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August 28, 2018

FOR now, the mention of Prime Minister Imran Khan seems synonymous with hope. Even those opposed to him seem willing to go with the argument that it’s worth testing someone new. Of course, he isn’t the first leader to espouse such massive hope. Many statesmen around the world have. But only a few have lived up to the expectations. So what should the new prime minister do to end up on the winning side? 

Since the elections, newspaper columns have been filled with solid advice for him. Still, I find one missing link: how should he conduct himself to avoid falling prey to the perverse political culture that pervades our system? At the heart of this perversion lies the curse of sycophancy.  Sycophancy is the brain-eating amoeba of Pakistani politics. It affects everyone — the upright and the compromised. Sycophants are simply rational actors who recognise that sucking up to the boss offers greater benefit than objective critique in cultures with weak integrity and an absence of meritocracy.

Khan should rule Pakistan as a last-term prime minister.

To be sure, different leaders have different levels of susceptibility to sycophancy. But no one comes into office believing that they’ll fall for it. Yet, most end up addicted. Leaders tend to get surrounded by a group of people who act as gatekeepers. The leader’s reality begins to be shaped; they gradually lose touch with the view on the street. This problem tends to be acuter in contexts like Pakistan’s where there is no end to bad news; praise, genuine or not, offers leaders welcome relief from the constant stress and anguish of dealing with the country’s myriad problems.

Talk to people who worked for Benazir, Musharraf, or Nawaz and they’ll tell you how each one’s inner circle changed from the candid and objective to the sycophants over time; how this was perfectly correlated with these leaders’ transformation from being patient listeners to imposers of their will and dismissive of anything unflattering. Khan won’t be immune to these pressures. And no matter how different he may be from his predecessors, sycophancy will begin to affect his outlook unless he consciously acts to nip it in the bud now.

First, he will need to deal with his immediate surroundings. Four steps are in order: one, explicitly tell the cabinet that they are barred from praising Imran Khan, the individual; make an example of the ones who think he’s bluffing. Two, appoint one or two individuals to attend cabinet meetings specifically to play devil’s advocate in every policy conversation — in military terms, ‘red team’ it. Three, regularly meet different opinion-makers (policy experts, journalists, business elite) who are critical of you; let them speak their mind and absorb what makes sense — appreciate them and force your team to act upon their constructive suggestions. Four, keep the gatekeepers — formal ones like your principal secretary or military secretary or self-anointed ones pretending to protect you from the riffraff — in check.

Second, Khan should rule Pakistan as a last-term prime minister. As the political realities of an in-power party hit home, so will the inherent tradeoffs between populist, vote-solidifying moves and decisions that are in the country’s long-term interests but could hurt a government’s support-base. As this begins to become apparent, sycophants will pounce. They’ll convince the boss that visionary decisions with only long-term gains will force them out of power. Often, this argument becomes potent as a leader gets into the second half of his or her term in office. In the PTI’s case, Khan’s populist promises and the sky-high expectations associated with him could make it attractive much earlier. To forestall this, Khan needs to shun any conversation that pleads populism for re-election over merit-based decision-making.

Third, the prime minister should devolve important decision-making in ways that make it unattractive for sycophants to target him. Khan should consider his job to be a recruiter-at-large and resist any and every urge to micromanage things. Pakistan’s problems are too vast and complex for a hands-on leadership approach to work. Instead, the prime minister’s time should be spent recruiting the best talent for the key public-sector political and technocratic positions around the country and empowering them to deliver results. The sycophants would then find more value in flocking to these decision-makers. This is a far less damaging prospect as long as the prime minister can set up a mechanism to evaluate the performance of these individuals on a regular basis and penalise those unable to perform — because the sycophants have got the better of them or otherwise.

All this is easier said than done. But evidence is unflinching: you fall for it and you become delusional — no matter who you are.


'Naya Pakistan’, the slogan of the incoming Pakistan Tehreek-e-Insaf (PTI) government, has caught the imagination of an overwhelming number of ordinary people. The party now beckons towards framing a new people-centred development paradigm — one that will result in a welfare state that meets basic needs in education, healthcare, housing and employment, provides direct income support to the poor and the vulnerable, reduces extreme income inequality and shuns wasteful consumption and lavish expenditure.

To accomplish all this appears to be a Herculean task, especially for a government that has come in through an elected democratic process and not a revolutionary change involving the overthrow of the ruling propertied classes. Yet, as many countries – including the United Kingdom in the distant past and, more recently, China and Brazil – have shown, it is possible to spread the gains of economic development through social welfare measures that reduce poverty and inequality. This, however, requires prudent economic management, reduction of wasteful expenditures and the stamping out of widespread corruption. Most importantly, it needs an honest, sincere and committed leadership that enjoys public confidence.

What, then, are the major challenges to realising the dream of a ‘Naya Pakistan’?

For a start, any process of structural change must be anchored to a strong foundation of macroeconomic stability and overall peace and security in which all people and sectors of the economy can realise their potential. While Pakistan has made significant improvement in peace and security in recent years, its current macroeconomic situation is in a shamble. The country’s foreign exchange reserves are precariously low at just over 12 billion US dollars (including recent inflows from China) and would fund less than three months of imports. Our unsustainable trade deficit reached almost 30 billion US dollars last year and a spending spree by the outgoing government has pushed the budget deficit to over seven per cent of the Gross Domestic Product (GDP), necessitating increased borrowing from abroad and thus raising pressure on the current account deficit.

Regaining a macroeconomic balance must, therefore, be the immediate aim and priority of the new government. To overcome this crisis, the incoming government must try to increase foreign exchange reserves – whether through reaching an agreement with the International Monetary Fund (IMF), or by borrowing from friendly countries, or by raising funds in global financial markets – and on terms that do not throttle the little growth momentum Pakistan has built up or seriously restrict the country’s capacity to move the economy in the direction that PTI has promised. While the government must also cut down the budget deficit, it should do so by curtailing non-development and wasteful expenditures. It must not agree to any further devaluation of the Pak rupee. This has already been done by the interim government and some downward corrections are correctly being made in the local currency’s value to achieve a sustainable equilibrium.

The impact of measures to stabilise the macroeconomy, which any lender will certainly insist upon, will have an adverse impact on ordinary people, as energy subsidies will need to be reduced to bring down the increasing circular debt, which has now reached over seven billion US dollars. The prices of other utilities will also need to be adjusted upwards.

However, people will likely be prepared to accept this spike in prices if they are assured of a decline in line and delivery losses, a reliable supply of electricity and gas, and minimal load-shedding. The incoming government must present in stark terms the situation it has inherited and the need for these price adjustments in order to ensure timely service delivery in the future. It is better to start early than merely delay the inevitable. The government will face strong opposition to the privatisation of inefficient and loss-making public sector enterprises — including the Pakistan International Airlines (PIA), Pakistan Steel Mills and Pakistan Railways, but they can be made to function more efficiently were the government to initiate a restructuring process, including some reduction in their workforce. This can only be done by taking the representatives of employees on board and reaching an agreement with them over settlement packages and re-skilling programmes for displaced workers. 

We must all realise that sustainable macroeconomic stability can only result from a rapid increase in our export earnings (‘export or economically perish’ as goes the economic widom) which, at 25 billion US dollars, currently pay for only 40 per cent of our import bill. The latter crossed 60 billion US dollars last year and, with expected further increases in oil prices, will continue to rise. This is a major challenge that the incoming government must address. It can do so through arbitrary increases in tariffs on imports of a long list of goods although taking such short-term measures to reduce the trade deficit does more harm than good in the longer run. Given that Pakistan has lost its share in global markets in recent years, aggressively marketing our exports may hold the key to solving the problem on a sustainable basis. Selected but targeted government support for exporters could make a significant difference here. Framing a new trade policy and building on the lessons of the disastrous trade and exchange rate regime of the recent years must, therefore, be given priority.

Increases in development expenditure must be planned and evaluated to ensure cost-effective and timely project delivery. Moreover, wherever possible, public-private partnerships should be encouraged to realise and finance a planned shift towards ‘investing in people’ and increase the dismal amounts of money currently spent on education, healthcare and housing. The tax-to-GDP ratio will also need to be increased from around 11 per cent to 16 per cent over the next five years.

This will require deft handling because this increase is bound to create considerable friction with tax avoiders, especially among the trading classes. The government must adopt a carrot-and-stick policy, providing incentives to taxpayers but coming down hard on those who deliberately avoid paying their due taxes. While a carefully planned restructuring of the Federal Board of Revenue must be given priority, this must be done at a pace that does not disrupt or sabotage the department’s working.

An aggressive skills training programme and a certification system for existing skills must be started. Where existing programmes are functioning well, they must be expanded. 

The new government must also bear in mind that any attempt to significantly shift priorities in development expenditure from physical infrastructure to investing in people and enhancing social welfare benefits will mean curtailing the very large amount of money required for ongoing and planned public sector projects. This amount is estimated at between five to ten times of the annual development expenditure, depending on whether we include or exclude some major capital-intensive projects such as dams and motorways. The real challenge for the government will lie in deciding which projects to continue and which to drop or modify at an early stage.

To conduct this exercise rationally and ensure a balance between badly needed infrastructure — especially to replenish our shrinking water resources, meet our growing energy needs and giving higher priority to human development, we will need to resurrect our planning machinery. This must be done at the federal level and (equally importantly) at the provincial and local levels. It is not just technical competence that needs to be revitalised: we need to rebuild the confidence of our economic and financial policymakers so that they can think independently and speak their minds without fear or favour. They seem to have lost these abilities after many years in which those in power have dictated their preferences and refused to tolerate those who disagreed with them. The domineering influence of the World Bank and other influential donors must be critically re-examined and evaluated while recognising the need for benefiting from their expertise and global experience.

Rebuilding what was known earlier as the ‘steel frame’ of dedicated, competent and honest public servants is a prerequisite to bringing about a ‘Naya Pakistan’ at all levels of government. This is a major challenge and can only succeed if merit replaces the current system of personal loyalty to those in power, and security of service and tenure is ensured. The current Central Superior Service (CSS) examination should be deeply looked into and changed because it appears to unduly penalise those who have not passed through the ‘English-medium’ system.

Of all the promises it has made, a key challenge for PTI will be to create 10 million jobs over the next five years. The accompanying promise of building five million houses will help realise this promise, given the strong forward and backward linkages of the construction sector with the rest of the economy. But this will require government support to rebuild the domestic industry that had previously met similar demands and created jobs in the process. There is a real need for the incoming government to come up with an industrial policy that halts deindustrialisation and reignites an efficient and globally competitive industrial sector. In doing this, we must not move backward to the now discarded import substitution strategy of industrial growth but, instead, develop an export-oriented, competitive domestic industry.

An aggressive skills training programme and a certification system for existing skills must be started. Where existing programmes are functioning well, they must be expanded. The government could consider giving to unemployed workers or those who want to upgrade their skills government-funded vouchers to help pay for certified skill training in schools and colleges. Job generation programmes must be calibrated to meet the separate needs of the educated unemployed as well as those of skilled, semi-skilled and unskilled workers. A well-thought-through active employment agency could be set up under the human resources ministry, including an employment exchange for the private sector that also operates online.

Earlier, only industry could boast of enjoying rapid technological change, new innovations and the economies of large-scale production. In recent years, agriculture too has been recognised as a leading sector for growth and development. The incoming PTI government rightly recognises this but, again, this transformation must not rely on the crutches of unaffordable subsidies. Instead, agriculture must realise its potential for sustained productivity and labour-absorbing growth. An active-support policy for small farmers – one that concentrates not just on credit and loans but also encourages the use of new seeds and technology and is bolstered by a well-functioning and competent farmers’ decision support system – should replace the existing arrangements. The emphasis on industry and agriculture must be actively supplemented with a policy framework to encourage the growth of new and dynamic sectors driven by technology and innovative interventions. Information technology and tourism could be part of this initiative.

The increase in emphasis on and resources for education and healthcare – which are primarily the responsibility of provincial and local governments – could be supported by instituting a system of financial rewards in terms of additional grants by the federal government for districts and tehsils that meet their development targets and show real gains in the quality of education and healthcare services. The social welfare system will also need to be expanded to gradually extend the current Benazir Income Support Programme to ensure a secure minimum income for those living below the poverty line. This will require resources and time to put a working system in place. In the meantime, extending and gradually enforcing minimum wages in rural areas, in the informal economy and for domestic workers could substantially improve the earnings of the poorer working classes.

Finally, the new government could set up several commissions to investigate the key economic challenges outlined above for which it should tap the best minds both inside and outside the country. Initiating the process of framing the 12th Five-Year Plan by the Planning Commission is a step in the right direction which the new government can now steer to meet its economic objectives.

The time has come to support the long overdue goal of a ‘Naya Pakistan’ in which people from all walks of life can play a dynamic and meaningful role in national life. Concentrating resources on a few key objectives, starting with healthcare and education and monitoring the results are the key to success.


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RE: PAKISTAN'S VISION 2025 - by globalvision2000administrator - 08-27-2018, 10:10 PM

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