Governing the unelected

The constitution contemplates only two ways of removing a Prime Minister: Divine intervention - mental or physical impairment - or a vote of no confidence by the elected representatives. The aspirants to the Prime Ministerial crown, come 25 July, are all too aware they can also be removed by two unelected powers. Yes, the Prime Minister has the power to remove one of these two but he is not sure to live to fight another day should he do so. As for the other one, there is nothing he can do. Constitution is made by the elected but 'interpreted' by the unelected, and what finally matters is interpretation.
The good money is on the incoming assemblies not completing their term. There is little the elected can do about the immutable realities of unelected power. If change has to come, and we hear murmurings, it can come only from within. A nice thought to savour your sheer khurma with, as you enjoy the 'political entertainment' and wonder if money spent on campaigns boosts our consumption-driven-highest-in-the-decade economic growth.
The enigma is if the Regulators, used to being swatted by the government like gnats, will now seize the moment and stand up to be counted as another 'immutable reality'. A weak government could provide the opportunity.
Where the private sector is expected to drive the economy, as in our case, the office of the Regulator assumes critical importance. The Regulator has a dual responsibility: protect the consumer against exploitative behavior of the firm and provide an environment that strengthens the private sector. It is not easy to strike a fine balance between these two competing responsibilities.
There is also the challenge of striking a balance between autonomy and accountability. For it to do its task properly the Regulator has to be secured against intrusiveness of the government; and yet as a user of public funds it is answerable to the public through the government. Where does one draw the line between unwarranted intervention and legitimate inquisition?
If we cast a look at our major regulators we find a mixed bag: 'sound and fury signifying nothing'- except where it suits them or their 'controllers' - kind (CAA, Building Control Authority, Environmental Protection Agency);confused, unsure of their mandate and ill equipped ones (Competition Commission, PEMRA, DRAP, OGRA);and those wanting to do things but not always allowed to (NEPRA).
Then we have the State Bank and the Securities and Exchange Commission in a class of their own; with a clout that matters and which they are not shy of using. SBP, in particular, has fought for and got (with the invaluable assistance of IMF) singular autonomy. But how have they used this autonomy? And how have they been held accountable?
SECP seems to have an irrepressible urge to rush in where angels fear to tread. With a reburnished Company Act under its belt, it has become a serial issuer of directives. Even the best-equipped companies, including bodies like the Mutual Funds Association, find themselves either ducking for cover or making their lawyers work overtime to reconcile often mutually inconsistent directives.
Which will be all fine and fair if the outcome matched the pervasiveness of actions. Are the companies better managed now? Are the interests of stakeholders better protected, and the 'independent' directors really making a difference? Are there more companies getting listed, and of the listed ones a greater number more 'active' now?
Who will judge, who will shower accolades for a job well done or indict it for unnecessarily roughing up a pitch that is already so difficult to score on?
The State Bank has much greater burdens. Regulating the banks is the easier part. Prudential regulations, punitive or not, have been well honed and well accepted. SBP may have been wrong in 'gifting away' the KASB bank to BankIslami, but it had the right to do so. It has indirectly provided a lucrative arbitrage opportunity to Banks but it can hardly rock the boat when government is the dominant borrower.
SBP's domain extends far beyond regulating the banks. Its control over Monetary and Foreign exchange policies comes close to making it the financial czar of the country. In the case of the Monetary Policy it can be argued that it is the Committee (that includes certain Board members as well as external members) that decides, but insiders tell us in reality it is the Governor who decides - except where the Finance Secretary whispers in his ears.
Its vast powers give SBP the ability to create many losers and winners - low interest rates, for instance, could reward the rich and punish the poor who survive on their savings. When a government policy does so there are redresses available, from parliament to courts to finally the people. SBP is not answerable to any forum, even though its actions can seriously impact government's economic and social policies.
There are good reasons why SBP should be 'independent' of government control, as is the case with most central banks. [It is another matter that despite the protection of law only one of the last four governors could complete his term!]. But as the assassin in Wajda's film Ashes and Diamonds insisted, "everyone's got to be responsible to somebody"!
'Unelected power' has become the subject of copious scholarship juxtaposing supremacy of the people (democracy) with legitimacy, delegation, regulation and accountability. Consensus is on holding the unelected accountable; the more difficult part is how, without impairing their ability to do what needs to be done rather than what is populist.
Academics try to make a distinction between goal setting and instruments. It would be perfectly legitimate, they contend, for the government to set goals - controlling inflation at a certain level, in the context of the Central Bank, but then leaving it to the Central bank what instruments it deploys to reach that goal.
The problem is that our government is not good at setting goals. Years of personality-driven governance have taken a toll of professionalism. Setting goals, assuming consensus can be built and 'unintended consequences' factored in, also requires a lot of research for which reliable data may not always be available.
But that's half the story. Even if we become adept at setting the goals what do we do when the goals are not met? Throw the baby out with the bathwater?
shabirahmed@yahoo.com