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Editorial: NFC deliberations

The ongoing deliberations on the 7th National Finance Commission (NFC) Award in Karachi bring together the federal finance minister, provincial finance ministers and ex-officio participants to hammer out a consensus Award. This will be the first real revision of the Award since 1990, when a caretaker government announced the Award that has more or less held the field to this day. Musharraf’s interim Award conceded the principle that the vertical distribution of the federal divisible pool should incrementally shift resources to the provinces from the centre. Under that arrangement, the provincial share went up incrementally annually from 41.5 percent in 2006-07 to 43.5 percent in the last fiscal year, 2008-09. It envisaged this share rising to 45 percent in 2009-10. However, the gist of the Karachi deliberations seems to have carried the spirit of the interim Award further by more or less agreeing that the share of the provinces should be more than 50 percent. The demands by Sindh and Balochistan that it should be increased to 60 percent, NWFP 80 percent and Punjab 65 percent could not be conceded since it would have an impact on the federal government’s budget at a time when it is footing the bill for the war against the militants. However, the bone of contention of 5 percent collection charges that accrue to the federal government seems to have been resolved along the lines of a reduction of some 2-3 percent.

The issue of a fair division of resources, first and foremost vertically between the centre and the provinces, and then horizontally, amongst the provinces themselves, goes to the heart of the federal scheme. The long standing demand for provincial autonomy is still to be met, but an NFC Award arrived at by consensus during the term of democratically elected governments is a positive signal and a harbinger, if the present spirit is carried forward, of moves towards greater provincial autonomy. The committee on constitutional change is deliberating on the abolition of the concurrent list. This would render some federal ministries unnecessary, thereby decreasing the centre’s burden. In any case, the abolition of the concurrent list and the federal ministries rendered redundant thereby upholds the principle that if something can be done at a lower level of the federal structure; it should not be done at a higher level. Whenever the constitutional amendment package is presented and adopted by parliament, it will be a historic victory for provincial autonomy, a demand that has bedevilled the country’s history and been the cause of much friction and divisions within the federation.

The discussions on the vertical distribution formula are tough enough, but perhaps even they will be overshadowed when the time comes to examine the criteria for horizontal distribution of resources amongst the provinces. What led to the interim Award under Musharraf was the failure to achieve a consensus on these criteria. But that ‘democracy’ was a hothouse flower nurtured under the shadow of military dictatorship. Hopefully the current genuinely democratic dispensation will succeed where the past incumbents failed. Currently, the basis for horizontal distribution remains population, which unduly favours the largest and ironically most developed province, Punjab. The smaller (in population) provinces have been crying themselves hoarse over many years for a change to multi-criteria horizontal distribution. Sindh wants revenue collection, NWFP poverty and backwardness, and Balochistan the latter two plus area factored in besides population to make the formula fairer and more in consonance with the disparate situation and needs of the four federating units.

The hope of course is that the spirit of mutual accommodation on display so far will help the stakeholders to arrive at a consensus Award that will satisfy the aspirations and development needs of all parts of the federation. *

Second Editorial: Rising corruption

It seems as if Pakistan has a knack for being in the news for all the wrong reasons. According to Transparency International’s Corruption Perception Index 2009, Pakistan has climbed five places to number 42 from 47 as compared to 2008 in an annual list of the world’s most corrupt countries. Interior Minister Rehman Malik said the report is flawed and hence unreliable, while Transparency International has refuted this criticism. Meanwhile, Prime Minister Yousaf Raza Gilani has ordered immediate constitution of a committee to review all issues of corruption and law and order raised by the said report. The report notes that when essential institutions are weak or non-existent, corruption spirals out of control and the plundering of public resources feeds insecurity and impunity. This should be an eye-opener for our rulers as well as the citizens of Pakistan.

Pakistan tops the list of countries known for bad governance, rampant corruption and a poor law and order situation. The common man is forced to pay bribes for police protection, education and justice. Corruption is not only rampant in all our institutions but also in our day-to-day lives. There is no denying the fact that a majority of politicians are corrupt but the same can be said for the judiciary, civil service, banking, education and health sectors, police, media, sports, etc. There has to be a consistent mechanism to ensure accountability in order to eliminate rampant corruption. In 1999, Musharraf promulgated the National Accountability Ordinance and set up the National Accountability Bureau (NAB). In the beginning, many big fish were ‘nabbed’ by NAB but soon it all changed at the behest of Mr Musharraf. Many politicians who were charged with corruption cases were set scot-free after becoming political turncoats by making deals with the former president. Subsequently, plea-bargaining became the order of the day. Those who are now creating a fuss over the National Reconciliation Ordinance (NRO) need to be reminded that some of them were themselves the beneficiaries of making political deals during the Musharraf regime in order to be cleared of corruption charges. Pointing fingers at President Zardari will not wash away their corrupt past. It should be remembered that most of the charges against President Zardari were never proved in the courts.

Effective action against corruption is the responsibility of governments. Civil society and the private sector also have to play an active role by holding the government accountable wherever it goes wrong. Corruption must be rooted out from every institution if Pakistan is to develop. An open and transparent state will provide for the fuller realisation of economic, social and political rights. *

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