A few years back BR Research wrote that short term approach is a bigger enemy to the economy than terrorism. And the worst enemy within is the lack of coordination amongst various government machineries managing economy. There are numerous government organizations working in isolation to each other; and are making decisions to remove the inefficiencies in one sector without realizations of externalities of their respective actions on others.

The cost economy pays due to lack of coordination is invariably too high and no one is quantifying it. There are numerous examples to illustrate what mess poor coordination has been creating. The latest demonstration is the externality of decision by one arm of energy ministry of shutting down FO based power plants on the companies operating under another arm of the same ministry. PSO has been paying demurrages for not lifting FO, and refineries closing down as all the FO storages in the country are topped up.

At federal level, the horizontal coordination between finance ministry, commerce division and energy ministry is weak but their linkages to the economy are too deep to ignore. And after the 18th amendment, the issue of missing vertical linkages between federal government and provincial governments has surfaced in the past few years.

The biggest problem that has hampered growth momentum in the recent economic history of the country is the balance of payment vulnerability. Whenever the economy starts growing, one way or the other imports grow out of bounds, while exports and other exchange earning avenues do not catch up.

Both commerce and finance ministries have been trying to bring economy to the levels that we can keep on continue to grow at 5 percent plus without the fear of external crisis. But they have failed time and again; and one of the reasons is that they work in silos. Virtually all the FTAs and PTAs signed with other trading economies lack analysis on the tax impact, employment generation and impacts on economy at large.

The strategic trade frameworks are being thought through and put down on paper by the commerce ministry without having the finance ministry on board. On the flipside, the FBR under finance ministry having power of both tax policy and tax collection is skewed towards increasing tax revenues to plug in the fiscal deficit, without delving into consequence of these taxes on trade balance of the country. A recent example is the imposition of regulatory duties by finance ministry - the actual items varied substantially from what were proposed by commerce ministry.

The question is who is responsible for coordination between various ministries. It is supposed to be the Planning Commission of Pakistan. Unfortunately, the institution itself is plagued by short term approach. There used to be five year economic plans in Pakistan, which has now changed into long term economic visions. For the past three consecutive governments, each came with an independent economic plan for the long term shelving what was introduced by predecessors.

And today when you read the targets of 2025 sitting in 2017 in the latest economic vision, they seem to be far from reality. For example it expects exports to reach $150 billion by 2025 and today it is around $21-22 billion. The GDP is expected to grow at an annual 14 percent between FY18-25. Do you expect the economy to grow consistently by 14 percent and exports to reach $150 billion by 2025? If not; how seriously would you take the vision 2025?

Role of the Planning Commission should be more than mere day dreaming. The institution should play a role of anchor when it comes to any economic decision making by any government department. But that is not the case.

Why our exports are too low? Why we are giving support price to sugar which is resulting in low sowing of cotton in favour of sugar. The sugar is in surplus in the country while cotton value added exports are on the decline. Why are we giving guaranteed returns on power projects? Is it discouraging to invest in other sectors, especially export oriented areas? Why national savings rates are too low in Pakistan? Is it due to excessive government borrowing from commercial banks? Why nutrition indicators are worsening in the country? Is it due to higher food commodity prices, especially wheat in Pakistan?

And the list goes on. Half the issues can be traced down to poor coordination between finance, commerce, energy, planning and other ministries. Most of the issues are federal subjects which can be dealt by having a coordination role of planning commission or by having a vibrant cabinet committee.

Then there are plethora of socioeconomic issues due to weak vertical coordination between provinces themselves and between provinces and federal government. Half the energy mess is due to poor distribution system and pockets within provinces which don’t pay bills. Recent gas shortages amid provincial rights on minerals are discouraging industrialization in Punjab. Then there are issues of nutrition, health, education and so and so forth.

Each and every point warrants a separate column to narrate the cost of lack of coordination on these indicators. BR Research attempts to build a narrative on the cost economy pays due to poor coordination and incompetence; and may write more in subsequent columns.

To start, the first suggestion is to have the Planning Commission and the Council of Common Interests join hands to form macro policies and coordinate with various departments both before giving nod on any proposal.