Twin challenges of economy & governance

Political stability is dependent on economic stability. Economic stability in turn is contingent on consistent policies which require political stability and an atmosphere of order emerging from Rule of Law.

This year Federal government needs Rs9.7 trillion in debt repayments, which is its total tax and non-tax revenue. The federal government requires an additional Rs8 trillion in order to fund its day to day operations.

Together the debt repayment of Rs9.7 trillion and new loans of Rs8 trillion (Rs17.7 trillion or $64 billion) is a whopping liability for the people of Pakistan. This debt has accumulated due to the borrowings of the Federal government to fund and run provincial government departments in Islamabad.

The Pakistan People’s Party has been consistently demanding the restoration of a genuine federation, as originally envisaged in the 1973 Constitution, particularly since it successfully enacted the 18th Amendment in 2010.

Unfortunately, a genuine federation has always been anathema to the judiciary and bureaucracy (both unelected organs of state). Article 91(6) of the Constitution clearly states that the federal government shall be responsible to only to Parliament: the National Assembly and the Senate.

However, since July 5th 1977, starting with General Zia’s infamous coup, and carried through by various other impositions of Martial Law and “hybrid” political systems crafted under 58(2)(b) of the Constitution, political and economic stability has been seriously jeopardised.

In the post 18th amendment era of regime changes, by influencing the composition of parliament or by rulings of compliant judges two prime ministers were removed by superior courts in 2012 and 2017 and further erosion of the political economy was witnessed.

What our erstwhile establishment fails to understand is that the stronger the federal form of state and parliamentary system of governance, the stronger the economy.

However, if the federation is replaced with a unitary form with Islamabad operating provincial ministries/departments/corporations etc. and if the federal government is made accountable to the judiciary or any other unelected organ of the state, then the economy flounders.

Through suo motto rulings or other direct proceedings, the superior judiciary forces the federal government to be accountable to itself. According to our constitution, the federal government is responsible to parliament and parliament alone. Executive governance through judicial orders (even in the garb of upholding fundamental rights) is unconstitutional and an abuse of an authority, not vested in the judiciary.

It is important for us to understand that the fiscal deficit in Pakistan is inversely proportional to the decrease in democratic rights and respect for federalism. If parliament is weakened, so shall the economy. A weak federal government not accountable to parliament is easily coerced by other unelected organs of state. It cannot deliver economic gains to its citizens.

After the historic 18th Amendment was enacted by the Peoples Party government in 2010, genuine federal and parliamentary character of state was somewhat restored. In subsequent elections political engineering and gerrymandering were a clear reaction to the 18th amendment.

It’s obvious now that unelected organs of state are averse to federal and parliamentary systems of governance. They incessantly try to make the executive accountable to themselves. The “judicial-activism” (from 2010 onwards) with the concomitant spewing of Suo moto hearings and orders, are unheard of in genuine federations with enscribed Constitutions. Suo moto actions belong to archaic monarchies. Often referred to as “kings’ power”, they are both arbitrary and unethical.

The Peoples Party and PML led governments (after the 18th amendment) put the country on the right economic path and substantial economic growth was witnessed. This was achieved by strengthening federal governance and empowering parliament.

Unfortunately, we veered off course: The superior judiciary not only toppled two prime ministers (without having any such authority under the constitution) but they also influenced the outcome of both 2013 and 2018 polls. Hence the 2013 and 2018 elections are respectively nicknamed the R.O and the RTS elections.

This deviation from federal and parliamentary systems has put the country in peril. The federal government cannot be deemed as wholly federal as more than 17 provincial ministries (pointed out by PPP Chairman Bilawal Bhutto Zardari) are still retained by Islamabad. Efforts to make federal government responsible to unelected organs of state continue unabated.

Recent decisions of the supreme court to influence the composition of parliament in derogation of Article 51 (which unambiguously states that reserved seats would only be allotted to those parties who contested and have won seats in Parliament through elections), is a case in point.

When the federal and parliamentary character of the state is eroded, law and order also deteriorates. It disables the political system. Government is unable to address religious and ethnic issues and also foreign policy outcomes of yester years.

Unfortunately, despite having an empty kitty, and ignoring the mandate of the constitution an enormous federal government has yet to come up with a debt retirement plan. Mercifully it has finally issued a rightsizing plan for 40 ministries which should be restricted to 6 or 8.

Our bureaucracy is well known to cling to its perks, privileges and promotions. It has always resisted downsizing. However now the situation is dire. Skyrocketing electric, gas and petrol rates are haunting the government. Islamabad knows that due to whopping debt liability and an outsized federal government, it is in crisis.

Having said that, within a short period, the government has indeed improved upon macro economic indicators. The IMF programme has been successfully negotiated. The 2024-25 growth rate is predicted to be 3.5 percent. Fitch and other international grading institutions have upgraded the economic rating of Pakistan. Inflation is likely to be single digit (as projected by the federal government), which is welcome.

It seems that the government is planning to address the issue of electricity prices. (Prime ministers 14th August speech). If economic indicators continue to improve at this pace and the federal government and the Peoples Party announce future debt retirement plans, the oppositions narrative could be blown to smithereens.

Hence, the urgency for the opposition to bring down government through time tested regime change methods. After the dramatic political changes witnessed in Bangladesh recently, the public sees through such attempts. It won’t approve another PNA movement.

It would be advisable for the government to follow through on the 18th amendment and assert the supremacy of parliament by making the federal government responsible to parliament alone, and not to any other unelected institution.