Economies that are afflicted by a high-level of corruption - which involves the misuse of power in the form of money or authority to achieve certain goals in illegal, dishonest or unfair ways, are not capable of prospering as fully as those with a low level of corruption. Corruption prevents the natural laws of the economy from functioning freely. As a result, corruption in a nation's political and economic operations causes an adverse impact on its entire society.
Pakistan is a victim of this phenomenon; it is in the category of high level of corruption well spread from top to bottom in all spheres of public and private sectors. The one which affects the citizens most is the corruption of elected legislators and government functionaries responsible to enforce rule of law, generate and collect revenue for the government and regulate its affairs as state regulators and controllers.
The consequences are apparent. Pakistan ranks among the poorest nations where each year more and more people are falling below poverty line while its economy owes its survival to IMF and other lending agencies and nations.
The government asks citizens to say 'no to corruption' but does not provide an enabling environment in which they can conduct their businesses without abetting in corruption. When one, even for a legitimate work, has to pay speed money, a responsible citizen is left with a limited option - pay the speed money and get on with business or close the business. The government stands responsible for this compulsion of an otherwise law abiding citizen.
While the PTI government is moving on with its agenda of the accountability of elite, it has done little to curb corrupt practices within the ranks and files of government functionaries - especially the ones with discretionary powers.
Discretion often breeds malpractices and corruption. To immobilise corruption one has to suffocate its source and in this case it means the discretionary authority of the government functionaries.
In sound and mature economies discretionary powers have been replaced by systems, processes and automation leaving little space for corrupt conduct or behaviour.
In Pakistan, grant of permits, licences, levies, NOCs and similar by those vested with authority, are few such sources which foment corruption and need to be chopped off.
An entrepreneur out to set up an industry, real-estate venture or commercial enterprise has to go through multiple processes of securing multiple permits, licences and NOCs from multiple government agencies with each exposing its incompetence, lethargy and vested interests. These factors cost money and time and all add up to Ease and Cost of Doing Business where Pakistan ranks among countries unfavourable for investment and businesses.
Many of these permits and NOCs are superfluous and are of no significant advantage to the government in terms of monetary gains or checks and balances.
To set up an industry, a prospective investor is checkmated by building control authorities for the issue of construction permits, certificates and approvals, NOCs from the environment authorities, levies of taxes at different levels viz. lease, property tax and similar where the speed money paid often exceeds the official fee deposited in government coffers and the difference between the two is described as grey money. It is believed that the incumbent government is going after speed money.
At DHA Karachi, a builder has to secure over six NOCs at different stages of construction of his project with multiple submission of documents and inspections, whereas the purpose can be better achieved in just two viz. DHA approves the building plan, the builder abides by it and on completion DHA issues the completion certificate. Deviation, if any, to be made good at the expense and risk of the builder. There are multiple similar examples of the meaningless culture of NOCs prevalent in our system.
The modus operandi of the incumbent government to curb corruption and grey economy by generating fear is not likely to work in an environment characterized by corruption and inefficiency. The government needs to take some considered and bold decisions.
As a first step, the incumbent government should abolish the culture of securing NOCs from government entities, which by and large, are ridiculous and tailored to be exploited by vested interests and to serve their purpose.
Pakistan has achieved some success in this regard by automating the issue of national passport, national identity card, driving licence and similar - all which earlier required speed money, multiple NOCs/guarantees and superfluous documentation.
To effectively achieve the clean-up, the government needs to sincerely work to replace bureaucratic influence with technology offering all its citizens a fair playground to conduct its business. With our industry and businesses burdened with high cost of doing business this relief is the least expected of the incumbent government.
(The writer is the former President of Overseas Investors Chamber of Commerce and Industry)
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