Interim economic team

Twenty-one days after former Justice Mir Hazar Khan Khoso took oath as the country's Caretaker Prime Minister he appointed Dr Shahid Amjad, an academic, as Advisor on Finance. Better late than never is a sentiment that is being widely expressed by many analysts who had expressed serious concerns over the caretaker Prime Minister's lack of focus on the economy which needed urgent attention given the poorly performing macroeconomic indicators.
Dr Amjad will head the Ministry of Finance for a month or less, given that general elections are scheduled for 11 May. His induction would, independent analysts argue, lead the country to be represented by someone with the status of a federal minister at the World Bank/International Monetary Fund annual spring meetings scheduled for 19-21 April who understands the economy and the constraints under which it is currently labouring inclusive of a burgeoning budget deficit of over 8 percent that is at least 0.4 percent higher than in 2008 when the country was forced to go on a challenging IMF programme. Thus Dr Amjad can lay the foundations for a new programme even though it would require fine tuning later by the next elected government.
However, to do so successfully would require him to revisit some of the data released by the Ministry he now heads, specifically with reference to the Budget Strategy Paper (BSP), that, as has become the norm in recent years, overestimating the revenue likely to be collected and underestimate the expenditure that was budgeted. And further given that the World Bank/IMF annual meetings are expected to focus on data exchange only while any new programme request would be followed by an IMF mission to Pakistan data revisit is required. The Planning Commission has come up with more credible figures and perhaps it may be prudent for the Advisor to seek a briefing from within as well as from without his Ministry.
Dr Waqar Masood was also appointed as Secretary Finance, a man who has held this portfolio three times during the past five years and is therefore known to be fully cognizant of the constraints under which the Ministry of Finance operates notably heavier than budgeted outlays by the political government inclusive of untargeted subsidies to the power sector and failure to raise the tax to Gross Domestic Product ratio due mainly to political opposition to ending exemptions granted to pressure groups. It is also a matter of record that Dr Masood lost the portfolio of Finance because time and again he refused to concede to political demands for a bailout package for a badly run public sector entity or injecting unbudgeted development funds for particular constituencies based on political considerations or ending exemptions to specific interest groups. Given his past the question is whether Dr Masood would support the caretaker Prime Minister's directives to either (i) extend a bailout package to Pakistan Steel Mills given that there has been little if any focus by the management to improve the Mills' financial health through improved governance that must be accompanied by ending nepotism and cronyism in appointments; or indeed to (ii) extend 10 billion rupees to the power sector to enable Pakistan State Oil to purchase fuel to increase power generation without implementing identified power sector reforms that include eliminating the circular debt, reducing theft, compelling government and private sector defaulters of electricity bills to pay or else face disconnection and to reduce the transmission losses that were well above the regional average.
Widely known as 'Dr No' Dr Masood sets a good example of how a senior civil servant should function: not to take decisions that are in the interest of any one political party but in the national interest, which required informed decision-making irrespective of the dictates of the ruling party. It is, however, unfortunate that Pakistan's civil service, second to none in terms of qualifications in the region, has come to epitomise corruption, cronyism and nepotism and accounts for whole scale changes with the advent of any new government at considerable cost to taxpayers. It is therefore imperative that an impartial and apolitical bureaucracy be supported by all political parties.