, but also ignorance. Even the so-called literates demonstrate a lack of civic sense. The focal point of education should be creating a society that is tolerant, disciplined, courteous and knowledgeable – capable of making innovations and technological advances.

Furthermore, efficacy and accountability of all institutions must be ensured; direct elections must be held in Senate, and it should also be given the power to vote on the Money Bill; political, administrative and financial powers should be devolved to the local governments; education, health, housing, local policing, and all civic amenities should be provided through elected representatives of the local governments, which should have the powers to raise taxes for these purposes; digitization, transparency and accountability must be ensured at all levels in the governments to enable citizens to understand and participate fully in the process of national integration.; reforms in civil services, fair deal for employees with effective accountability should also be focused on.

Moreover, terrorism, sectarianism, bigotry, intolerance and violence through enforcement of law should be eliminated, and concrete measures should be taken to ensure social development of society based on higher values of life and humanity. Strict laws must be imposed and effectively implemented to curb terrorist financing, money laundering, plundering of national wealth, political write off of loans and leakages in revenue collections. Long-term and short-term strategies must be devised to break the shackles of debt-trap, making Pakistan a self-reliant economy and ensuring social security and economic justice for all citizens. Public finance management should be reformed and strengthened – transparent public sector spending coupled with efficient performance. Political will must be demonstrated to control wasteful, non-developmental and non-combatant expenditure. Technical, institutional and organizational dimensions of public finance should be reformed. Good governance and corruption-free government structures should be ensured.

As far as tax reforms are concerned, the federal government should collect income tax on all kinds of incomes; harmonised sales tax on goods and services should be the provincial domain; all federal, provincial and local taxes should be collected through one agency (the National Tax Authority), which should also disburse pensions and other social security payments to citizens. Excessive marginal tax rates should be reduced and made compatible with other tax jurisdictions of the world, especially in Asia. Corporate rate of tax must be substantially reduced, whereas onerous tax and other regulations for corporate sector that are the main stumbling blocks for domestic and foreign investments should be eliminated. The laws and procedures concerning tax should also be simplified.

Democratisation of society requires respect for rule of law by elected representatives. They flout it to promote cronyism. This is the anti-thesis of democracy. Elections alone cannot ensure democratisation. They are a means to achieve representation of the masses, which is totally ignored by the people in power. Our rulers – civil and military alike – have been doing everything contrary to democracy. They have resorted to anti-people economic policymaking. Pakistan finds itself under heavy debt instead of striving for self-reliance. The present state of affairs is the direct result of these policies. The second part will present a blueprint for reversing these policies to ensure stability, growth and prosperity for all.

To be continued…

The writer, Advocate Supreme Court, is Adjunct Faculty at LUMS and member Advisory Board of PIDE